An individual looking for a friend to get a quick loan to overcome a crisis; a businessman with little money who borrows from an acquaintance to fulfill a personal obligation; or, a charitable institution that finances students and normal and sick transactions like these, as well as malicious treatment with chit funds and cooperative societies to finance political parties before the polls will be the immediate victims of a hasty ordinance.
The “Prohibited Non-Regulated Deposit Scheme Ordinance, 2019”, notified last week, could be designed to protect credulous investors from dubious equipment that sell pyramid and ponzi schemes, but the time of their enactment and possible ramifications They have surprised the experts. Some have compared it with demonetization, which aimed to curb black money and announced less than three months before the 2017 elections in Uttar Pradesh.
The law allows deposits of “relatives”, banks, financial institutions, buyers of properties, clients (extending a payment in advance) and for other designated purposes. Likewise, an owner can borrow from a non-family member provided it is strictly for commercial purposes.
“However, the ability to increase resources to meet personal and social commitments, (or) medical and educational emergencies will be exhausted, since you can not borrow from people who are not relatives, as defined in the Law of societies. The definition is restricted only to members of the immediate family, “said Associate Accountant Dilip Lakhani.