July 29, 2019
Ahamed Hassan speaks on The Banning of Unregulated Deposit Schemes Bill, 2019
FULL TRANSCRIPT
Sir, thank you for giving me the opportunity to speak on this important Bill on the issue which has ailed a large spectrum of people across the society.
Let me make five specific points about the legislation.
1. Central Database: As per Clause (9), the Central Government will create a database for information on deposit takers.
The Data Protection Bill has still not been tabled. The questions of privacy and surveillance are at stake.
2. Search and seize without warrant: Clause 31(1)(a), allows authorities to enter and search buildings, conveyance or place if they have reason to suspect malpractice regarding the tenets of the Bill. This is a good initiative. But again, regulatory oversight is required. What if false raids are carried out?
3. Creating awareness: What initiatives has the Government taken to create awareness and promote financial literacy among small investors in relation to not invest in any unregulated deposit schemes? Would they even know what such schemes are?
4. Recommendations of Parliamentary Committees: The 2018 Bill was referred to the Standing Committee. The Government has to specify which of the recommendations were accepted and which ignored.
a. Has the ‘Unregulated Scheme’ been defined with an indicative list of a schedule of such schemes?
b. Has the recommendation that with regard to the provision on “wrongful inducement with respect to unregulated deposit schemes”, as provided under clause 5 of the Bill, categories such as agents/sub-agents, intermediaries, brand ambassadors/advertisers/media etc. should be specifically included as illustrative examples..” been included?
c. The Committee recommended extending jurisdiction to other investigative agencies like the Serious Fraud Investigation Office. This has not been included. Why?
5. Personal loans: Doubts have been expressed as to whether personal loans are covered by the ban under the Bill. If that is the case, then a student will not be able to accept loan scholarships from a charitable trust, or a household help will not be able to take an advance from the employer.
Sir, I would like to conclude by again reinforcing the fact that the Government has to introduce a comprehensive legislation for the unregulated sector and chit funds and ensure that the common man is not affected or swindled, and the people who are already affected are compensated effectively and in whole.
Thank you.
