Kerala Lok Ayukta bans unregistered institutions from using the words bank, banking and banker in their names and business
The Kerala Lok Ayukta has prohibited unregistered institutions from using terms like 'bank' or 'banking' in their business names to prevent public confusion and financial fraud. The directive mandates the Registrar of Cooperative Societies to enforce these rules to protect small depositors.
Why it matters
This regulatory action aims to safeguard economically vulnerable citizens from fraudulent financial schemes that masquerade as legitimate banking institutions.
Institutions that are not authorised under the Banking Regulation Act, 1949, shall not be allowed to use the words ‘Bank,’ ‘Banker,’ or ‘Banking’ in their names or in connection with their business, the Kerala Lok Ayukta has held. A Division Bench of the forum consisting of Lok Ayukta Justice N. Anilkumar and Upa Lok Ayukta Justice Ashok Menon directed the Registrar of Cooperative Societies to take effective and continuing steps, including public awareness measures, to prevent such misuse and to safeguard the interests of depositors.
The order was passed in a petition filed by one Babu Joseph, who highlighted the provisions of the Banking Regulation (Amendment) Act, 2020, which barred the cooperative societies from using the words bank, banker and banking in their names and business without the prior approval of the Reserve Bank of India (RBI).
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in