Protection
of small depositors' interests
Government of
India has inserted new Sections 58AA and 58AAA in Companies Act, 1956,
in addition to enhancing penalities for defaults committed under Section
58A to protect the interests of small depositors with full vigour.
Section 58AA
requires every company that accepts deposits from small depositors to intimate
the Company Law Board (CLB) within 60 days the name and address of each
depositor(s) to whom it has defaulted in repayment of deposits or interest
thereon, alongwith an action plan for payment. Upon receipt of such an
intimation, CLB shall, within a period of 30 days from the date of receipt
of intimation, pass an appropriate order after giving the small depositor(s)
an opportunity of being heard.
As per the
provisions of Section 58A(10) and 58AA(9) of the Act, any person who knowingly
fails to comply with the provisions of these sections shall be punishable
with imprisonment which may extend to three years and shall also be liable
to a fine of not less than Rs.500 per day, for the period during which
such non-compliance continues.
As per Section
58AAA every offence connected with, or arising out of acceptance of deposits
under Section 58A or 58AA, is a congnizable offence under the Code of Criminal
Procedure. Section 2(c) of Code of Criminal Procedures 1973, defines a
`Cognizable Offence' as an offence for which a police officer may, in accordance
with the first schedule under the Code or any other law for the time being
in force, arrest a person without warrant.
As Section
58AA(10) makes a director of the company liable for default, the implication
of Section 58AAA is that a police officer can arrest, without an arrest
warrant, a director of a company which has contravened any of the provisions
of Section 58A or 58AA.
Parks to
promote use of bio-technology to be set up in states
In an attempt
to promote bio-technology and its several applications, the government
is planning to set up bio-technology parks in Andhra Pradesh, Uttar Pradesh,
Madhya Pradesh, Kerala, Uttaranchal and several other states.
The Small Industries
Service Institute, Bangalore, is also planning to set up a bio-tech incubation
centre in Karnataka.
The main purpose
of these parks is to set up some institutional framework for the promotion
and application of bio-technology in states. The broad parameters for setting
up bio-technology parks include industrial competitiveness, existence of
biotech-based firms, availability of expertise and trained human resource,
basic infrastructure facilities, nature of bio-resources and financial
mobilisation.
Centre to
boost handloom sector in NE
Centre has
made a special provision of sharing 90 per cent of the total project cost
of Rs.690 crore to boost the handloom sector of North Eastern states, Sikkim,
Jammu and Kashmir. Project cost under Deen Dayal Hathkargha Protsahan Yojana,
which otherwise is equally shared by Central and State governments, would
be shared in the ratio 90:10 in these states and also for the backward
classes of the country, according to an official release in February 2001.
Finance
ministry files affidavit on SICA repeal
The Ministry
of finance on 06.02.2001 filed an affidavit in the Delhi High Court stating
that the government was considering a proposal to repeal the Sick Industrial
Companies (Special Provisions) Act, 1985.
The Act was
enacted with a view to secure timely detention of the sick and potentially
sick companies and to provide speedy determination by a Board of experts
for the preventive, ameliorative and remedial measures with respect to
such companies.
However, the
whole Act and especially, Section 22 of the Act has been grossly misused.
Section 22 gives protection to a sick company from litigation and recovery
proceedings.
The main grievance
against the Act and the Board for Industrial and Financial Reconstruction
is that unscrupulous promoters have utilised the BIFR process to stall
creditors from taking recourse to legal proceedings for recovery of their
dues by enjoying protection under section 22(1) of SICA. As such, artificial
sickness is created which is against public interest.
Enough funds
for microcredit
The Finance
Minister, Shri Yashwant Sinha said that there is no shortage of funds for
micro-credit while speaking at the Asia Pacific Region Micro Credit summit.
He further asked the industry to develop skills for handling it and ensuring
that the best possible returns accrue. On the issue of efficiency and success
of women self help groups he said. "It has led to silent revolution in
the field of microcredit".
While the RBI
has deregulated interest rate on loans given by banks to intermediate micro
finance institutions (MFIs) the Centre had announced a `micro finance fund'
with a contribution of Rs.400 crore each from NABARD and the RBI.
The experience
of banks in financing SHGs has been generally good. The number of SHGs
has increased from a meagre 255 in 1992-93 to 33,000 by March 1999. The
banks have financed 2 lakh SHGs thus bringing an estimated 4 million very
poor families within the fold of formal banking and more than 85 per cent
of these are women groups.
Empowering
women would ensure the best social security system. The task force on micro-finance
has estimated the microcredit business alone of the size of Rs.30,000 crore.
As these businesses graduate to higher levels of credit, the banks could
begin catering to the credit demand.
