Section 2 of The Public Financial Institutions (Obligation as to Fidelity and Secrecy) Act, 1983
- (1)In this Act, "public financial institution" means--
- (a)the Industrial Credit and Investment Corporation of India Limited, a company formed and registered under the Indian Companies Act, 1913(7 of 1913);
- (b)the Industrial Reconstruction Corporation of India Limited, a company formed and registered under the Companies Act, 1956(1 of 1956); or
- (c)any other institution, being a company as defined in section 617 of the Companies Act, 1956(1 of 1956) or a company to which the provisions of section 619 of that Act apply, which the Central Government may, having regard to the nature of the business carried on by such institution, by notification in the Official Gazette, specify to be a public financial institution for the purposes of this Act.
- (2)Every notification issued under clause (c) of sub-section (1) shall, as soon as may be, after it is issued, be laid before each House of Parliament.
Summary
- A public financial institution is defined to include specific corporations and companies.
- The first defined institution is the Industrial Credit and Investment Corporation of India Limited, registered under the Indian Companies Act, 1913.
- The second defined institution is the Industrial Reconstruction Corporation of India Limited, registered under the Companies Act, 1956.
- The Central Government can add other institutions to this list by publishing a notice in the Official Gazette (the public journal of the government).
- Any newly added institution must be a company under Section 617 or Section 619 of the Companies Act, 1956.
- Parliament must see every new notification as soon as possible after the government issues it.
Practical examples
FAQ
1. What does "public financial institution" mean under this Act?
It means the Industrial Credit and Investment Corporation of India Limited, the Industrial Reconstruction Corporation of India Limited, or any other institution specified by the Central Government.
2. Under which law must the Industrial Credit and Investment Corporation of India Limited be registered?
It must be registered under the Indian Companies Act, 1913 (Act 7 of 1913).
3. What act governs the registration of the Industrial Reconstruction Corporation of India Limited?
It is governed by the Companies Act, 1956 (Act 1 of 1956).
4. What must happen to a notification that adds a new institution?
It must be laid before each House of Parliament as soon as possible after it is issued.
5. Under what sections of the Companies Act, 1956, must a newly notified institution qualify as a company?
It must qualify as a company defined in Section 617, or be a company to which Section 619 applies.
Test yourself
Q1.Which of the following is specifically named in Section 2 as a public financial institution?
Q2.The Indian Companies Act of which year is associated with the Industrial Credit and Investment Corporation of India Limited?
Q3.Who has the power to specify additional public financial institutions by notification in the Official Gazette?
Q4.Under which section of the Companies Act, 1956 must an institution be defined as a company to be notified under Section 2(1)(c)?
Q5.What must be done with every notification issued under clause (c) of sub-section (1)?