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Showing posts from March, 2018

Regulate the Unregulated Deposit Schemes

With its ongoing mission to curb the unregulated deposit & Ponzi scheme and to protect the savings of the investors, the Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to introduce the“Banning the Unregulated Deposit Scheme Bill 2018” (“Bill”). The Bill is aimed at tackling the menace of illicit deposit taking activities in the country. Companies/ institutions running such schemes exploit existing regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings. The Bill may cover: complete prohibition of unregulated deposit taking activity;deterrent punishment for promoting or operating an unregulated deposit taking scheme;stringent punishment for fraudulent default in repayment to depositors;designation of a Competent Authority by the State Government to ensure repayment of deposits in the event of default by a deposit taking establishment;powers and f…

A Structured Overview of Corporate Insolvency Regime in India

What is the purpose of Insolvency and Bankruptcy Code 2016? 1. Th consolidate & amend the laws relating to insolvency & bankruptcy; 2. To fix the time periods for execution of the law in a time bound manner; 3. To increase the availability of credit; 4. To balance the interests of all stakeholders including alteration in the order of priority of payment; 5. To establish an Insolvency & Bankruptcy Board of India as a regulatory body for insolvency & bankruptcy law. With the recent changes in the legal landscape of India, the Insolvency & Bankruptcy Code, 2016 (“Code”) is the biggest and major legal reforms in the recent times, which has curtailed the earlier extensive process of debt recovery and insolvency. The Code has repealed around eleven laws and provides a comprehensive and time bound mechanism to either put a distressed entity on a firm revival path or timely liquidation of assets. The Adjudication Authority for companies shall be National Company Law Tribunal (NCL…