The government on Thursday said market regulator Sebi has sought stronger powers to recover monetary penalties from defaulters.
In a written reply to Rajya Sabha, Minister of State for Finance Namo Narain Meena said Securities and Exchange Board of India (Sebi) had asked the government to amend regulations for powers of recovery from defaulters.
"Sebi has proposed that the Sebi Act be amended to provide for effective mechanisms for recovery of monetary penalties imposed by Sebi in such a manner as may be specified by regulations or if found expedient as per provisions of the Income Tax Act through a reference to the income tax authority on the lines of the provisions of Section 39 of the Competition Act, 2002," the Minister said.
According to Meena, there were 1,290 defaulters as on June 30, 2012, while the total amount of penalty imposed on them stood at Rs 112.25 crore (Rs 1.12 billion).
"We need the support of the government on this, in the sense that methods provided in the Sebi Act for recovery (of penalties imposed by us) is different from what is there in, say for example, the CCI Act and the Income Tax Act," he had said.
"Our provisions for recovery are less effective, and therefore somebody can choose to ignore and the actual actions against them can take years," Sinha had said.
Sebi is mandated to safeguard the interest of investors and to regulate and promote various segments of the capital markets.
The regulator has powers to take actions, including imposition of monetary penalties, against the persons and entities found to be engaged in manipulative activities and violating the regulations for the securities markets.