It seems government is more concerned about defaulters, there is a growing concern in the government that due to the Covid-19 pandemic and economic distress there might be a surge in financial failures, which under current rules can get treated as frauds.
Keeping this in mind, the finance ministry has initiated the process for decriminalizing economic offences that are currently punishable with a jail term, fine or both.
The government has sought opinions from stakeholders like state governments and the public on proposals to amend 19 acts that criminalize economic offences like a bounced cheque.
As per the current law, anyone accused of issuing a cheque that’s dishonored or runs an unregulated deposit scheme that goes insolvent has to face imprisonment or fine or both. The government proposes to decriminalize such offences.
1. There is a growing concern in the government that due to the Covid-19 pandemic and economic distress there might be a surge in financial failures, which under current rules can get treated as frauds.
2. These proposals include amending the Negotiable Instrument Act which covers the dishonoring of a cheque or in simple terms cheque bouncing.
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3. Apart from that, the government also discusses required changes in various sections of banning of Unregulated Deposit Schemes Act, RBI Act, NABARD Act, SARFAESI Act, Insurance Act, PFRDA Act and Payments and Settlements Systems Act.
The All India Bank Employees' Association (AIBEA) has suggested fixing of financial limits for attracting the criminal provisions relating to bouncing of cheques in the Negotiable Instruments Act instead of the decriminalizing the offence.
Whatever the case may be but it is not a good sign for healthy financial market.