KHADC directs pvt banks to obtain trading license

SHILLONG, Feb 1: All private banks operating within the jurisdiction of the Khasi Hills Autonomous District Council will have to obtain a trading license from the council.
The council’s licensing officer has issued a notice to the banking institutions in this regard according to the provisions laid down under the United Khasi-Jaintia Hills District (Trading by Non-Tribals) Regulation of 1954, KHADC Deputy Chief Executive Member PN Syiem said on Thursday.
He said any trade or business for profit that includes the exchange of goods or services for other goods or money shall come under the purview of Section 2(5) of the regulation.
He, however, said the council will examine whether the nationalised banks such as State Bank of India or Meghalaya Rural Bank fall under the regulation.
Section 2(5) of the regulation says any service under the Union or state government shall be construed accordingly. “It will depend on the interpretation of the council whether nationalised banks will need to obtain the trading license,” he said.
He also said he is not aware of 30 SBI branches in East Khasi Hills having submitted applications to obtain a trading license.
“But I know that notices have been served to all the private banking institutions. Many of them have already replied to the notices issued by the council,” he said.
Asked why the council has only now realised that banks need to obtain the trading licenses, Syiem said the officials noticed this recently after going through the provisions of the relevant regulation.
The KHADC recently wrote to Laitumkhrah branches of the UCO and Canara Bank asking why action should not be taken against them for conducting their businesses without obtaining a trading license.
Section 3 of the United Khasi-Jaintia Hills District (Trading by Non-Tribals) Regulation 1954, as amended to date, requires that businesses obtain a valid trading license from the council before starting operations.
The licensing officer’s order on January 22 stated: “You are hereby directed to show cause in writing within 15 (fifteen) days from the date of receipt of this order as to why action should not be taken against you under the provisions of the aforesaid regulation.”
The rationale behind the banks’ requirement to obtain trading licenses from the council is being questioned, though. Questions are also being raised as to whether government offices would also need to obtain trading licenses from the KHADC.