BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1970

BANKING COMPANIES
(ACQUISITION AND TRANSFER
OF UNDERTAKINGS) ACT,1970
(5 of 1970)
[As amended by The Banking Companies (Acquisition and Transfer of
Undertakings) and Financial Institutions Laws (Amendment) Act,
2006 vide amendment dated 25.9.2006, effective 16.10.2006]
An Act to provide for the acquisition and transfer of the undertakings of
certain banking companies, having regard to their size, resources,
coverage and organisation, in order to control the heights of the economy
and to meet progressively and serve better, the needs of development of
the economy in conformity with national policy and objectives and for
matter connected therewith or incidental thereto.
Be it enacted by Parliament in the Twenty-first Year of the Republic of India
as follows:-
CHAPTER I
Preliminary
1. Short title and commencement.
(1) This Act may be called the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970.
(2) The provisions of this Act (except section 21, which shall come into
force on the appointed day) shall be deemed to have come into force
on the 19th day of July, 1969.
2. Definitions.--
In this Act, unless the context otherwise requires,-
(a) "appointed day" means the 14th day of February, 1970, being the
day on which the Banking Companies (Acquisition and Transfer
of Undertakings) Ordinance, 1970 (3 of 1970), was promulgated;
(b) "banking company" does not include a foreign company within the
meaning of section 591 of the Companies Act, 1956 (1 of 1956);
(c) "commencement of this Act" means the 19th day of July, 1969;
(d) "corresponding new bank", in relation to an existing bank,
means the body corporate specified against such bank in
column 2 of the First Schedule;
(e) "Custodian" means the person who becomes, or is appointed,
a Custodian under section 7;
(f) "existing bank" means a banking company specified in column 1
of the First Schedule, being a company the deposits of which, as
shown in the return as on the last Friday of June, 1969, furnished
to the Reserve Bank under section 27 of the Banking Regulation
Act, 1949, (10 of 1949), were not less than rupees fifty crores;
(fa) “prescribed" means prescribed by regulations made under this Act;
(g) "Schedule" means a Schedule to this Act;
(h) words and expressions used herein and not defined but
defined in the Banking Regulation Act, 1949 (10 of 1949), have
the meanings respectively assigned to them in that Act.
(i) Words and expressions used herein and not defined either in this
Act or in the Banking Regulation Act, 1949 (10 of 1949) but defined
in the Companies Act, 1956 (1 of 1956) shall have the meanings
respectively assigned to them in the Companies Act, 1956.
CHAPTER II
Transfer of the Undertakings of Existing Banks and Share Capitals of
the Corresponding New Banks
3. Establishment of corresponding new banks and business thereof.
(1) On the commencement to this Act, there shall be constituted such
corresponding new banks as are specified in the First Schedule.
(2) The paid-up capital of every corresponding new bank
constituted under sub-section (1) shall, until any provision is
made in this behalf in any scheme made under section 9, be
equal to paid-up capital of the existing bank in relation to
which it is the corresponding new bank.
(2A) Subject to the provisions of this Act, the authorised capital of
every corresponding new bank shall be one thousand five
hundred crores of rupees divided into one hundred fifty crores
fully paid-up shares of ten rupees each:
PROVIDED that the Central Government may, after consultation with
the Reserve Bank and by notification in the Official Gazette, increase
or reduce the authorised capital as it thinks fit, so however that after
such increase or reduction, the authorised capital shall not exceed
three thousand crores or be less than one thousand five hundred
crores, of rupees.

(2B) Notwithstanding anything contained in sub-section (2), the paid
up capital of every corresponding new bank constituted under
sub-section (1) may from time to time be increased by,-
(a) such amounts as the Board of Directors of the
corresponding new bank may, after consultation with
the Reserve Bank and with the previous sanction of the
Central Government, transfer from the reserve fund
established by such bank to such paid-up capital;
(b) such amounts as the Central Government may, after
consultation with the Reserve Bank, contribute to such
paid up capital;
(c) such amounts as the Board of Directors of the corresponding
new bank may, after consultation with the Reserve Bank and
with the previous sanction of the Central Government, raise
whether by public issue or preferential allotment or private
placement, if equity shares or preference shares in
accordance with the procedure as may be prescribed, so,
however that the Central Government shall, at all times, hold
not less than fifty one per cent of the paid-up capital
consisting of equity shares of each corresponding new bank.
