Bank accounts of 2,00,000 Indian firms frozen

Wednesday 13th September 2017 06:09 EDT

The Government of India ordered freezing banks accounts of over 2,09,000 companies whose names have been struck off from the records, saying action would be taken against more such firms. A senior financial ministry official said banks have also been asked to step up their vigil against those companies that are non-compliant with various regulations and not carrying out business activities for long. They said banks have been directed to freeze the bank accounts of deregistered companies.

Warning that the action would be taken against erring firms, the official said the efforts would help enhance corporate governance standards and clean up the system that otherwise is prone to be misused. “The names of 2,09,032 companies have been struck off from the register of companies under Section 248 (5) of the Act. The existing directors and authorised signatories of such struck-off companies will now become ex-directors or ex-authorised signatories,” an official release said. Section 248 of the Companies Act, which is implemented by the corporate affairs ministry, provides powers to strike off names of companies from the register on various grounds including for being inactive for long.

The official said since these companies ceased to be legal entities, there was no reason having active bank accounts which could be prone to misuse. Minister of State for Corporate Affairs, PP Chaudhary said, “Furthering our war against black money, banks have been advised to immediately restrict bank accounts of struck-off companies.”

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