The Union Cabinet on Wednesday approved Banning of Unregulated Deposit Schemes Bill with an aim to tackle the menace of illicit deposit- taking activities in the country.
The bill will replace the Banning of Unregulated Deposit Schemes Ordinance, 2019.
Talking to reporters after the Cabinet meeting, Information and Broadcasting Minister Prakash Javadekar said people are suffering due to chit fund scams.
"The bill will help tackle the menace of illicit deposit taking activities in the country, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gulible people of their hard earned money," an official release said.
The proposed legislation will have adequate provisions for punishment and disgorgement/ repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally, it added.
(with news agency inputs)