Rs. 2400
crore revival package for 3 banks
The banking
division of the ministry of finance has cleared a Rs.2,400 crore revival
package for three banks - Indian Bank, United Bank of India and UCO Bank.
Indian Bank,
which has already received Rs.800 crore earlier, will get about Rs.2100
crore. UCO Bank and UBI would get around Rs.200 crore and Rs.100 crore
respectively.
The Rs.2,400
crore package comprises an amount for recapitalisation apart from outgo
on the voluntary retirement scheme introduced by the three banks and other
costs incurred in areas like technology upgradation.
The revival
plan submitted by the three weak banks to the finance minister amounted
to about Rs.6,000 crore, including interest subsidy. Of this about Rs.2,500
crore was for recapitalisation, Rs.1,100 crore for VRS, Rs.400 crore for
technology upgradation and another Rs.1,000 crore for writing-off non-performing
assets.
Over the last
four years, the government has already provided around Rs.1,850 crore to
the three weak banks with Indian bank accounting for about Rs.800 crore
and UBI and UCO Bank getting about Rs.500 crore and Rs.650 crore respectively.
Sectoral
caps on foreign equity to go
The government
will lift sectoral caps on foreign equity to attract $10 billion annual
foreign direct investment flows, announce a package of incentives for special
economic zones and fix a higher than 18 per cent growth target for next
year in the face of surging exports.
The special
economic zone in Nangunery, Tamilnadu will have top-class infrastructure
- including uninterrupted power, clean water, a super speciality hospital
and airport and will have an investment of about $10 billion in phases,
besides attracting FDI almost double the amount, commerce and industry
minister Shri Murasoli Maran said on Feb.11, 2001 while inaugurating the
SEZ.
Bank panel
lists relief norms for quake-hit
A state-level
Bankers' Committee meeting held in Ahmedabad in February has formulated
a package of measures to sanction new loans to earthquake victims for housing,
trade, industry and agriculture.
As per the
package nodal offices would be set up by the banks in affected areas to
monitor and report the implementation of relief measures to the Control
Room on an ongoing basis.
Other decisions
taken by the banks include loan classification status in case of borrowers
affected by the quake to be frozen on "as is-where-is" basis till March
31, 2003, no demand for recovery to be made for two years with regard to
standard assets, no penalties to be levied in the event of non receipt
of repayments due during the next two years with regard to loans not classified
as standard assets.
During this
period the banks would charge simple interest at the rate of 10 per cent
per annum till March 31, 2003 and thereafter normal rate of interest will
be charged.
Loans up to
Rs.10 lakh will carry a rate of interest at PLR and for loans above Rs.10
lakh at the banks' discretion. No processing fees would be charged by the
banks for affected beneficiaries.
Banks have
also decided to grant loans upto Rs.2 lakh at interest rate not exceeding
PLR for repairs / construction of house/shops damaged by the earthquake.
Branch Managers have been vested with discretionary powers for granting
such facilities.
With regard
to advances to SSI business, transport, trade and industry, banks are to
consider sanction of additional limits/ rescheduling of existing limits
under a need based arrangement depending upon the past performance of borrower
and conduct of account.
Settlement
of claims made by nominees of depositors killed in the earth-quake would
be made within 48 hours and in other cases on the bank being satisfied
about legality of the claim. Payment upto Rs.50,000 in deceased claims
would be released against indemnity and affidavit.
The state agencies
would identify the persons affected by the earthquake and on the basis
of their certificate, granting of such loans will be made by banks. For
monitoring relief measures, SLBC will be convened on a monthly basis. The
monitoring committee consists of Dena, SBI, RBI BoB, BoI, Central Bank
of India, NHB, NABARD, SIDBI and Relief Commissioner, Secretary Agriculture
or his representative.
Citizen's charter issued
by RBI for Currency Exchange Facilities
1. You can
i)
Exchange your notes and coins in the denominations of your choice subject
to limits indicated at the public exchange counters.
ii) Exchange
your soiled notes at the specified counters subject to the limit indicated
per tender.
iii) Either
get your torn/cut/mutilated currency notes exchanged across the counter
subject to the provisions laid down in the RBI (Note Refund) Rules, in
force or by depositing them at the triple lock receptacle counter, in the
specified cover available free of cost at any RBI office. The exchange
value of such notes as admissible under the rules will be remitted to you
within 15 days.
2. All exchange
facilities are available free of charge.
3. You are
assured of prompt and courteous service throughout specified banking hours.
4. Please contact
the officer-in-Charge of the Grievance Redressal Cell in person or write
to him at your convenience for any suggestions/complaints about the currency
exchange facilities.
5. The facilities
are also available at the branches of public sector banks maintaining currency
chests/small coins depots. (A list of these branches is available with
the enquiry officer at any RBI office).
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