(a) "Act" means the Sikkim Protection of Interests of Depositors (in Financial Establishments) Act, 2009;
(b) "Competent Authority" means the Authority appointed under sub-section (1) of section 3 of the Act;
(c) "deposit" means the deposit of money either in one lump sum or by installments made with a Financial Establishment for a fixed period.
for interest or for return in any kind or for any .service:
(d) "Financial Establishment" means an individual or an association of individuals, a firm or a company registerGd under the Companies Act, 1956 (1 of 1956) or under the Registration of Companies Act Sikkim, 1961 carrying on the business of receiving ceposrts under any scheme or arrangement or in any other mariner but does not \ 1\ !, Competent Authority 3.
Trade license and office.
Registration with Competent Authority.
Permission for accepting deposits.
include a corporation or a cooperative society owned or controlled by the Central Government, any State Government or a banking company as deflned in section 5 ( c ) of the Banking Regulation Act, 1949 (X of 1949);
(e) "Government' means the State Government of Sikkim;
(f) "prescribed" means prescribed by rules made under this Act.
CHAPTER II
(1) The Government may, by notification, appoint one or more authorities for such area or areas or for such case or cases as may be specified in the notification as Competent Authority to exercise powers authorized by this Act.
(2) The Competent Authority shall have such other powers as may be necessary for carrying out the purposes of this Act.
4. A Financial Establishment intending to carry out its business in the State shall obtain a trade license from the Urban Development and Housing Department and shall also establish its office in the State.
5. (1) Upon grant of a trade license by the Urban Development and Housing Department, the-Financial Establishment shall apply to the Competent Authority for registration in such form as may be prescribed, and shall also pay such fee as may be prescribed.
(2) The Competent Authority may register the Financial Establishment upon fulfilling all the conditions prescribed for registration, and issue a certificate of registration:
Provided that the registration so granted shall become void at the expiry of validity of the trade license from the Urban Development and Housing Department.
6. (1) A registered Financial Establishment shall apply to the Competent Authority for permission to accept deposits, duly specifying the maximum amount that the Financial Establishment intends to receive as deposits, and furnishing such information and documents as may be prescribed, and no deposit shall be received by the Financial Establishment without prior written permission from the Competent Authority.
(2) A Financial Establishment may, at any time, apply to the Competent Authority for enhancement of the maximum amount which it is authorized to receive as deposit, and the Competent Authority may consider such request on merit and pass appropriate orders provided that the Financial Establishment furnishes adequate security as required under sub-section (1) of section 7, Security to be 7.
furnished.
(1) Before issue of permission under section 6, the Financial execute a bond in favour of the Competent Authority charging immovable -2- l 1 1 } I, i "":i f !
(, / ( I Bar on receiving certain deposits.
Application for deposits.
property for the value of not less than 50 (sixty)per cent of the proposed total amount of deposits which it intends to receive; or
(i) make a fixed deposit of an amount not less than 60 (sixty) per cent of the proposed total amount of deposits which it intends to receive, in a Schedule bank in favour of the Competent Authority for a period not less than 36 (thirty-six) months or
(ii) invest in Government securities in favour of theCompetent Authority an amount not less than 50(sixty) per cent of the proposed total amount of deposits which it intends to receive; or
(iii) furnish a bank guarantee valid for 3 (three) years from a Scheduled bank in favour of the Cornpetent-Authority for an amount not less than 50 (sixty) per cent of the proposed total amount of deposits which it intends to receive:
Provided that the bank guarantee so furnished shall be converted by the Competent Authority to a fixed deposit in its favour in a Scheduled bank if a fresh bank guarantee or any other instrument of security mentioned at serial numbers (i), (ii) or (iii) above for an equal amount is not furnished by the Financial Establishment not less than five working days before the date of expiry of the existing bank guarantee;
(2) The Competent Authority may at its discretion permit the Financial Establishment to furnish security in more than one manner mentioned above for an aggregate amount not less than 60 (sixty) per cent of the proposed total amount of deposits which it intends to receive.
(3) The Competent Authority may at any time permit the Financial Establishment the substitution of one or more security with another security mentioned at sub-section(1)
(4) The security furnished by the Financial Establishment shall not be liable to be attached in execution of a decree or otherwise until the deposits with the returns thereof are fully paid to the depositors.
8. (1) A Financial Establishment shall not receive or renew any deposit which is repayable on demand
(2) A Financial Establishment shall not receive or renew any deposit which is repayable before a period of 6 (six) months or after expiry of 36 (thirty-six) months.
(3) A Financial Establishment shall not invite, receive or renew any deposit at a rate of interest which is more than 3 (three) per cent by a Scheduled commercial bank for the corresponding amount and period of deposit.
() (1) A Financial Establishment shall not accept or renew any deposit except on a written application from the depositor in the form as may be prescribed to be supplied by the Financial Establishment at its own cost.
(2) Such application form shall inter alia contain the following particulars, namely:-
(a) the name, address and phone number of the registered office of the Financial Establishment;
-3- Receipts to be issued for deposits.
Record of money received from depositors.
Security deposits from employees.
(b) the name, address and phone number of the main office of the Financial Establishment in Sikkim;
(c) the category" of the depositor, namely whether the depositor is a shareholder or a director or a promoter the Financial Establishment or a member of the public;
(d) introduction of the depositor if he/she is a new depositor;
(e) the period of deposit;
(f) the rate of interest, and the total amount payable to the depositor by the financial Establishment on maturity of the deposit;
(g) the date on which the maturity amount will be payable to the depositor;
(h) the rate of interest which will be payable to the depositor incase the depositor withdraws the deposit prematurely.
10. Every Financial Establishment shall, for every amount received by it as deposit, furnish to the depositor or his agent a receipt containing the date of deposit, the name and address of the depositor, the amount received in figures and words, the rate of interest and the date on which the deposit is repayable, and such receipt shall be signed by an officer authorized by the Financial Establishment in this behalf:
Provided that if such receipt pertains to installments subsequent to the first installment of a recurring deposit, it need not contain particulars other than the name of the depositor, the date of receipt and the amount deposited.