Maharashtra Assembly Passes Bill To Amend MPID Act And Recover Rs 38000 Crore
The Maharashtra legislative assembly in Mumbai on Wednesday passed a bill to amend the Maharashtra Protection of Interest of Depositors (Financial Establishments) Act to expedite the recovery of over ₹38,000 crore of stuck investors' money. The amendment aims to speed up the disposal of attached properties and expand the state's legal framework to cover cryptocurrency and blockchain-based scams.
The bill, which is yet to be tabled in the legislative council, introduces strict measures to prevent prolonged legal delays. Under the new provisions, appellants must deposit 50% of the defrauded amount with the authorities before they can file an appeal against the attachment of properties belonging to financial institutions.
To ensure the time-bound disposal of cases, the amendment limits the number of court adjournments to two. A third adjournment will be permitted only under exceptional circumstances.
Minister of State for Home Yogesh Kadam, who tabled the bill in the assembly, stated that when the government initiates asset attachment to recover defrauded sums through auctions, the accused frequently file appeals. These appeals can drag on for years, and sometimes up to a decade, leaving investors in the lurch while the value of the attached assets declines over time.
Kadam explained that the condition of depositing half of the defrauded amount will discourage appeals in such cases. Once the amendments are fully implemented, the government expects affected investors to receive their stuck funds in less than a year.
The state government informed the assembly that currently, more than ₹38,000 crore of investors' money remains stuck due to embezzlement and various frauds in credit societies and other financial institutions.
In addition to property disposal reforms, the amendment expands the scope of the Act to include modern financial crimes. Virtual digital assets, including cryptocurrency and blockchain-based digital instruments, were previously excluded from the definition of a "deposit" under Section 2(c) of the Act. The new bill officially brings these digital assets within the purview of the law.
Kadam also announced that the government plans to strengthen the financial intelligence units at local police stations to better track and address financial crimes.
