G.RamaMoorthy, President of Telangana and Andhra Pradesh Multi state Co-op Urban Banks Federations (TS&AP MSCUB FED) has written a letter to Finance Ministry opposing the Proposed Bill for Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill, 2015.
In a signed letter Reddy has put forth the concerns of Telangana cooperators and said after examination of the draft bill we found that the Government has ignored the presence of cooperative banks in the financial sector. The Reserve Bank of India as per the provisions of the Banking Regulation Act 1949, licenses cooperative banks and permits them to accept deposits from the public. Thus acceptance of deposits from the public is one of the lawful activities by the cooperative banks.
Elaborating on the correct definition of deposit taking establishment he says Deposit-taking Establishment” means any individual or group of individuals, a proprietorship firm, a partnership firm (whether registered or not), a limited liability partnership firm registered with the Registrar of Companies under the Limited Liability Partnership Act, 2008, a company registered under the Companies Act, 2013, an association of persons, a trust (being a private trust governed under the provisions of the Indian Trusts Act, 1882 or a public trust, whether registered or not under any enactment), a co-operative society or a multi-state co-operative society (whether registered or not under the Societies Registration Act, 1860), or any other arrangement of whatsoever nature receiving deposits, but does not include-
i) a Corporation incorporated by an Act of any Legislature;
ii) a banking company, a corresponding new bank, the State Bank of India and a subsidiary bank, as defined in Section 5 of the Banking Regulation Act, 1949”.
It is seen from the definition that a cooperative society or a multi state cooperative society (whether registered or not under the Societies Registration Act 1860), are included in the definition of deposit taking establishment and while doing so a corporation incorporated by the act of any legislature and a banking company, as defined in Section 5 of the Banking Regulation Act are mentioned to be “does not include”.
The Government has announced in the Budget 2016-17 that it proposed to bring in a comprehensive central legislation to deal with the menace of un-authorised deposit taking schemes and to protect the interests of the depositors. Therefore, the Union Government has placed a draft bill of the “Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interest (Banning Bill) – 2015” for public comments. We welcome the move of the Government to ban the ponzy schemes and protect the depositors’ interests.
