The Ministry of Finance, Department of Financial Services has proposed to decriminalise minor offences under various statutes administered by it, with a view to improve business sentiment and unclog court processes. While determining the reclassification of criminal offences to compoundable offences, the following principles would be kept in mind: (i) Decrease the burden on businesses and inspire confidence amongst investors; (ii) Focus on economic growth, public interest and national security; (iii) evaluation of the nature of non-compliance, i.e. fraud/criminal intent as compared to negligence or inadvertent omission; and (iv) The habitual nature of non-compliance.

Some of the offences proposed to be decriminalised are as under:

• 138 of the Negotiable Instruments Act, 1881
• 12 r/w S. 147 of Companies Act 2013  & S. 103 of the Insurance Act, 1938
• 29 of the SARFAESI Act, 2002
• Sub-sections (1), (4A), (5) and (5A) of S. 58B of the RBI Act, 1934
• 23(1) of the Credit Information Companies (Regulation) Act, 2005
• 36 AD (2) & 46 of the Banking Regulation Act, 1949
• 21-24 of the Banning of Unregulated Deposits Schemes Act, 2019

Offences under the PFRDA Act, 2013, Payment and Settlement Systems Act, 2007, NABARD Act, 1981, NHB Act, 1987, State Financial Corporations Act, 1951, Factoring Regulation Act 2011, Actuaries Act, 2006, General Insurance Business (Nationalisation) Act, 1972, LIC Act, 1956, Chit Funds Act, 1982, DICGC Act, 1961, Prize Chits and Money Circulation Schemes (Banning) Act, 1978 are also proposed to be decriminalised.

State Governments/UTs, public and private organisations and members of the public have been invited to submit their comments/ suggestions on this proposal, along with the rationale for the same by 23 June 2020.

To refer to the press release of the MoF dated 8 June 2020, click here.