The move comes after fresh notices had been served on 2.97 lakh companies that had failed to respond to show-cause notices as part of the action on shell companies. pti file photo
The government on Tuesday asked banks to immediately block the accounts of nearly 2.1 lakh companies, including over 11,000 from Bengaluru.
The names of these firms were struck off from the Registrar of Companies for not filing returns and completing other formalities.
Following this, the directors of such companies will be barred from operating their accounts.
The move comes after fresh notices had been served on 2.97 lakh companies that had failed to respond to show-cause notices as part of the action on shell companies.
“The names of 2,09,032 companies have been struck off from the Registrar of Companies under Section 248 (5) of the Companies Act. The existing directors and authorised signatories of such struck off companies will now become ex-directors or ex-authorised signatories. These individuals will therefore not be able to operate bank accounts of such companies till such companies are legally restored...,” the finance ministry stated.
“....action has been initiated to restrict the operation of bank accounts of such companies. The department of financial services has, through the Indian Banks Association, advised all banks that they should take immediate steps to put restrictions on bank accounts of such struck off companies,” the ministry stated.
The crack down on such companies started after a massive data mining of money stocked with banks post demonetisation.
As a precautionary measure, banks have also been asked to enhance due diligence while dealing with companies in general.
“A company even having an active status on the website of the ministry of corporate affairs but defaulting in filing of its due financial statement(s) or annual return(s) of particular of charges on its assets on the secured loan should be seen with suspicion..., the finance ministry added.