PROVIDED that the issue of preference shares shall be
in accordance with the guidelines framed by the
Reserve Bank specifying the class of preference shares,
the extent of issue of each class of such preference
shares (whether perpetual or irredeemable or
redeemable) and the terms and conditions subject to
which, each class of preference shares may be issued.
(2BB) Notwithstanding anything contained in sub-section (2),
the paid-up capital of a corresponding new bank
constituted under subsection (1) may, from time to time
and before any paid-up capital is raised by public issue
or preferential allotment or private placement under
clause (c) of sub-section (2B), be reduced by(
a) the Central Government, after consultation with the
Reserve Bank, by cancelling any paid-up capital which
is lost, or is unrepresented by available assets;
(b) the Board of Directors, after consultation with the Reserve
Bank and with the previous sanction of the Central
Government, by paying off any paid- up capital which is in
excess of the wants of the corresponding new bank:
PROVIDED that in a case where such capital is lost, or is
unrepresented by available assets because of amalgamation
of another corresponding new bank or a corresponding new
bank as defined in clause (d) of section 2 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act,
1970 (5 of 1970) with the corresponding new bank, such
reduction may be done, either prospectively or retrospectively,
but not from a date earlier than the date of such amalgamation.
(2BBA)(a) A corresponding new bank may from time to time and after
any paid-up capital has been raised by public issue or
preferential allotment or private placement under clause (c) of
sub-section (2B), by resolution passed at an annual general
meeting of the shareholders entitled to vote, voting in person, or,
where proxies are allowed, by proxy, and the votes cast in favour
of the resolution are not less than three times the number of the
votes cast against the resolution by the shareholders so entitled
and voting, reduce its paid-up capital in any way.
(b) without prejudice to the generality of the foregoing power the
paid-up capital may be reduced by,-
(i) extinguishing or reducing the liability on any of its
shares in respect of share capital not paid-up;
(ii) either with or without extinguishing or reducing liability on
any of its paid up shares, cancelling any paid-up capital
which is lost, or is unrepresented by available assets, or
(iii) either with or without extinguishing or reducing liability
on any of its paid-up shares, paying off any paid share
capital which is in excess of the wants of the
corresponding new bank.
(2BBB) Notwithstanding anything contained in sub-section (2BB) or subsection
(2BBA), the paid-up capital of a corresponding new bank
shall not be reduced at any time so as to render it below twenty-five
per cent of the paid-up capital of that bank as on the date of
commencement of the Banking Companies (Acquisition and
Transfer of Undertakings) Amendment Act, 1995.]
(2C) The entire paid-up capital of a corresponding new bank, except the
paid-up capital raised from public by public issue or preferential
allotment or private placement under clause (c) of sub-section (2B),
shall stand vested in and allotted to the Central Government.
(2D) The shares of every corresponding new bank not held by the
Central Government shall be freely transferable:
PROVIDED that no individual or company resident outside India or any
company incorporated under any law not in force in India or any branch of
such company, whether resident outside India or not, shall at any time hold
or acquire by transfer or otherwise shares of the corresponding new bank
so that such investment in aggregate exceed the percentage, not being
more than twenty per cent, of the paid-up capital, as may be specified by
the Central Government by notification in the Official Gazette.
Explanation: For the purposes of this clause "company" means any
body corporate and includes a firm or other association of individuals.
(2E) No shareholder of the corresponding new bank, other than the
Central Government, shall be entitled to exercise voting rights in
respect of any shares held by him in excess of one per cent of
the total voting rights of all the shareholders of the
corresponding new bank.
PROVIDED that the shareholder holding any preference share
capital in the corresponding new bank shall, in respect of such
capital, have a right to vote only on resolutions placed before
such corresponding new bank, which directly affects the
rights attached to his preference shares.
PROVIDED FURTHER that no preference shareholder shall be
entitled to exercise voting rights in respect of preference shares
held by him in excess of one per cent of the total voting rights of
all the shareholders holding preference share capital only.
