Section 3 of br act 1949
Radhakrishnan K.V.
(Querist) 18 November 2016
This query is : Resolved
Section 3 of BR Act is as follows:-
"Nothing in this Act shall apply to-
(a) a PACS;
(b) a PCARDB; and
(c) any other society, except in the manner and to the extent specified in Part V of the Act"
I would like to know whether the clause "except in the manner and to the extent specified in Part V of the Act"s applicable to "any other society" only or is it applicable to PACS and PCARDB as well, if the semi column and coma are taken into account?
Rajendra K Goyal
(Expert) 18 November 2016
Academic query, state material facts of the problem if any.
Radhakrishnan K.V.
(Querist) 18 November 2016
Thank you Goyal Sir,
Kerala HC in Muhammed usman vs Registrar of co-operative societies held that no co-operative society shall use the word "Bank"with its name unless it is a "Co-operative Bank" licensed by RBI. In another judgment, [2006 (3) KLT 38], division bench held that PACS are out side the purview of BR Act and therefore they shall use the word "Bank" with its name and can carry on banking business.
Income tax department in Kerala make use of the former decision and interpret that Banking business of PACS is illegal. Premier institutes also propagate this view.
Hence the doubt.
Sankaranarayanan
(Expert) 19 November 2016
Section 7. Use of words “bank”, “banker”, “banking” or “banking company”
1[Use of words “bank”, “banker”, “banking” or “banking company”. (1) No company other than a banking company shall use as part of its name 2[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.
(2) 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”.
(3) Nothing in this section shall apply to. —
(a) a subsidiary of a banking company formed for one or more of the purposes mentioned in sub-section (1) of section 19, whose name indicates that it is a subsidiary of that banking company;
(b) any association of banks formed for the protection of their mutual interests and registered under section 25 of the Companies Act, 1956
