State to make MPID Act more stringent to curb financial fraud: CM

Increasing the imprisonment to over seven years will ensure that the accused don’t get bail, said Fadnavis

Mumbai: The state government will increase the maximum penalty and imprisonment period for cases of financial fraud under the Maharashtra Protection of Interest of Depositors (MPID) Act, chief minister Devendra Fadnavis said in the assembly on Friday.

CM Devendra Fadnavis in the legislative assembly on Tuesday (Anshuman Poyrekar/ Hindustan Times)

“The punishment needs to be increased to curb cases of cheating of depositors by credit societies and other financial institutions,” Fadnavis said in response to a query during the question hour on Tuesday.

“Though we have the MPID Act for such cases, it should be admitted that we have not been successful enough to return the money to depositors by selling the properties of financial institutions and their directors,” the chief minister said.

Too much time was wasted on identifying assets of the accused, getting them evaluated and selling them to recover the duped amount, he added.

Under the MPID Act, those convicted for defaulting on deposit repayments can be imprisoned for up to six years and fined up to ₹1 lakh. The government would propose to increase the imprisonment period to over seven years to make the offence non-bailable, the chief minister said.

“Increasing the imprisonment to over seven years will ensure that the accused don’t get bail. The fine also needs to be increased,” he said.

The government will set up a robust mechanism by outsourcing valuation of properties to financial experts. “It will help the government complete the process speedily and recover the duped money by selling the attached properties,” he said.

Fadnavis was replying to a question raised by BJP MLA Amol Khatal about the alleged ₹2,500-crore scam involving Maitreya Plots and Structures Pvt Ltd.

The government has already attached 409 properties related to the company and expects to recover ₹2,000 crore by selling them, minister of state for home Yogesh Kadam told the assembly.

“The auction will be completed in the next six to nine months and depositors will start getting their money after it,” Kadam said.

He also said that the government had formed ‘Frauds Intelligent Units’ to avert instances of investors being lured and duped by unusually high interest rates.