Ordinance to curtail fraud notified by LG

Delayed by almost six years after the Centre enacted the Banning of Unregulated Deposit Schemes Act of 2019, the new rules are aimed at prohibiting unregulated deposit schemes.

Lieutenant governor (LG) VK Saxena on Monday approved the notification of the Banning of Unregulated Deposit Schemes Rules, 2024, to prevent residents from getting duped by fraudulent online schemes.

LG VK Saxena

Delayed by almost six years after the Centre enacted the Banning of Unregulated Deposit Schemes Act of 2019, the new rules are aimed at prohibiting unregulated deposit schemes— except those conducted in the ordinary course of business— and protecting the interests of depositors, officials said.

Under Section 38 (1) of the Act, state or Union territory governments, in consultation with the Centre, were asked to issue their separate rules.

“In response, the Chit Fund department drafted the Delhi Banning of Unregulated Deposit Schemes Rules, 2021, based on the rules established by the Karnataka Government,” a senior official with LG secretariat said.

“This draft was reviewed by the law department, which advised obtaining the opinion of the then LG, as required by Clause (4) of Article 239AA of the Constitution. Approval from the then LG was secured before forwarding the file to the central government,” the official said.