If non-banking financial corporations (NBFCs) cheat investors,they will have to pay a heft price in Haryana with the state cabinet approving Haryana Protection of Interest of Depositors (in Financial Establishments) Bill. In wake of the instances of chit fund companies committing scams across the country,the cabinet approved the Bill with an aim to improve regulatory coordination and protect the interests of the depositors. At present,there are 88 registered NBFCs in Haryana. In all,the Bill has six components fraudulent default by financial establishment,appointment of competent authority,designated court,attachment of property of malafide transferees,appeal and special prosecutors. In what could be a major deterrent for financial establishments indulging in malpractices,the Bill makes it clear that properties of promoters and directors can also be attached in case of frauds. Under the Bill,any financial establishment with an intention to defraud depositors defaults on repayment of deposit on maturity along with any benefit interest,bonus,profit or any other service as promised such financial establishment will be punished with imprisonment up to seven years with fine up to Rs 2 lakh. The Bill stated: The state is empowered to prosecute these companies and attach their properties,enforce imprisonment in case the public is duped and deceived and the depositors can have recourse to Company Law Board and other government machinery in case of default.
