The Banning of Unregulated Deposit Ordinance puts a check only on illicit deposit schemes that dupes gullible investors but it does not prohibit those regulated by law like chit funds. To curb menace of Ponzi schemes, President Ram Nath Kovind last week promulgated the Banning of Unregulated Deposit Scheme Ordinance 2019 which seeks to make such unregulated deposit scheme punishable, among other things. In a series of tweets, the Department of Financial Services said: "Banning of Unregulated Deposit Ordinance-2019, exempts Individual, Firm, Companies & LLP etc. for taking any loan and deposit for their course of business as per section 2(4) e,f,l and other provisions." The clarification comes amid rumours that deposits under chit funds and loans taken by small businesses from unrelated parties and enterprises are also prohibited. However, "Chit fund is regulated by Chit Fund Act, 1982 and is treated as Regulated Deposit as per Schedule 1 of Banning of Unregulated Deposit ...
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