This page is informational and is not legal advice. It describes rules, orders and rulings as published or reported on the dates shown; read the primary text before relying on any of it.
An unregulated deposit scheme is, in the words of the Banning of Unregulated Deposit Schemes Act, 2019 (s.2(17)), a scheme under which deposits are taken "by way of business" that is not a Regulated Deposit Scheme listed in the Act's First Schedule.
Section 3 of the Act bans such schemes. The First Schedule names nine regulators and the schemes each covers, among them the Reserve Bank, SEBI, the Ministry of Corporate Affairs, the Central Registrar of Multi-State Co-operative Societies and state governments. A scheme offered by a co-operative society registered under a state co-operative law is listed there, with the State Government as regulator.
Why the term sits next to pigmy collection
A co-operative bank taking daily deposits holds a banking licence. A co-operative society taking them is registered with a Registrar. The situation the Act bans is the arrangement that has neither: a collector taking daily cash for an entity with no licence and no registration, issuing a passbook that looks exactly like a bank's.
Registration is not insurance. A registered society does not appear on the DICGC insured-bank register, which lists banks only. The two questions are separate, and both are worth asking.
This entry is read from the Act's text on India Code (as on 1 July 2026). It is informational and not legal advice: whether a particular arrangement falls inside the Schedule is a question for the text and a lawyer. Our guide to unregulated deposit schemes sets out the penalties and how the Act meets a collection round.