The government on Tuesday said it will come out with a new bill in Parliament to ban unregulated deposit schemes, with a view to curbing defrauding of gullible investors.
The cabinet, chaired by Prime Minister Narendra Modi, also decided to make changes in the Chit Funds Act to enable greater financial access of people to other financial products.
The union cabinet, an official release said, has given approval to introduce the banning of Unregulated Deposit Schemes Bill, 2018, in parliament.
“The bill is aimed at tackling the menace of illicit deposit taking activities in the country.
“Companies/ institutions running such schemes exploit existing regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings,” it said.
Regarding changes in the Chit Funds Act, the release said the government aims to facilitate orderly growth of the segment and remove bottlenecks being faced by the industry.
The amendment will enable “greater financial access of people to other financial products”, the release said.