NEW DELHI: To help businesses tide over financial difficulties caused by the nationwide lockdown, the Centre plans to decriminalise minor economic offences such as cheque bounces and delays in repayment of loans.
To make this happen, as many as 19 legislations will have to be suitably amended.
These include the Negotiable Instruments Act (cheque bounce), SARFAESI Act (repayment of bank loans), LIC Act, PFRDA Act, RBI Act, NHB Act, Banking Regulation Act and Chit Funds Act.
The finance ministry has shared its proposal and invited public comments from all stakeholders. Based on the feedback, the Department of Financial Services will take a call on whether a particular section should be modified to decriminalise to improve ease of doing business.
Till now, the accused in such small offences faced fine or imprisonment or both depending on the gravity of the charges.
With the changes, the finance ministry aims to create a system wherein the penalty levied is sufficient to act as a deterrent and will help in “improving business sentiment and unclogging court processes” in the wake of economic crisis caused due to the nationwide Covid-19 lockdown.
For instance, under existing law, violating the provisions of the RBI Act such as inviting deposits without authorisation or avoiding the registration could attract imprisoned up to years plus a fine of up to `25 lakh. If these offences are decriminalised, the fine will be be raised but there will be no imprisonment.
The move was already announced by Finance Minister Nirmala Sitharaman in the Atmanirbhar Bharat package.
“Criminalising procedural lapses and minor non-compliances increases burden on businesses,” the finance ministry said in a statement.
19 laws up for revamp
Negotiable Instruments Act, SARFAESI Act, LIC Act, PFRDA Act, RBI Act, NHB Act, Banking Regulation Act, Chit Funds Act, Insurance Act, and NABARD Act are among the 19 laws that the finance ministry has proposed to amend