Major Announcement to Stop Ponzi Gold Schemes by Jewelers

The Union Cabinet approved the Banning of Unregulated Deposit Schemes Bill, 2018, for introduction in Parliament in February after rising instances of people being defrauded by illicit deposit-taking schemes.

Many jewellers who are members of the All India Gem & Jewellery Trade Federation have stopped enrolling customers under the 11-month gold savings scheme until there is clarity on the new bill.

“We are taking the help of lawyers to find out how the gold savings schemes will be treated under the new bill,” said Nitin Khandelwal, chairman of the federation. “We will give a representation to the finance ministry on this in a week’s time.” The bill seeks to ban deposit takers from promot ..

The ‘Banning of Unregulated Deposit Schemes Ordinance’ may not help if you lose money in these schemes run by jewellers

Cracking its whip on the Ponzi schemes in the market, the Centre in February introduced the ‘Banning of the Unregulated Deposit Schemes Ordinance’. While it initially appeared that the ordinance would cover all unregulated schemes, it has turned out that gold schemes run by jewellers could be out of the net. Jewellers — big and small — continue to raise money through gold schemes in which customers contribute a fixed sum for 11 months, and at the end jewellers contribute the last installment & client can buy jewellery for the accumulated value. Many jewellers are sole proprietors or run the business as a partnership firm, thus operating in a regulatory vacuum.