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Everything About Private Security Agency License: Know the Procedure

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Introduction

Private security industry garnered much attention especially during the times when 26/11 attack took place in Mumbai. It was for the very first time that the security guards had encountered the terrorists attack in the premises of hotel Taj. As per the opinion of the expert panel, it came to light that the scenario would have been totally different if the security personnel would not have been adequately trained to face the situation head-on.

The private security industry in India flourished in the 60’s with support from few major players that dictated the course of its flow and progress. This industry is likely to expand in the coming years and the key driving factors behind such growth is attributed to the increase in the levels of insecurity, the culture that embraces the shopping malls, and also terror attacks entailing much prominence. 
Read Our Blog: Private Security Agencies

Above all, the private security agency is a kind of a promising business that seemingly can yield a bunch of profits. Another wonderful reason as to why one should try hands in engaging into a private security agency finds its basis on economic justification. 

It is believed that the insurance companies, preferably the companies that cover fire insurance readily agree to extend the lucrative discounts to such sites since it is ascertained that the possibility of the incident would be reduced largely owing to the presence of security personnel.

Private Security Industry and the Growing Challenges

Numerous challenges can surface with respect to the private security industry, few of them are jotted down below:

  • Concern with respect to compliances:

Private Security Agencies (Regulation) Act was drafted in the year 2005 by the central government. The states were encouraged to take appropriate actions so that it can well be enforced. It was seen that this Act was adopted by mostly all the states.

However, it soon came to light that there were ample delays that caused hindrance in the implementation of the Act. Given below are some of the issues that needs due attention, on event of implementation of the Act:

  1. As provisioned under the Act, it is fairly easy to kick start a private security business and in case there is no registration with respect to the business, the path to exit would not cause any problem either.
  2. The manpower forming the part of this industry is usually from the rural areas. Owing to the low levels of literacy, the people are not really fit to assume the role of the security personnel.
  3. There is an urgent need which requires the security personnel to be classified in a graded manner. This classification must be such which can be utilized to determine the remuneration.
  • An attempt to include fairness in employment practices:

It is usually seen that a security guard enjoys a relatively smaller age in career. Therefore it is very important that the agencies try to provide the best possible working conditions for the security guards. There should also be the involvement of such practices that appear more friendly for them.

What Really is a Private Security Agency?

Private security agencies can be construed to be a kind of an organization that extend the service of providing training to the security guards. The Act that serves as the backbone in this regard is known as The Private Security Agencies (Regulation) Act, 2005.

Role of State Government in the Appointment of Controlling Authority

As per the provisions enlisted under The Private Security Agencies (Regulation) Act, 2005, it can be said that the concerned state government is very much required to designate an officer, keeping in mind that such an officer should not in any case lag behind the rank as equivalent to a joint secretary who forms the part in the Home department of the concerned state.

The controlling authority is the entity that is endowed with the responsibility to look after that the private security license is duly issued within time together with its renewal. Moreover, any major operation associated with the private security agency is sought to be regulated by the controlling authority.

Further, the state government is empowered as provisioned under the Act to give effect to such rules which would ensure the implementation of the important provisions. It is with respect to this that many states have stepped forward in welcoming the concept of Private Security Agencies.

It is expected that with such a move, the responsibilities of the state would be effectively discharged without an iota of problem.

Obtain Private Security Agency License: Process in Detail

In accordance with the provisions of the act, it is made into a mandatory requisite that before setting up any business related to private security agency, the PSARA license needs to be obtained. Further, it should be highlighted as a matter of fact that no private security agency would be allowed to extend its services outside India, if no prior permission is obtained from the Controlling authority.

The Controlling authority, on receiving any request from a private security agency to extend its services outside India, would seek consultation from the central government whether the permission should be granted or not.

Hence, it is considered a necessary impediment that the PSARA license must be obtained by any agency seeking to launch the Private Security Agency business. Having obtained the license, it would enable such a business to have validity in the eyes of law and let it function smoothly.

Is There Any Eligibility Criteria in Respect of a Private Security Agency?

It must be duly noted that only an Indian Company would garner the eligibility to get a PSARA license to be issued, this holds true in case of association of people as well.

In case, any company wishes to extend the services of the private security agency, then the shareholders of such a company be of Indian origin that too on a majority basis.

Besides having to fulfill the above conditions, given below are the extended conditions that must also be met in order to fall under the eligibility bracket.

  1. On the first basis, no person would attract conviction in respect of an offence that is somehow connected to the formation of a company, along with its management and the related promotion. This is inclusive of any insolvent that has not been discharged.
  1. There would be no conviction of a person or an entity, with special reference to the company in case of an offence, wherein the given punishment in this regard accords the imprisonment of a tenure that should not be less than 2 years.
  2. Further, it is to be noted that no connections must be forged with the organization that is banned under any law, by the person that is seeking to have a private security agency. Also, on similar lines, no links must be maintained with any organization that carries out the activities that run on the nature to possibly threaten the national security or is even against the public order.
  3. Also, there would be no dismissal of the person who works under any government service on the sole grounds of moral turpitude or relating to any misconduct.

