Chapter-2 Provisions Relating to License

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Prohibition on carrying out act of financial intermediation without license: After the commencement of this Act, no one shallcarry out, or cause to be carried out, the act of financial intermediation pursuant to this Act, 8 without obtaining license.

Application to be made for license: If an institution, which has been registered with objective to carry out the act of financial intermediation, intends to carry out the act of financial intermediation pursuant to this Act, the institution has to make an application to the Bank in the prescribed format setting out the following details:
(a) Association registration certificate and the statute of the institution,
(b) Names, addresses and occupations of the office-bearers of the institution,
(c) Total number of members of the institution,
(d) Movable and immovable property of the institution,
(e) Geographical area where the institution intends to carry out the act of financial intermediation,
(f) Other matters as prescribed.

License to be issued: (1) If an application is made pursuant to Section 4, the Bank shall make necessary examination of the application, and if in so examining, it considers necessary to seek additional information or details, it may seek additional information or details form the institution making such an application.
(2) If, in making examination pursuant to Sub-section (1), the Bank considers appropriate to issue the license, it shall issue the license to the applicant, in the prescribed format, carry out the act of financial intermediation, by collecting the prescribed fees.
(3) In issuing the license pursuant to Sub-section (2) or in giving information of rejection, 9 such license or information has to be issued or given within a maximum period of Seventy Five days10 after the date of receipt of application or the date of receipt of additional information or details where such additional information or details have been sought pursuant to Sub-section (1).
(4)11 ……………….

Power to specify terms: (1) In issuing the license pursuant to Section 5, the Bank may specify terms required to be abided by the institution in carrying out the act of financial intermediation.
(2) It shall be the duty of the institution to abide by the terms specified pursuant to Sub-section (1).

To obtain renewal: (1)12 An institution has to obtain renewal of the license from the Bank as prescribed in every Two years.
(2) In the event of failure to obtain the renewal of the license within the time limit as referred to in Sub-section (1), such a license shall ipso facto be canceled.
(3) Other provisions relating to the renewal of license shall be as prescribed.

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Chapter-2 Provisions Relating to License

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