(2F) Every corresponding new bank shall keep at its head office a
register, in one or more books, of the shareholder (in this Act
referred to as the register) and shall enter therein the following
particulars:
(i) the names, addresses and occupations, if any, of the
shareholders and a statement of the shares held by each
shareholder, distinguishing each share by its denoting
number;
(ii) the date on which each person is so entered as a
shareholder;
(iii) the date on which any person ceases to be a
shareholder; and
(iv) such other particulars as may be prescribed :
PROVIDED that nothing in this sub-section shall apply to the shares
held with a depository.
(2G) Notwithstanding anything contained in sub-section (2F), it shall
be lawful for every corresponding new bank to keep the
register in computer floppies or diskettes subject to such
safeguards as may be prescribed.
(3) Notwithstanding anything contained in the Indian Evidence
Act, 1872 a copy of, or extract from, the register, certified to be
a true copy under the hand of an officer of the corresponding
new bank authorised in this behalf by it, shall, in all legal
proceedings, be admissible in evidence.
(4) Every corresponding new bank shall be a body corporate with
perpetual succession and a common seal with power, subject to
the provisions of this Act, to acquire, hold and dispose of
property, and to contract, and may sue and be sued in its name.
(5) Every corresponding new bank shall carry on and transact the
business of banking as defined in clause (b) of section 5 of the
Banking Regulation Act, 1949 (10 of 1949) and may engage in
one or more of the other forms of business specified in subsection
(1) of section 6 of that Act.
(6) Every corresponding new bank shall establish a reserve fund
to which shall be transferred the share premiums and the
balance, if any, standing to the credit of the reserve fund of the
existing bank in relation to which it is the corresponding new
bank, and such further sums, if any, as may be transferred in
accordance with the provisions of section 17 of the Banking
Regulation Act, 1949 (10 of 1949).
(7) (i) The corresponding new bank shall, if so required by the Reserve
Bank, act as agent of the Reserve Bank at all places in India
where it has a branch, for(
a) paying, receiving, collecting and remitting money, bullion
and securities on behalf of any Government in India; and
(b) undertaking and transacting any other business which
the Reserve Bank may from time to time entrust to it.
(ii) The terms and conditions on which any such agency
business shall be carried on by the corresponding new
bank on behalf of the Reserve Bank shall be such as
may be agreed upon.
(iii) If no agreement can be reached on any matter referred to
in clause (ii), or if a dispute arises between the
corresponding new bank and the Reserve Bank as to the
interpretation of any agreement between them, the matter
shall be referred to the Central Government and the
decision of the Central Government thereon shall be final.
(iv) The corresponding new bank may transact any business
or perform any functions entrusted to it under clause (i), by
itself or through any agent approved by the Reserve Bank.
3A. TRUST NOT TO BE ENTERED IN THE REGISTER.
Notwithstanding anything contained in sub-section (2F) of section 3, no
notice of any trust, express, implied or constructive, shall be entered in
the register, or be receivable, by the corresponding new bank:
PROVIDED that nothing in this section shall apply to a depository in
respect of shares held by it as a registered owner on behalf of the
beneficial owners.
3B. Register of beneficial owner.
The register of beneficial owner maintained by a depository under
section 11 of the Depositories Act, 1996, shall be deemed to be a
register of shareholders for the purposes of this Act.
Explanation: For the purposes of section 3, section 3A and this section the
expressions "beneficial owner", "depository" and "registered owner" shall
have the meanings respectively assigned to them in clause (a), (e) and (j) of
sub-section (1) of section 2 of the Depositories Act, 1996.
4. Undertaking of existing banks to vest in corresponding new banks
On the commencement of this Act, the undertaking of every existing bank
shall be transferred to, and shall vest in, the corresponding new bank.
5. General affect of vesting.
(1) The undertaking of each existing bank shall be deemed to include
all assets, rights, powers, authorities and privileges and all
property, movable and immovable, cash balances, reserve funds,
investments and all other rights and interests in, or arising out of,
such property as were immediately before the commencement of
this Act in the ownership, possession, power or control of the
existing bank in relation to the undertaking, whether within or
without India, and all books of accounts, registers, records and
all other documents of whatever nature relative thereto and shall
also be deemed to include all borrowings, liabilities and
obligations of whatever kind then subsisting of the existing bank
in relation to the undertaking.