Is There Any Prescribed Fee That Must be Paid in Respect of Private Security Agency License?

Given below is the government fee which must be paid in order to obtain the private security agency license:

  • If the private security agency is found to be operating within the confinements of one district, then the fees stands at Rs. 5000/-.
  • If the private security agency is found to be operating within the confinements of either 1 or more districts, with the maximum capping at 5, then the fees stands at Rs. 10,000/-.
  • If the private security agency is found to be operating within the confinements of the entire state, then the fees stands at Rs. 25,000/-.

Once, the application has been made to obtaining the private security agency license, it would be put under a process of scrutiny, after which the Controlling Authority would come to a conclusion as to whether to grant or refuse the issuance of the license.

The above mentioned license would be granted subject to the approval by the Controlling Authority within the set time frame of sixty days from the date on which the application has been received. Once the license has been issued, it would probably remain valid for a period entailing five years. This license can also be renewed for a tenure of next five years after the prescribed fees has been paid. 

Intricacies of Having to Operate a Private Security Agency Business

Once the private security license has been obtained, the entity can begin its mode of operation within the period of six months, as starting from the very date the license is fetched. 

The role of the private security agency would largely be focused on extending training sessions to the security guards and ensuring that they receive the relevant skills. Besides the subject of security guards, it is pertinent that the supervisors be employed by the agency in accordance with the provisions of the Act.

Given below are the persons who fulfill the eligibility criteria to secure the position of a security guard or any supervisor with respect to the security guard:

  1. In the first place, the eligibility criteria is seemingly satisfied by any Indian citizen. Other than the Indian citizen it covers the citizen of other countries as specified by the central government in the official gazette.
  2. Next in line, comes the people who have attained the age of eighteen years but are yet to reach the mark of sixty five years.
  3. Person, by whom the agency has been satisfied with much regard to his character together with the antecedents.
  4. In addition, it covers within its ambit, the people who have successfully garnered the training sessions of being a security personnel.
  5. Persons who invariably meet the set physical standards.
  6. Persons who do not entail any conviction as adjudged by a competent court.

Preferences must be presented by the private security agencies while choosing the private security guard, with reference to the people who have contributed their service in the forces as given below:

  1. People who have served in the Army.
  2. Then comes the people who have contributed their service in the Navy.
  3. Air force personnel.
  4. Armed forces under the union.
  5. Person who served as the home guard.
  6. Last but not the least, people who have served as the police.

PSARA License and the Related Advantages

PSARA license offers numerous advantages, some of them are listed below:

  1. PSARA License fosters ways to empower the training company.
  2. This license is used as a means to attracting the potential customers.
  3. With the help of PSARA License, it can be assured that the rights and services are not denied in any case.
  4. It ensures that the trust is secured with the customers.
  5. The agency can profit with the PSARA License since it enhances its credibility.
  6. This license ensures that the private security agency functions in a smooth manner without having to face any obstruction to come in the way.

Want to Obtain PSARA License? Know the Procedure in Detail

Given below are the steps that can be referred to in obtaining the PSARA License:

  1. In first place, certain documents must be collected which include the Permanent Account Number, registration under the shops and establishments Act, provident fund registration, and tax deduction account number (TAN).
  2. The applicant must resort to entering into a memorandum of understanding with that of an institute that extends the service of training the security guards. It is a necessary impediment that such an organization must entail the prior approval as gained from the state Controlling authority.
  3. The applicant must make use of Form-1 in order to apply for the much needed police verification. In case the applicant stands to be an organization or a firm, then verification would be requested on a separate basis.
  4. The Controlling authority of PSARA is the entity before which the application needs to be filed, following which the application is verified. Once the no objection certificate is received from the concerned police official, the application can either be granted or rejected by the State Controlling Authority which is backed by an explanation. 
  5. PSARA License is obtained within a period of sixty days from the date on which the application is filed. The process that is followed with respect to obtaining the PSARA License is unique in each state. 

Under What Circumstances Can the PSARA License be Canceled?

Certain grounds have been provisioned under the PSARA Act, 2005 with special reference to section 13. Under these grounds, the PSARA License stands canceled, which are as given below:

  1. The said license was fetched through the means of misrepresentation or by way of suppressing the facts that are quite material.
  2. The license was obtained by presenting the false documents.
  3. If any of the provisions of the PSARA Act, 2005, stands infringed.
  4. There has been misuse of the information by the license holder while the agency was discharging its duty of extending the security.
  5. If in any case there has been impersonation of the government servant by the license holder.
  6. There has been a failure on part of the license holder to extend the services which were agreed upon.
  7. The license holder has resorted to doing something which is in direct contravention with the order of the court.
  8. There is a possibility of a threat to the national security as posed by the said license holder.

Conclusion

In the nutshell, it can be concluded that any agency that wishes to operate the private security agency business in India must obtain the PSARA License so that they function smoothly without having to face any obstruction. 

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Author
Vinay Singh
Vinay Thakur is Managing Partner in Corpseed. He focused on payments, digital transformation, and financial technology for over 15 years and holds strong expertise on fintech startups, banking innovation, and investors with a keen understanding of the trends and activities of startups, banks, and investors in the space.