Haryana brings bill to protect depositors' interest

CHANDIGARH: Against the backdrop of multi-crore chit fund scam in West Bengal, Haryana government today approved a bill, aimed to safeguard the interest of depositors from being defrauded by unscrupulous financial institutions, including NBFCs.

In case of default in payment, Haryana Protection of Interest of Depositors (In Financial Establishments) Bill, 2013 has proposed stringent steps including imprisonment up to seven years and fine up to Rs 2 lakh to promoter, or any other employee responsible for conducting affairs of erring financial establishment.

The bill envisages to ensure that the Non-Banking Financial Corporations (NBFCs) function on healthy lines and these companies function in consonance with the monetary policy framework so that their functioning does not lead to systemic aberrations.

Moreover, the state government is empowered to prosecute these companies and attach their properties enforce imprisonment in case the general public is duped and deceived by these NBFCs, said an official release here.

There are 88 registered NBFCs in Haryana at present. The bill also proposed that defaulting financial establishment shall also be liable for a fine which shall not be less than five lakh rupees or where such deposit is quantifiable in terms of money twice the defrauded amount whichever is more.

The Government with the concurrence of the Chief Justice of the Punjab and Haryana High Court shall constitute one or more designated courts in the cadre of a District Judge including Additional District Judge for such area or areas or for such case or class or group of cases.