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An Act to protect the deposits made by the public in the Financial Establishments and matters connected therewith or incidental thereto

Section 3 Intimation of business

3(1) Every financial establishments, about its business in the area of jurisdiction of Component Authority, shall intimate the Component Authority to that effect.

3(2) The financial establishments shall file a copy of each of such periodical statement to the component authority as may be required to be filed, under any law, with any other supervisory authority including SEBI and RBI.

3(3) The Competent Authority at his discretion may at any time direct any financial establishment carrying on business in the area of jurisdiction of the Competent Authority to furnish in such form, at such intervals and within such time, such statements, information of particulars relating to or connected with deposits received by establishment, as may be specified in a general or a special order.

3(4) Whosoever contravenes the provisions of this section, shall be punished with imprisonment which may extend to three months of with fine which may extend to one thousand rupees of with both.

Section 4 Attachment of properties on default of return of deposits

Notwithstanding anything contained in any other law for the time being in force,

4(1) where, upon complaints received from depositors of otherwise, the Competent Authority is satisfied that any financial establishment defaults the return of deposits in cash of kind, as promised, after maturity, or

4(2) where the Competent Authority has reason to believe that any financial establishment is acting in a calculated manner with an intention to defraud the depositors;

And, if the competent authority is satisfied that such financial establishment is not likely to return the deposits, the Competent Authority may, in order to protect the interests of the depositors of such financial establishment,  pass an ad-interim order attaching the money or other property alleged to have been procured either in the name of the financial establishment or in the name of any other person of establishment, or if it transpires that such money or other property is not available for attachment of not sufficient for repayment of the deposits such other property of the said financial establishment or the promoter, partner, director, manager of member of the said financial establishment, as the Competent Authority may think fit.

Section 6 Punishment for defaults by financial establishment

6(1) Where any financial establishment defaults any repayment of deposit on maturity along with any benefit in the form of interest, bonus, profit or in any other form as promised or fails to render service as assured against the deposit, every person including promoter, partner, director, manager or any other person or an employee responsible for the management of or conducting of the business of affairs of such financial establishment shall on conviction be punished with imprisonment for a term which may extend to six years and with fine which may extend to one lakh rupees and such financial establishment shall also be liable to fine which may extend to one lakh rupees.

Provided that except for special and adequate reasons to be recorded the imprisonment shall not be less than for one year and the fine shall not be less the fifty thousand rupees.

4(2) No Police official shall investigate an offence under this Act, without express permission of an officer not below the rank of Superintendent of Police having jurisdiction.

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Post Author: mukund choudhary

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