Over 1 lakh directors will be disqualified for their association with shell companies, the government said on Tuesday.
Last week the Modi government had warned that the directors of over two lakh deregistered companies will be liable to jail terms ranging from six months to 10 years if they tried to siphon off money from the firms' bank accounts.
"It has been decided that in case director/authorised signatory of any struck-off company tries to unauthorisedly siphon off money from its bank account, he/she may attract imprisonment of not less than six months and extendable to 10 years," a Finance Ministry statement said.
"If it is found that the fraud involves public interest, the punishment shall not be less than three years and fine may also be imposed, which would be three times the amount involved," it added.
The government had instructed all banks to restrict the directors or authorised signatories from operating bank accounts of 2,09,032 companies that have been deregistered.