COMPLAINT WITH RBI REGARDING VIOLATION OF SECTION 11 OF THE COMPANIES ACT
manmohan Obcretiredemployee
The Governor, 22.08.2018
Reserve Bank of India,
Central office,
Shahid Bhagat Singh Marg,
Mumbai -400001.
Dear Sir,
Sub: Complaint regarding non- compliance of section 11 of the Companies act 1956.Read with Section 35 of the Banking Regulation Act 1949.
This has a reference to RBI letter DBR.Appt.NO. 1199/08.96.004/2018-19 dated August 9, 2018.
I observe that it has taken a period of almost 5 months for RBI to reply to my complaint/ RTI query and I am constrained to feel my appeal to the Appellate authority has forced you to send this ambiguous and evasive reply.
I reiterate that my complaint is not against IBA, (an illegal /unincorporated body which claims itself to be a representative body of banks operating in India) but against the Banks which are helping IBA in perpetuating fraud under section 11 of the Companies act 1956.
I add that Reserve Bank of India has been mandated by an act of parliament (Banking Regulation Act as amended from time to time) to oversee and regulate the banking activities by various banks operating in India by:-
1.By ordering annual statutory audits.
2. By periodical inspection by RBI.
3. By offsite monitoring and surveillance by RBI.
4. By number of reports asked by RBI.
5. Calling for any information from the Banks, as the need may be
6. BY NOMINATING SENIOR OFFICER FROM RBI AS THE NOMINEE DIRECTOR ON THE BOARDS OF THE BANK.
And What is the role of Nominated director?
To oversee working of the Banks and also to ensure that the policies framed by RBI and G.O.I are properly followed and implemented. This also includes compliance by the Banks, the laws of the land which also includes the Companies Act.
The management of Indian Banks Association (a non-legal entity, non-juridical person) comprises of MD & CEO’S of public and private sector Banks operating in India. They all are public servants by virtue of being the senior management of the respective banks and they are there in management of IBA as representatives of respective banks. And these banks are regulated under BANKING REGULATION ACT monitored and controlled by RBI.
How does IBA (a non-legal entity) performs an act of gain? Can ever IBA (a non-juridical person) perform an act of gain (which is prohibited under section 11 of Companies act) without the fund contributions in the form of annual subscriptions, commission for negotiations of wages and Infrastructure Development Fund (when IBA has no infrastructure of its own) from Banking system, Public sector as well as Private sector.
From where does IBA gets funds (act of gain)? Not from thin air.
The management of IBA (a non- juridical person, an unregistered association) is collection of persons comprised of MD’S & CEO’S of Public &Private Sector Banks. Here at IBA, these are not MD& CEO but a collection of persons. As MD & CEO’S (public servants) of Banks, they are diverting/channeling/funneling pubic fund to an account which is controlled by the very MD & CEO’S where they are simply persons without any accountability and responsibility. Public fund is systematically diverted to private hands. IS THIS NOT MONEY LAUNDRING
Who is helping IBA (a non-juridical person) in performing of an act OF GAIN which is prohibited by law and punishable by fine and IMPRISONMENT? It is- PUBLIC AND PRIVATE SECTOR BANKS. These Banks are party to the illegal activities of IBA (itself a non-legal entity).
This is a perpetual fraud being committed by these Banks under the supervision of RBI and its senior officers who are on the Boards of these very Banks as Nominated Directors.
Has any of the statutory Auditors ever reported this crime being committed by these Banks?
Has ever any Nominated Director from RBI reported about the willfully committed perpetual fraud by these Banks. All these payments are from Public fund. This is perpetual dereliction of duty by senior officers of RBI nominated as Directors on the board of these banks. Rather they are also part of the fraud.
If RBI still feels that the unlawful act of IBA under section 11 of the Companies act 1956 is not in the domain of RBI, then I take this opportunity to draw the kind attention of Honorable Governor to Section 7(2) of the BANKING REGULATION ACT. I am sure that RBI will understand that for the purposes of regulation of Banking RBI is the sole regulator/monitor/authority. This clearly establishes that section 7(2) of this act also falls within the Jurisdiction of RBI.
The section 7(2) of the B.R. act states: {No firm, individual or group of individuals, 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”}.
7(3b) of this act states “Nothing in this section shall apply to –(b) any association of Banks formed for the protection of their mutual interests and registered under section 25 of the Companies Act, 1956(1) of 1956”.
Indian Banks association bears name “Bank” in its title.
IBA is nothing but a group of persons (being unregistered association under Societies act) and it is not registered under section 25 of the companies act.
I am very much sure that the Honorable Governor will very much understand that section 7(2) of the banking regulation Act is within the domain of RBI and RBI only.
It will be my honor to bring it to the kind notice of Honorable Governor, the existence of another section of B.R. Act i: e Section 46. This deals with penalties for violation of any section or act of Banking Regulation Act 1949. The penalty also involves IMPRISONMENT up to 3 years. Half of the management of IBA is already charge sheeted by CBI. Rest will follow.
Please note that there is no discretion available with the Honorable Governor for not enforcing of Section 7(2) and Section 46 of the Banking Regulation act 1949.
I have no personal interest involved in this. My interest is that Let the Law of the Land prevail.
It requested that the RBI may issue directives to all banks (without any further delay) to follow Regulation 7(2) of the Banking Regulation Act 1949. Implementation of regulation 46 of the B.R. act is in the domain of Honorable Governor of RBI for which he has no discretion for not enforcing it.
As already 5 months have passed since I lodged my complaint, I am sure my complaint will be satisfied at the earliest under intimation to me. I am sure, you will not let me knock the door of CBI court.
Thanking you,
Yours Sincerely,
M.S. Sidhu
#1509, sector 11-D, Chandigarh -160011.
Mobile:9876101509
e-mail: obcretire...@gmail.com
Chandrasekhara sastri Ghatti
Dear Shri M.S.Sidhu
Thanks you very much for fighting with RBI on IBA,s propriety in dealing with bank staff/officers wage negotiations.
We cannot blame IBA alone.When Finance Ministry and RBI are ingnorant or feign ingnorance of the status of IBA even after being told in various representations to them that IBA is not a Public authority under RTI Act and not answerable to GOI as they are getting any funds from GOI.May be, RBI and Finance Ministry do not know that very recently One High Court held that IBA is a Public Auyhority under RTI Act,and IBA has gone in appeal against High Court judgement that it is not a Public Authority and hence does not come underunder RTI Act.
After Nationalisation,the PSBs being wholly owned by GOI there is no necessity for them to be members of an organisation IBA whose main purpose is to laise with Finance Ministry or RBI.
On the date of Nationalisation the Finance Ministry should have asked the Nationalised Banks to come out IBA.PSBs would have releif from misinterpretation of law and wrong advice and the PSB staff and retirees would have got their lawful entitlements as per the laws of the land and not at the mercy of IBA.
Staff of all cadres work
for theif resprctive banks and not for IBA.PSBs at least should behave like model employers and follow the instructions of Finance Ministry and RBI. And RBI and Finance ministry should not seek advice from IBA but if need be they should a committee of CEOs of PSBs and take theirrecommendations/suggetions.
The funniest thing is IBA takes opinion from their lawyers on verdict given by Supteme Court also before advising their member Banks.That is the respect they have for the law of the land and also to the verdicts of Supreme Court.
I suggest that you foward Copies of your correspondence with RBI to CVC seeking their intervention as RBI is also not doing what they should do as per Banking Regulation Act.