(2) If, according to the laws of any country outside India, the provisions
of this Act by themselves are not effective to transfer or vest any
asset or liability situated in that country which forms part of the
undertaking of an existing bank to, or in, the corresponding new
bank, the affairs, of the existing bank in relation to such asset or
liability shall, on and from the commencement of this Act, stand
entrusted to the Chief Executive Officer for the time being of the
corresponding new bank, and the Chief Executive Officer may
exercise all powers and do all such acts and things as may be
exercised or done by the existing bank for the purpose of effectively
transferring such assets and discharging such liabilities.
(3) The Chief Executive Officer of the corresponding new bank
shall, in exercise of the powers conferred on him by subsection
(2), take all such steps as may be required by the laws
of any such country outside India for the purpose of effecting
such transfer or vesting, and may either himself or through
any person authorised by him in this behalf realise any asset
and discharge any liability of the existing bank.
(4) Unless otherwise expressly provided by this Act, all contracts,
deeds, bonds, agreements, powers of attorney, grants of legal
representation and other instruments of whatever nature subsisting
or having effect immediately before the commencement of this Act
and to which the existing bank is a party or which are in favour of
the existing bank shall be of as full force and effect against or in
favour of the corresponding new bank, and may be enforced or
acted upon as fully and effectually as if in the place of the existing
bank the corresponding new bank had been a party thereto or as if
they had been issued in favour of the corresponding new bank.
(5) If, on the appointed day, any suit, appeal or other proceeding
of whatever nature in relation to any business of the
undertaking which has been transferred under section 4, is
pending by or against the existing bank, the same shall not
abate, be discontinued or be, in any way, prejudicially affected
by reason of the transfer of the undertaking of the existing
bank or of anything contained in this Act but the suit, appeal
or other proceeding may be continued, prosecuted and
enforced by or against the corresponding new bank.
(6) Nothing in this Act shall be construed as applying to the
assets, rights, powers, authorities and privileges and property,
movable and immovable, cash balances and investments in
any country outside India (and other rights and interests in, or
arising out of, such property) and borrowings, liabilities and
obligations of whatever kind subsisting at the commencement
of this Act, of any existing bank operating in that country if,
under the laws in force in that country, it is not permissible for
a banking company, owned or controlled by government, to
carry on the business of banking there.
CHAPTER III
Payment of Compensation
6. Payment of compensation.
(1) Every existing bank shall be given by the Central Government such
compensation in respect of the transfer, under section 4, to the
corresponding new bank of the undertaking of the existing bank as
is specified against each such bank in the Second Schedule.
(2) The amount of compensation referred to in sub-section (1)
shall be given to every existing bank, at its option,-
(a) in cash (to be paid by cheque drawn on the Reserve
Bank) in three equal annual instalments, the amount of
each instalment carrying interest at the rate of four per
cent per annum from the commencement of this Act, or
(b) in saleable or otherwise transferable promissory notes
or stock certificates of the Central Government issued
and repayable at par, and maturing at the end of-
(i) ten years from the commencement of this Act and
carrying interest from such commencement at the
rate of four and a half per cent per annum, or
(ii) thirty years from the commencement of this Act and
carrying interest from such commencement at the
rate of five and a half per cent per annum, or
(c) partly in cash (to be paid by cheque drawn on the
Reserve Bank) and partly in such number of securities
specified in sub-clause (i) or sub-clause (ii) or both, of
clause (b), as may be required by the existing bank, or
(d) partly in such number of securities specified in subclause
(i) of clause (b) and partly in such number of
securities specified in sub-clause (ii) of that clause, as
may be required by the existing bank.
(3) The first of the three equal annual instalments referred to in clause
(a) of sub-section (2) shall be paid, and the securities referred
to in clause (b) of that sub-section shall be issued, within sixty
days from the date of receipt by the Central Government of the
option referred to in that sub-section, or where no such option
has been exercised, from the latest date before which such
option ought to have been exercised.
(4) The option referred to in sub-section (2) shall be exercised by every
existing bank before the expiry of a period of three months from the
appointed day (or within such further time, not exceeding three
months, as the Central Government may, on the application of the
existing bank, allow) and the option so exercised shall be final and
shall not be altered or rescinded after it has been exercised.
(5) Any existing bank which omit or fails to exercise the option referred
to in sub-section (2), within the time specified in sub-section (4),
shall be deemed to have opted for payment in securities specified in
sub-clause (i) of clause (b) of sub-section (2).
