Cutting across party lines, members in the Rajya Sabha on Monday supported a bill that seeks to regulate unregulated deposit schemes in the country and protect the money of poor depositors.
CPI-M leader Elamaram Karim, however, moved a resolution opposing the ordinance route taken by the government to bring this bill just before Lok Sabha polls.
Asserting that he does not question the merit of the bill, Karim said it was not a good practice to bypass Parliamentary procedure and bring an ordinance. Every bill should be debated in Parliament.
The Banning of Unregulated Deposit Scheme Bill, 2019 has already been passed in the Lok Sabha.
Later, Minister of State for Finance Anurag Thakur moved the bill for discussion in the Upper House and members from various parties welcomed it and offered suggestions as well.
Participating in the debate, Suresh Prabhu (BJP) said it is a comprehensive bill which is a necessity for the economy as this will help mobilise savings in a regulated environment.
Prabhu, however, suggested the Finance Minister look at Clause 12 in Chapter 5 of the bill “very seriously” to avoid dichotomy in view of amendments being brought to section 53 of the IBC law.
Noting that a big challenge before the country was to look at ways to mobilise savings, the BJP leader said, “China has 50 per cent saving rate in a USD 12.4 trillion economy. It has USD 6.2 trillion savings that could be brought back into investment. We have to increase our savings rate.”
Savings can be improved if there are intermediaries like NBFCs. But intermediaries need to be regulated. And also, there should be a fine trade-off between those who mobilise deposit and protect the interest of depositors, he added.
AITC member Derek O Brien supported the bill, saying this is the first bill brought for passage in the House after being scrutinised by a parliamentary panel.
“None of 14 bills went through parliamentary scrutiny,” he said.
Brien said it is a water-tight bill that aims to curb fraudulent practices in Ponzi schemes and chit funds as he mentioned fraud cases like Pearl Chit Fund of Rs 49,000 crore that affected 5,500 crore depositors and Gujarat’s Oscar Chit Fund that had a deposit from 1.2 lakh people.
T Subbarami Reddy (Cong) supported the bill stressing that the poor should be protected from unregulated deposit schemes and norms should be made more stringent.
Currently, the Non-Banking Finance Companies (NBFCs) are in a bad shape because of 2-3 unscrupulous companies and the government should take steps to address the problems, he said.
Ramnath Thakur (JD-U), Vishambhar Prasad Nishad (SP) and Prashanta Nanda (BJD) also supported the bill.
Nanda supported the bill, saying such a comprehensive law is the need of the hour. He said it could hit real estate developers who are getting money from such unregulated schemes.
Banda Prakash (TRS) said there is a network of people taking deposits using commission agents by offering high-interest rates and such funds are invested in real estate.
He lauded the Finance Minister for bringing this bill that will help safeguard interests of people, especially the poor, as there is no law to regulate such Ponzi schemes.
He called for a regulatory mechanism and collection of data by the Finance Ministry and states on how much money is being taken through such deposit schemes. He said there is no authentic study to measure how much poor people are investing
in these schemes.
K Soma Prasad (CPI-M) said it is high time such a law be brought that could protect investors and put an end to such schemes. He said the law could help tackle illicit deposit companies and regulate them. The CPI-M member noted that most of the time the poor are being cheated through such schemes.
He, however, expressed apprehensions that the law is harsh and could provide harsh treatment to people in villages.
“There is ambiguity in the law and there must be clarity for acceptance of loans for personal exigencies,” he said, adding the government should ensure maximum publicity to the law.
Manoj Kumar Jha (RJD) supported the bill but had a word of caution, saying bureaucracy should not be given so much power that might create a state within a state, that might create problems later. He called for action on such deposits at the beginning itself.
P Wilson (DMK) said Tamil Nadu already has a law to protect interests of depositors.
He also called for steps to ensure the supremacy of the legislature and reclaim the space since the judiciary and the executive were transgressing. He also called for Bharat Ratan to DMK leader Karunanidhi.