9911796707
TMI Blog2004 (2) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... egulation Act (for short the Act) became applicable to Sikkim. Section 22 of the Act reads as follows: 22. LICENSING OF BANKING COMPANIES.- (1) Save as hereinafter provided, no company shall carry on banking business in India unless it holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued subject to such conditions as the Reserve Bank may think fit to impose. (2) Every banking company in existence on the commencement of this Act, before the expiry of six months from such commencement, and every other company before commencing banking business in India, shall apply in writing to the Reserve Bank for a licence under this section : Provided that in the case of a banking company in existence on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities available in the proposed principal area of operations of the company, the potential scope for expansion of banks already in existence in the area and other relevant factors the grant of the licence would not be prejudicial to the operation and consolidation of the banking system consistent with monetary stability and economic growth; (g) any other condition, the fulfillment of which would, in the opinion of the Reserve Bank, be necessary to ensure that the carrying on of banking business in India by the company will not be prejudicial to the public interest or the interests of the depositors. (3A) Before granting any license under this section to a company incorporated outside India, the Reserve Bank may require to be satisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Reserve Bank cancelling a licence under this section may, within thirty days from the date on which such decision is communicated to it, appeal to the Central Government. (6) The decision of the Central Government where an appeal has been preferred to it under sub-section (5) or of the Reserve Bank where no such appeal has been preferred shall be final. SBL applied for a license. It appears that RBI did not issue any notice informing SBL that the license could not be granted. Thus SBL continued to carry on banking business by virtue of the proviso of sub- clause (2). In 1996 RBI pointed out certain operational deficiencies in the working of SBL. SBL was called upon to cure those deficiencies before the license could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 45 (2) of the Act. SBL filed a Writ Petition in the High Court of Sikkim challenging the Order of Moratorium. However, the Petition was dismissed on 2nd September, 1999. The Special Leave Petition filed against the Order has also been recently dismissed. On 21st December, 1999 the Government of India issued an Order notifying a Scheme of Amalgamation under Section 45(7) of the Act. By this scheme SBL was amalgamated with the Union Bank of India (for short UBI). Under the scheme all the depositors were to be paid on pro-rata basis. It is an admitted position that the depositors are only getting 9.037 % of their deposits and they are required to surrender their fixed deposit receipts in return. It was submitted that the scheme i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
