Ministry of Finance Notifies rules for Banning of unregulated Deposit scheme.

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The Ministry of Finance vide notification dated 12th February 2020, has published the Banning of Unregulated Deposit Schemes Rules, 2020(BUDS Rules) that provides for a comprehensive mechanism to tackle illicit deposit taking activities and various provisions related to information and particulars to be considered, manner of provisional attachment and administration of provisionally attached property.

Key Highlights from the rules:

  • The BUDS rules defines the term ‘competent authority’ as an authority appointed by the appropriate government under section 7 of the BUDS Act, according to which the authority has the same powers as vested in a civil court under the Code of Civil Procedure (CPC) while conducting investigation or inquiry in respect of offences under the Act.
  • The competent authority would consider any complaint against the promotion or operation of an unregulated deposit scheme, whether the complainant is a depositor in the said unregulated deposit scheme or not.
  • The designated authority shall operate a portal accessible to the public, containing information relating to deposit takers.
  • Provisions relating to Manner of attachment and administration of provisionally attached property, Impounding and retention of records, Form and manner of intimation submitted by every deposit taker commencing business, Authorization to the officer-in-charge of a police station for search and seizure, Retraction of advertisement etc. is elaborately laid down in the Rules.

Click here to read the Notification.

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