Depositors Bill: Centre's action awaited

The Centre has been alleged of  sitting on a file for the last six months seeking President’s assent on a Bill passed by the Kerala Assembly to protect the interests of depositors in private financial establishments.

Published: 22nd October 2013 11:53 AM  |   Last Updated: 22nd October 2013 11:53 AM   |  A+A-

The Centre has been alleged of  sitting on a file for the last six months seeking President’s assent on a Bill passed by the Kerala Assembly to protect the interests of depositors in private financial establishments.

The Kerala Protection of Interest of  Depositors in Financial Establishments Bill   2012 was passed on February 19 this year and the Governor sent it to the Centre for securing the President’s approval on March 20, 2013.  Several private financial establishments in the state which had been licensed only to provide gold loans are collecting huge amounts offering higher interest rates for their deposits. These establishments have constituted various financial companies under the parent company which has been licensed to do business of lending money by mortgaging gold.

In recent statistics made public by the Reserve Bank of India (RBI), a major financial institution  based in Central Travancore had mobilised Rs 1790 crore as  deposits. The RBI has already listed the non-banking institutions and published the names on its website. But even now several people are getting lured by the better interest rates offered  by these financial institutions. If the new Bill passed by the Assembly gets presidential assent, such companies’ deposits could be attached. The depositors can also claim compensation by moving  a special court to be set up, according to the provisions of the Act.

Speaking to ‘Express’, Law  Secretary C P Ramaraja Prema Prasad said that the government had written two times to the Centre seeking the President’s assent for the Bill. But the Union Home Ministry has not yet acted on it, he said.

“If only the Bill gets presidential assent, the government could implement the provisions of the Bill to check the exploitation of depositors. The existing law is weak to punish those violating rules. The Law Department has done its duty and it is for the political leadership to take up the issue with the Centre,’’ he said.

 He, however, said that the delay on the part of the Centre in granting approval might be the normal procedural delay. The issue was discussed in the MPs’ conference held on July 16, 2013. But it is learnt that the MPs have not taken up the issue with the Centre.

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