Meghalaya Chief Minister Conrad Sangma on Friday introduced the Meghalaya Protection of Interest of Depositors (in Financial Establishments) Bill, 2018 to protect the public from any fraudulent intention of the financial institutions.
“It has become necessary to have a strong law in the state in order to protect the interest of the depositors in financial institutions operating in the state considering the fact that some of these financial institutions are unauthorized and mobilizing funds from the public/depositors with suspect or fraudulent intention,” Sangma said in a written statement while introducing the Bill.
Moreover, he said: “Since the present law, that is, the Meghalaya Protection of Interest of Depositors (in Financial Institutions) Act, 2006 is not fully equipped in dealing with such institutions, therefore, there is a need to repeal the existing Act with a new Act.”
The Bill noted that the government may pass an ad-interim order attaching the properties purchased either in the name of the financial establishment or any other persons on default of return of deposits.
It also stated that where any financial establishment defaults the return of the deposit or defaults the payment of interest on the deposit, every person including the promoter, manager, director or partner or an employee of the financial establishment will be punished with imprisonment for a term which may extend to ten years and with fine which may extend to Rs 1 lakh or both.
Such financial establishment shall also be liable for a fine which may extend to Rs 2 lakh, it added.