EconomyGS-II· 1 min read
Kerala Lok Ayukta bars unregistered institutions from using 'Bank' in names
Why in news?
The Kerala Lok Ayukta has directed unregistered institutions not to use the words 'Bank,' 'Banker,' or 'Banking' in their names or business, citing potential confusion and financial fraud, and reinforcing provisions of the Banking Regulation Act.
Key points
- Prohibits unauthorized use of 'Bank', 'Banker', 'Banking' by non-licensed entities.
- Aims to prevent financial frauds and protect depositors, especially vulnerable sections.
- Emphasizes the need for prior RBI approval for cooperative societies using these terms.
- Directs the Registrar of Cooperative Societies to implement public awareness measures.
Background & context
The Banking Regulation Act, 1949, restricts the use of 'Bank' to licensed banking companies. The Banking Regulation (Amendment) Act, 2020, further clarified rules for cooperative societies.
★ Prelims fact capsule
The directive was issued by a Division Bench of Kerala Lok Ayukta, comprising Justice N. Anilkumar and Justice Ashok Menon.
✎ Mains relevance
GS Paper II: Governance, Consumer Protection, Financial Regulation.