New Delhi, Feb 19 (PTI) The Union Cabinet Tuesday approved promulgating an ordinance with regard to the Banning of Unregulated Deposit Schemes Bill to protect gullible investors from Ponzi schemes.

The lower House, or the Lok Sabha, had passed the Bill on the last day of the budget session by a voice-vote, but could not get the approval of the Rajya Sabha.

This was informed by Finance Minister Arun Jaitley after meeting of the Union Cabinet.

The Cabinet has requested the President of India to promulgate an Ordinance in this regard.

The Bill seeks to put in place a mechanism by which such depositors can be compensated. It has incorporated recommendations of the Standing Committee on Finance.

The legislation is aimed at effectively tackling the menace of illicit deposit-taking activities, and prevent such schemes from duping the poor.

The proposed law provides for severe punishment and heavy pecuniary fines to act as deterrent.

The Bill was initially introduced in Parliament on July 18 last year in the Lok Sabha and was referred to the Standing Committee on Finance.

This is published unedited from the PTI feed.