India: RBI clarifies Co-operative societies cannot use the word “Bank” in their names
Few of the Co-operative Societies are violating Section 7 of the Banking Regulation Act, 1949 by using the word “Banks” in their names. Reserve Bank of India clarified that such Co-operative Societies cannot use the word “Banks” in their names
India: RBI clarifies Co-operative societies cannot use the word “Bank” in their names
The Reserve Bank of India (hereinafter referred to as “RBI”) vide press release 2017-2018/1467 dated November 29, 2017, clarified that Co-operative Societies cannot use the word “Bank” in their names.
It had been earlier noticed by the Reserve Bank of India that some of the Co-operative Societies are using the word “Bank” in their names which is a direct violation of Section 7 of the Banking Regulation Act, 1949 (hereinafter referred to as the “B.R. Act”)
- Section 7 (B.R. Act) = No company other than a banking company shall use as part of its name [or in connection with its business] any of the words “bank”, “banker” or “banking” and no company shall carry on the business of banking in India unless it uses as part of its name at least one of such words. No firm, individual or group of individuals shall, for the purpose of carrying on any business, use as part of its or his name any of the words “bank”, “banking” or “banking company”.
Co-operative Society means a society registered or deemed to have been registered under any Central Act for the time being in force relating to the multi-State Co-operative Societies, or any other Central or State law relating to Co-operative Societies for the time being in force. Co-operative Societies do not possess banking license and are formed with the object of promotion of economic interests of its members. Hence, co-operative societies can maintain accounts and accept deposits from its members only.
It has also been noticed by the RBI that some Co-operative societies are further violating the provisions of the B.R.Act by accepting deposits from non-members / nominal members / associate members which is identical to conducting banking business. Therefore, RBI vide its press release informed the public that such societies have neither been issued any license under the B.R.Act nor they are authorized by the RBI for doing any type of banking business. The RBI further advices the public to exercise caution and carry out due diligence of such Co-operative Societies before dealing with them
India: RBI Notification on reporting of transactions by agency banks
The Reserve Bank of India (hereinafter referred to as the ‘RBI’), vide Notification No. DGBA.GBD.1472/31.02.007/2017-18 , dated November 30, 2017, has issued a notification with regards to reporting of transactions by agency banks.
Reason for Notification –
The RBI in its notification stated that some agency banks are reporting Government transactions after considerable delay and along with the current transactions to RBI. These transactions are reported without taking necessary authorization from the concerned Government departments.
Instructions notified –
As per the extant instruction, the RBI stated that State Government transactions (electronic as well as physical mode) of previous month reported after the 8th of the succeeding month and those pertaining to earlier months should be reported to RBI through a separate statement for accounting, after being confirmed by the competent authorities of concerned State Government.
The RBI gave a decision that for Central Government transactions (electronic as well as physical mode), if the transactions or any adjustments thereof are reported after a gap of 90 days from the date of transaction, agency banks have to obtain prior approval from the concerned Ministry/Department and submit the same to RBI separately at the time of reporting such transactions for settlement.
The above instructions related to the timeline must be adhered to, for reporting of Government transactions and they shall remain unchanged
India: Simplified Proforma for Incorporating Company Electronically
Source : www.mca.gov.in
The Ministry of Corporate Affairs (hereinafter referred to as “MCA”) has recently introduced SPICe Form INC-32, which is a Simplified Proforma for Incorporating Company Electronically (hereinafter referred to as the “SPICe Form”) through Companies (Incorporation) Fourth Amendment Rules, 2016.
SPICe Form can help incorporate a company with a single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. The SPICe Form INC-32 is very similar to Form INC-29, which also helps with fast track incorporation of a company in India. The Integrated Form INC-29 has been replaced with the SPICe Form and the Form INC-29 has been completely removed from the MCA portal.
Purpose of the SPICe Form
SPICe Form deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN and/or application for PAN and TAN. The SPICe Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA, etc. Once the SPICe Form is processed and found complete, company would be registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. Also PAN and TAN would get issued to the Company.