(6) Notwithstanding anything contained in this section, any
existing bank may, before the expiry of three months from the
appointed day (or within such further time, not exceeding
three months, as the Central Government may, on the
application of the existing bank, allow) make an application in
writing to the Central Government for an interim payment of an
amount equal to seventy five per cent of the amount of the
paid-up capital of such bank, as on the commencement of this
Act, indicating therein whether the payment is desired in cash
or securities specified in sub-section (2), or in both.
(7) The Central Government shall, within sixty days from the
receipt of the application referred to in sub-section (6), make
the interim payment to the existing bank in accordance with
the option indicated in such application.
(8) The interim payment made to an existing bank under sub-section
(7) shall be set off against the total amount of compensation
payable to such existing bank under this Act and the balance
of the compensation remaining outstanding after such
payment shall be given to the existing bank in accordance with
the option exercised, or deemed to have been exercised, under
sub-section (4) or sub-section (5), as the case may be:
PROVIDED that where any part of the interim payment is obtained by an
existing bank in cash, the payment so obtained shall be set off, in the
first instance, against the first instalment of the cash payment referred
to in sub-section (2), and in case the payment so obtained exceeds the
amount of the first instalment, the excess amount shall be adjusted
against the second instalment and the balance of such excess amount,
if any, against the third instalment of the cash payment.
(9) Any payment purported to have been made to an existing bank under subsection
(3) of section 15 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1969 (22 of 1969), shall be deducted by the
Central Government from the amount of the interim payment made to such
existing bank under sub-section (7) or where no such interim payment has
been made, from the total amount of the compensation due to such
existing bank, and the amount so deducted shall be paid by the Central
Government to the corresponding new bank.
CHAPTER IV
Management of Corresponding New Banks
7. Head office and management.
(1) The head office of each corresponding new bank shall be at such
place as the Central Government may, by notification in the
Official Gazette, specify in this behalf, and, until any such place is
so specified, shall be at such place at which the head office of the
existing bank, in relation to which it is the corresponding new
bank, is on the commencement of this Act, located.
(2) The general superintendence, direction and management of
the affairs and business of a corresponding new bank shall
vest in a Board of Directors which shall be entitled to exercise
all such powers and do all such acts and things as the
corresponding new bank is authorised to exercise and do.
(3)(a) As soon as may be after the appointed day, the Central Government
shall, in consultation with the Reserve Bank, constitute the first
Board of Directors of a corresponding new bank, consisting of not
more than seven persons, to be appointed by the Central
Government, and every Director so appointed shall hold office until
the Board of Directors of such corresponding new bank is
constituted in accordance with the scheme made under section 9:
PROVIDED that the Central Government may, if it is of opinion
that it is necessary in the interests of the corresponding new
bank so to do, remove a person from the membership of the first
Board of Director and appoint any other person in this place.
(b) Every member of the first Board of Directors (not being an officer of
the Central Government or of the Reserve Bank) shall receive such
remuneration as is equal to the remuneration which a member of the
Board of Directors of the existing bank was entitled to receive
immediately before the commencement of this Act.
(4) Until the first Board of Directors is appointed by the Central
Government under sub-section (3), the general
superintendence, direction and management of the affairs and
business of a corresponding new bank shall vest in a
Custodian, who shall be the Chief Executive Officer of that
bank and may exercise all powers and do all acts and things
as may be exercised or done by that bank.
(5) The Chairman of an existing bank holding office as such
immediately before the commencement of this Act, shall be
the Custodian of the corresponding new bank and shall
receive the same emoluments as he was receiving immediately
before such commencement:
PROVIDED that the Central Government may, if the Chairman of an
existing bank declines to become, or to continue to function as, a
Custodian of the corresponding new bank, or, if it is of opinion that it
is necessary in the interests of the corresponding new bank so to do,
appoint any other person as the Custodian of a corresponding new
bank and the Custodian so appointed shall receive such emoluments
as the Central Government may specify in this behalf.
(6) The Custodian shall hold office during the pleasure of the
Central Government.
8. Corresponding new banks to be guided by the directions of the
Central Government.
Every corresponding new bank shall, in the discharge of its
functions, be guided by such directions in regard to matters of policy
involving public interest as the Central Government may, after
consultation with the Governor of the Reserve Bank, give.
