Bengaluru: In a move aimed at acting against fraudulent companies (generally known as blade companies) which cheat investors on the promise of attractive interest, the Karnataka Government is mulling on enforcing an Act to protect the interests of the investors.
In the wake of Bengaluru’s IMA (I-Monetary Advisory) ponzi scam and Guru Raghavendra Co-operative Bank fraud involving thousands of crores of rupees, the State Cabinet which met here on Thursday, is said to have resolved to introduce an Act by the name ‘Karnataka unregulated Fixed Deposit Schemes Prohibition Act-2020’.
The salient features of the Karnataka Act will be based on a similar Act framed by the Centre in 2019. The Cabinet decided to introduce a Bill in this regard in the next Assembly session and get the legislation passed.
The Act, once introduced, will prohibit private financial companies from collecting unregulated cash deposits from investors. The Act will have a good number of provisions for safeguarding the money of investors.
The public can file complaint with the competent authority if any financial company is found collecting uncontrolled number of fixed deposits from investors. The Authority has the power to act on the complaint and take measures for attaching the properties of the finance company in question, according to sources.
In another major decision, the Cabinet decided to continue ‘Bhagyalakshmi Bond’ scheme through the Postal Department’s ‘Sukanya Samruddhi’ scheme, instead of the current agency, Life Insurance Corporation of India (LIC). As per the provision of ‘Bhagyalakshmi Bond’ scheme, the beneficiary girl child is entitled to get Rs.1 lakh upon attainment of 18 years of age, for which the Government had entered into an agreement with LIC. But as the LIC used to raise objections for paying Rs.1 lakh upon maturity of the Bond, the Government decided to change the agency, by replacing LIC with Postal Department, it is learnt.