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New law against illegal deposits is tough, yet investors must remain alert

Avoid schemes that promise very high rates of return, or guaranteed returns for very long periods

File photo of Saradha agents at a protest rally in Kolkata
File photo of Saradha agents at a protest rally in Kolkata

In the past, scams like Rose Valley and Saradha have deprived thousands of investors of their hard-earned money. To curb the menace of illegal deposit raising, the government had introduced the Banning of Unregulated Deposit Schemes Bill in Parliament in July 2018. The Bill was subsequently referred to the Standing Committee on Finance. Recently it was passed by the Lok Sabha, but could not be passed by the Rajya Sabha. On the Cabinet’s request, the President has promulgated it as an ordinance. Unregulated entities can’t raise deposits: At present, nine regulators ...