9. Power to Central Government to make scheme.
(1) The Central Government may, after consultation with the Reserve
Bank, make a scheme for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing
power, the said scheme may provide for all or any of the following
matters, namely,-
(a) the capital structure of the corresponding new bank;
(b) the constitution of the Board of Directors, by whatever name
called, of the corresponding new bank and all such matters in
connection therewith or incidental thereto as the Central
Government may consider to be necessary or expedient;
(c) the reconstitution of any corresponding new bank into two or more
corporations, the amalgamation of any corresponding new bank
with any other corresponding new bank or with another banking
institution, the transfer of the whole or any part of the undertaking of
a 2[corresponding new bank to any other corresponding new bank
(ca) the manner in which the excess number of directors shall retire
under second proviso to clause (i) of sub-section(3);
(d) such incidental, consequential and supplemental matters as
may be necessary to carry out the provisions of this Act.
(3) Every Board of Directors of a corresponding new bank constituted
under any scheme made under sub-section (1), shall include-
(a) not more than four whole time Directors to be appointed
by the Central Government after consultation with the
Reserve Bank;
(b) one Director who is an official of the Central Government
to be nominated by the Central Government:
PROVIDED that no such Director shall be a Director of any
other corresponding new bank.
Explanation: For the purposes of this clause, the expression
"corresponding new bank" shall include a corresponding new
bank within the meaning of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1980 (40 of 1980);
(c) one director, possessing necessary expertise and experience
in matters relating to regulation or supervision of
commercial banks, to be nominated by the Central
Government on the recommendation of the Reserve Bank;
Explanation : For the purposes of this clause, "an officer of the
Reserve Bank" includes an officer of the Reserve Bank who is
deputed by that bank under Section 54AA of the Reserve Bank of
India Act, 1934 (2 of 1934) to any institution referred to therein;
(d) Omitted by amendment dated 25.09.06, effective 16.10.06.
(e) one Director, from among such of the employees of the
corresponding new bank who are workmen under clause (s)
of section 2 of the Industrial Disputes Act, 1947 (14 of 1947)
to be nominated by the Central Government in such manner
as may be specified in a scheme made under this section;
(f) one Director, from among the employees of the
corresponding new bank who are not workmen under
clause(s) of section 2 of the Industrial Disputes Act,
1947, (14 of 1947) to be nominated by the Central
Government after consultation with the Reserve Bank;
(g) one Director who has been a Chartered Accountant for not
less than fifteen years to be nominated by the Central
Government after consultation with the Reserve Bank;
(h) subject to the provisions of clause (i), not more than six
Directors to be nominated by the Central Government;
(i) where the capital issued under clause (c) of sub-section
(2B) of section (3) is-
(I) not more than sixteen per cent of the total paid-up
capital, one director;
(II) more than sixteen per cent but not more than thirty
two per cent of the total paid-up capital, two directors,
(III) more than thirty two per cent of the total paid-up
capital, three directors,
to be elected by the shareholders, other than the Central
Government, from amongst themselves:
PROVIDED that on the assumption of charge after election of
any such director under this clause, equal number of directors
nominated under clause (h) shall retire in such manner as may
be specified in the scheme.
PROVIDED FURTHER that in case the number of directors elected,
on or before the commencement of the Banking Companies
(Acquisition and Transfer of Undertakings) and Financial Institutions
Laws (Amendment) Act, 2006 in a corresponding new Bank exceed
the number of directors specified in sub-clause (I) or sub – clause
(II) or sub – clause (III), as the case may be, such excess number of
directors elected before such commencement shall retire in such
manner as may be specified in the scheme and such directors shall
not be entitled to claim any compensation for the premature
retirement of their term of office.
(3A) The Directors to be nominated under clause (h) or to be elected
under clause (i) of sub-section (3) shall-
(A) have special knowledge or practical experience in respect
of one or more of the following. matters namely,-
(i) agricultural and rural economy,
(ii) banking,
(iii)co-operation,
(iv) economics,
(v) finance,
(vi) law,
(vii) small scale industry,
(viii)any other matter the special knowledge of, and
practical experience in, which would, in the opinion
of the Reserve Bank, be useful to the
corresponding new bank;
(B) represent the interests of depositors; or
(C) represent the interest of farmers, workers and artisans.
