The central government proposed decriminalizing small economic offenses. The central government proposal to decriminalize minor offenses could result in bouncing of post-dated equated monthly Instalment (EMI) at a higher rate and makes the lending business riskier. Finance Minister Nirmala Sitaram proposed to decriminalize several financial offenses including the Negotiable Instrument Act, SARFAESI Act, LIC Act, PFRDA Act, Banking Regulation Act, and chit Fund Act.
Central government proposal for decriminalizing minor offenses could result in bouncing of post-dated equated monthly Instalment (EMI) cheques at a higher rate. It is also negative when it comes to the beneficiary point, the pressure on the drawer or cheque writer to honor the pre, and the post-dated cheque gets mixed. For the payee with a small amount will end up in paying a lump sum amount as their legal fees to recover the defaults. Banks anticipate that customers will stop accepting the cheque and they will insist on an open payment system. The central government says that the proposal aims for accelerating the economic revival process and promoting business. The Department of Ministry declared that they had to decriminalize 39 sections in 19 acts Under Banking Regulation Act, Reserve Bank ACT( RBI ), Insurance Act.
While the proposal of decriminalizing small financial offenses probably provides comfort to foreign investors because a criminal liability against them in a country is a great concern for them and it can affect them negatively. The government is looking to rearrange several offenses under financial sector laws including the bouncing of cheques as civil offenses rather than criminal ones to free up in doing business and eliminate the court interference. These offenses are punishable only by financial penalties, not imprisonment.
The government is looking to rearrange several offenses under financial sector laws including the bouncing of cheques as civil offenses rather than criminal ones to free up in doing business and eliminate the court interference. These offenses are punishable only by financial penalties, not imprisonment. According to government opinion regarding the decriminalizing process that by doing this, the time taken by the court for taking the resolution will be eased.