Types of Companies which can be incorporated
SPICe Form can incorporate a company quickly by integrating many of the steps into a single process. The following types of companies can be incorporated in India:
- Section 8 Company
- Producer Company
- Private Limited Company
- Public Limited Company
- One Person Company
Declaration by Professional
The digital signature of a professional (Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate) is required to file Form INC-32. The professional must declare that all information presented in the form is correct and enter his/her membership number and certificate number.
Documents required for SPICe Form
The following documents must be filed with SPICe Form INC-32 for incorporation of company:
- Memorandum of Association – Applicable and mandatory only in case of Section 8 company or company with foreign subscribers not having DIN
- Articles of Association – Applicable and mandatory only in case of Section 8 company or company with foreign subscribers not having DIN
- Affidavit and declaration by first subscriber(s) and director(s) – Mandatory in all cases
- Proof of office address
- NOC from the sole proprietor/ partners/other associates/ existing company
- Proof of identity and residential address of the subscribers
- Proof of identity and residential address of directors
- Copies of utility bills that are not older than two months
- Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government
- If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
India: Government constitutes Insolvency Law Committee
The Insolvency and Bankruptcy Board of India (hereinafter referred to as the “IBBI”) has constituted the Insolvency law Committee vide notification no. 35/14/2017 dated November 16, 2017 (hereinafter referred to as the “Committee”).
With more than 300 cases being admitted for resolution by the Adjudicating Authority i.e., the National Company Law Tribunal, the IBBI has constituted a Committee to review the suggestions received from various stakeholders for improvements in the processes prescribed in the Insolvency and Bankruptcy Code, 2016.
The Committee will be chaired by the Secretary of the Ministry of Corporate Affairs consisting of14 other members from various stakeholders including from the legal community.
Functions of the Committee
- To take stock of the functioning and implementation of the Insolvency and Bankruptcy Code, 2016
- To identify the issues that may impact the efficiency of the corporate insolvency resolution and liquidation framework prescribed under the Insolvency and Bankruptcy Code, 2016
- To make suitable recommendations to address such issues
- To enhance efficiency of the processes prescribed and for effective implementation of the Insolvency and Bankruptcy Code, 2016
- The Committee may also make any other relevant recommendation as it may deem necessary
Working of the Committee
- To review the suggestions received from various stakeholders for improvements in the processes prescribed in the Insolvency and Bankruptcy Code, 2016
- The Committee may also invite practitioners, experts or individuals who have knowledge or experience in insolvency, law or economics and representatives from other Regulators or Ministries
- The Committee may also consult other stakeholders as part of its deliberations
- The Committee shall submit its recommendations within two months from its first meeting.
India: MCA designates Special Court in the State of Karnataka for speedy trial of cases
The Ministry of Corporate Affairs in exercise of the powers conferred by Sub Section (1) of Section 435 of the Companies Act 2013 (18 of 2013) (hereinafter referred to as the ‘Act’), vide Notification No. S.O. 3804 (E), dated December 4, 2017, along with the concurrence of the Chief Justice of the High Court of Karnataka, has designated a Special Court for the purpose of speedy trial of cases under the Act.
Need for Special Courts –
There have been many instances where the interest of the parties and companies in a trial are affected due to the lack of timely trials by the Courts. This has led to many cases being pending for years and years. In the meantime, we have the never-ending scams taking place across the country which has increased the need for setting up of Special Courts. The main reason for establishment of such Special Court is technicalities involved in these technical matters and Speedy trial of all the offences under the Act.
Constitution of Special Courts through the Act –
In light of the above mentioned Section 435, Special Courts are appointed by the Central Government by appointing a Single Judge with the concurrence of the Chief Justice of the High Court within whose jurisdiction the Judge to be appointed is working. A person shall be qualified to be appointed as a Judge of a Special Court if such person is, immediately before such appointment, holding office of a Sessions Judge or an Additional Sessions Judge.
Accordingly, the Ministry of Corporate Affairs, with the concurrence of the Chief Justice of the High Court of Karnataka, designated the LIX Additional City and Sessions Judge, Bengaluru City, for the speedy trial of cases which are punishable with imprisonment for a term of two years or more