Notification regarding designating CERSAI as the authority.

## Report on Notification S.O. 3042(E) Regarding the Banning of Unregulated Deposit Schemes Act, 2019 **1. Executive Summary:** This report analyzes Notification S.O. 3042(E), issued by the Ministry of Finance, Department of Financial Services, on July 4, 2022. This notification, issued under Section 9(1) of the Banning of Unregulated Deposit Schemes Act, 2019, designates the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) as the authority responsible for creating, maintaining, and operating an online database for information on deposit takers operating in India. The report details the purpose, provisions, and expected impact of this designation, primarily affecting deposit takers and related financial institutions. **2. Introduction:** This report aims to provide an informative overview of Notification S.O. 3042(E), issued by the Ministry of Finance on July 4, 2022, related to the Banning of Unregulated Deposit Schemes Act, 2019. The analysis is based solely on the text of the provided notification. **3. Policy Overview:** * This is a **New Policy** designation under an existing Act. * **Core Objective(s):** To establish and maintain an online database for information on deposit takers operating in India. This is achieved by designating CERSAI as the responsible authority. **4. Background and Rationale:** As this is a new designation under the Banning of Unregulated Deposit Schemes Act, 2019, the likely problem the designation addresses is the need for a centralized and accessible repository of information on entities accepting deposits. This is critical for enforcing the Act, monitoring the deposit-taking landscape, and protecting the interests of depositors by preventing unregulated schemes. The Act itself intends to prevent fraudulent deposit schemes. The specific designation of CERSAI suggests a move towards leveraging existing infrastructure and expertise in financial data management. **5. Key Provisions / Changes:** The key provision of Notification S.O. 3042(E) is the designation of CERSAI as the authority responsible for: * Creating an online database. * Maintaining the online database. * Operating the online database. * The database is specifically for information on deposit takers operating in India. This designation establishes CERSAI's role in collecting, managing, and providing access to information related to entities involved in accepting deposits. It implies that CERSAI will be responsible for setting up the infrastructure, defining the data requirements, and ensuring the accuracy and accessibility of the information within the database. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders directly affected by this notification include: * **CERSAI:** Bears the responsibility for setting up and managing the online database. * **Deposit Takers Operating in India:** Are required to provide information to CERSAI for inclusion in the database. This includes banks, non-banking financial companies (NBFCs), and any other entities accepting deposits. * **Regulatory Bodies (e.g., RBI, SEBI):** Can leverage the database for monitoring and enforcement activities. * **Potential Depositors:** Will potentially benefit from the enhanced transparency and information availability, allowing them to make informed decisions. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) is the designated responsible body. * **Timelines or Procedures:** The notification states that the designation is with "immediate effect," implying that CERSAI is expected to commence the establishment and operation of the database without delay. However, no specific timelines or procedures for data collection or database operation are provided within the text of this notification. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of this notification are: * **Enhanced Transparency:** Increased availability of information regarding deposit takers operating in India. * **Improved Regulatory Oversight:** Facilitation of monitoring and enforcement activities by regulatory bodies. * **Reduced Incidence of Unregulated Deposit Schemes:** By making it easier to identify and track deposit takers, the policy aims to curb unregulated and potentially fraudulent schemes. * **Protection of Depositors' Interests:** Empowers depositors to make informed decisions by providing access to information on deposit-taking entities. * **Efficient data Management:** The usage of CERSAI as the designated authority suggests that the government aims to leverage existing infrastructure and established expertise in financial data management to handle the online database. **9. Conclusion:** Notification S.O. 3042(E) represents a significant step towards strengthening the regulatory framework for deposit-taking activities in India. By designating CERSAI as the authority responsible for creating and maintaining an online database of deposit takers, the notification aims to enhance transparency, improve regulatory oversight, and ultimately protect the interests of depositors. The immediate effect of this designation signals the government's commitment to addressing the risks associated with unregulated deposit schemes and fostering a more secure and transparent financial environment. Further notifications and guidance are likely to be issued to elaborate on the specifics of data collection, database access, and CERSAI's operational procedures.

Key Entities Referenced