Will the Govt amend the MPID Act to toughen penalties for financial institutions?

Synopsis
Key Takeaways
- Amendment to increase penalties
- Extension of punishment period
- Support system for property evaluation
- Addressing limited success of current law
- Focus on protecting depositors
Mumbai, July 15 (NationPress) In a significant move, Chief Minister Devendra Fadnavis declared in the state assembly that the government intends to revise the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999. This amendment aims to enhance both the penalties and the duration of imprisonment for financial institutions that have defrauded depositors and failed to meet their financial responsibilities.
The Chief Minister elaborated that a framework will be established involving financial specialists and an outsourced system for property assessment. This initiative will support law enforcement and legal proceedings post-registration, aiding in the identification, valuation, and sale of properties involved.
During the question period, the Chief Minister responded to Amol Khatal, who raised concerns regarding the Maitreya group’s fraudulent activities affecting depositors statewide.
Former Finance Minister Sudhir Mungantiwar questioned whether the government plans to extend the punishment period to 20 years from the existing six and increase the fine from Rs 1 lakh to Rs 20 lakh. He passionately advocated for the amendment to safeguard the vulnerable against deception.
Mungantiwar criticized the National Company Law Tribunal (NCLT) for not delivering justice to depositors, citing the DSK Group case where properties worth Rs 16,000 crore were auctioned off for only Rs 827 crore. He urged the government to act swiftly to amend the law to enhance penalties.
The Chief Minister, in his response, noted that the current six-year sentence is bailable due to Supreme Court guidelines, and emphasized the need to enforce stricter penalties for serious offenses. He confirmed that the government will pursue amendments to lengthen the punishment timeframe for financial fraud.
He acknowledged that while the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 exists, its implementation has been limited, particularly in identifying, valuing, and selling properties linked to cases of fraud. To address these issues, he announced plans to create a dedicated system to assist police in expediting these processes.