Bare Acts › Banning of Unregulated Deposit Schemes Act, 2019

The Banning of Unregulated Deposit Schemes Act, 2019

The Banning of Unregulated Deposit Schemes Act, 2019 (Act No. 21 of 2019) creates a comprehensive legal framework to prohibit unregulated deposit schemes, deal with fraudulent defaults in regulated schemes, protect depositors, enable attachment and restitution, and provide for investigation and punishment.

Current legal reference: The Act was enacted on 31 July 2019 and is deemed to have come into force on 21 February 2019. The Central Government has also framed the Banning of Unregulated Deposit Schemes Rules, 2020 under section 37.

Chapter-wise Sections of the BUDS Act, 2019

Chapter I - Preliminary

Sections 1-2

Sections 1 and 2: Short title, commencement and definitions

Chapter II - Banning of Unregulated Deposit Schemes

Sections 3-6

Sections 3, 4, 5 and 6

Chapter III - Authorities

Sections 7-8

Sections 7 and 8: Competent Authority and Designated Court

Chapter IV - Information on Deposit Takers

Sections 9-11

Sections 9, 10 and 11

Chapter V - Restitution to Depositors

Sections 12-20

Sections 12, 13 and 14
Sections 15, 16 and 17
Sections 18, 19 and 20

Chapter VI - Offences and Punishments

Sections 21-27

Sections 21, 22 and 23
Sections 24, 25, 26 and 27

Chapter VII - Investigation, Search and Seizure

Sections 28-32

Sections 28, 29, 30, 31 and 32

Chapter VIII - Miscellaneous

Sections 33-44

Sections 33, 34, 35 and 36
Sections 37, 38, 39 and 40
Sections 41, 42, 43 and 44

Arrangement of Sections

Chapter I - Preliminary

  1. Short title, extent and commencement.
  2. Definitions.

Chapter II - Banning of Unregulated Deposit Schemes

  1. Banning of Unregulated Deposit Schemes.
  2. Fraudulent default in Regulated Deposit Schemes.
  3. Wrongful inducement in relation to Unregulated Deposit Schemes.
  4. Certain scheme to be Unregulated Deposit Scheme.

Chapter III - Authorities

  1. Competent Authority.
  2. Designated Court.

Chapter IV - Information on Deposit Takers

  1. Central database.
  2. Information of business by deposit taker.
  3. Information to be shared.

Chapter V - Restitution to Depositors

  1. Priority of depositors' claim.
  2. Precedence of attachment.
  3. Application for confirmation of attachment and sale of property.
  4. Confirmation of attachment by Designated Court.
  5. Attachment of property of mala fide transferees.
  6. Payment in lieu of attachment.
  7. Powers of Designated Court.
  8. Appeal to High Court.
  9. Power of Supreme Court to transfer cases.

Chapter VI - Offences and Punishments

  1. Punishment for contravention of section 3.
  2. Punishment for contravention of section 4.
  3. Punishment for contravention of section 5.
  4. Punishment for repeat offenders.
  5. Offences by deposit takers other than individuals.
  6. Punishment for contravention of section 10.
  7. Cognizance of offences.

Chapter VII - Investigation, Search and Seizure

  1. Offences to be cognizable and non-bailable.
  2. Competent Authority to be informed of offences.
  3. Investigation of offences by Central Bureau of Investigation.
  4. Power to enter, search and seize without warrant.
  5. Application of Code of Criminal Procedure, 1973 to proceedings before Designated Court.

Chapter VIII - Miscellaneous

  1. Publication of advertisement of Unregulated Deposit Scheme.
  2. Act to have overriding effect.
  3. Application of other laws not barred.
  4. Protection of action taken in good faith.
  5. Power of Central Government to make rules.
  6. Power of State Government, etc., to make rules.
  7. Laying of rules.
  8. Power to amend First Schedule.
  9. Act not to apply certain deposits.
  10. Amendment to certain enactments.
  11. Power to remove difficulties.
  12. Repeal and saving.
Important: This page is a structured legal-reference index. For the authoritative and updated statutory text, amendments, schedules, notifications and rules, consult the official India Code and Department of Financial Services resources linked in the right-hand panel.