Lawstreet Journal

Government to decriminalize bounced cheques and several other economic offenses; seeks advice from shareholders

Lawstreet Journal 11 Jun 2020 11:44pm

Image courtesy: Lawstreet Journal Executive Government to decriminalize bounced cheques and several other economic offenses; seeks advice from shareholders

On Wednesday, 10th June 2020, The Union Government has started the procedure for decriminalizing economic offenses that are punishable at present with a jail term, fine or both. The Government has sought opinions from stakeholders like state governments and the public on proposals to amend 19 acts that criminalize economic offenses like bounced cheques. 

As per the Centre, this step is aimed at speeding the cycle of economic growth and encouraging firms. There is a growing concern in the government that there may be an increase in financial failures due to the Covid-19 pandemic and economic distress that can be treated as fraud under current rules. These proposals include amending the Negotiable Instrument Act, which deals with the dishonoring of a cheque or, in simple terms, the cheque bouncing., 

Besides, the state of reason issued by the Finance Minister on Monday, 8th June 2020 also addresses the necessary changes to the various parts of the Prohibition of Unregulated Deposit Schemes Act, the RBI Act, the NABARD Act, the SARFAESI Act, the Insurance Act, PFRDA Act and Payments and Settlements Systems Act. I

n order to get the opinion of all stakeholders, the Finance Ministry’s department Financial Services has asked state governments and UT administrations, civil society / non-government organizations, academicians, public and private sector organizations, multilateral institutions and members of the public to submit their opinions and comments by 23rd June 2020 at the latest. 

The central government will study the opinions and finalize the rules. According to current law, anybody accused of issuing… Continue Reading...

Tagged: cheque bounce  
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