Banning of Unregulated Deposit Schemes Act, 2019

The act puts in place a mechanism to secure poor depositors/investors from Ponzi schemes. A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. It generates returns for early investors by acquiring new investors.

Key Features of the Act

  • Deposit: The act defines a deposit as an amount of money received through an advance, a loan, or in any other form, with a promise to be returned with or without interest. It also defines what would not amount to deposits and the necessity of deposit-taking schemes to be registered with relevant regulator ....
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