(3AA) Without prejudice to the provisions of sub section (3A) and
notwithstanding anything to the contrary contained in this Act
or in any other law for the time being in force, no person shall
be eligible to be elected as director under clause (i) of sub
section (3) unless he is a person having fit and proper status
based upon track record, integrity and such other criteria as
the Reserve Bank may notify from time to time in this regard.
(3AB) The Reserve Bank may also specify in the notification issued
under sub section (3AA), the authority to determine the fit and
proper status, the manner of such determination, the procedure
to be followed for such determination and such other matters as
may be considered necessary or incidental thereto.
(3B) Where the Reserve Bank is of the opinion that any Director of a
corresponding new bank elected under clause (i) of sub-section
(3) does not fulfill the requirements of sub-sections (3A) and
(3AA), it may, after giving to such Director and the bank a
reasonable opportunity of being heard, by order, remove such
Director and on such removal, the Board of Directors shall co-opt
any other person fulfilling the requirements of sub-sections (3A)
and (3AA) as a Director in place of the person so removed till a
Director is duly elected by the shareholders of the corresponding
new bank in the next annual general meeting and the person so
co-opted shall be deemed to have been duly elected by the
shareholders of the corresponding new bank as a Director.
(4) The Central Government may, after consultation with the
Reserve Bank, make a scheme to amend or vary any scheme
made under sub-section (1).
(5) On and from the date of coming into operation of a scheme
made under this section with respect to any of the matters
referred to in clause (c) of sub-section (2) or any matters
incidental, consequential and supplemental thereto,-
(a) the scheme shall be binding on the corresponding new
bank or corporations or banking institutions, and also
on the members, if any, the depositors, and other
creditors and employees of each of them and on any
other person having any right or liability in relation to
any of them including the trustees or other persons,
managing or in any other manner connected with, any
provident fund or other fund maintained by any of them;
(b) the properties and assets of the corresponding new bank, or
as the case may be, of the banking institution shall, by virtue
of and to the extent provided in the scheme, stand
transferred to, and vested in, and the liabilities of the
corresponding new bank, or, as the case may be, of the
banking institution shall, by virtue of, and to the extent
provided in the scheme, stand transferred to, and become
the liabilities of, the corporation or corporations brought
into existence by reconstitution of the banking institution
or the corresponding new bank, as the case may be.
Explanation I: In this section, "banking institution" means a banking
company and includes the State Bank of India or a subsidiary bank.
Explanation II: For the purposes of this section, the expression
"corresponding new bank" shall include a corresponding new bank
within the meaning of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980 (40 of 1980).
(6) Every scheme made by the Central Government under this Act shall
be laid, as soon as may be after it is made, before each House of
Parliament while it is in session for a total period of thirty days
which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the
scheme or both Houses agree that the scheme should not be made,
the scheme shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity
of anything previously done under that scheme.
9A. Power of Reserve Bank to appoint additional director
(1) If the Reserve Bank is of the opinion that in the interest of
banking policy or in the public interest or in the interests of
the corresponding new bank or its depositors, it is necessary
so to do, it may, from time to time, by order in writing,
appoint, with effect from such date as may be specified in the
order, one or more persons to hold office as additional
directors of the corresponding new bank.
. [
(2) Any person appointed as an additional director in
pursuance of this section –
(a) shall hold office during the pleasure of the
Reserve Bank and subject thereto for a period not
exceeding three years or such further periods not
exceeding three years, at a time as the Reserve
Bank may specify;
(b) shall not incur any obligation or liability by reason
only of his being a director or for anything done or
omitted to be done in good faith in the execution of
the duties of his office or in relation thereto, and
(c) shall not be required to hold qualification shares
in the corresponding new bank.
(3) For the purpose of reckoning any proportion of the total
number of directors of the corresponding new bank, any
additional director appointed under this section shall
not be taken into account.
CHAPTER V
Miscellaneous
10. Closure of accounts and disposal of profits.
(1) Every corresponding new bank shall cause its books to be closed
and balanced on the 31st day of December 1[or such other date in
each year as the Central Government may, by notification in the
Official Gazette, specify] and shall appoint, with the previous
approval of the Reserve Bank, Auditors for the audit of its accounts:
PROVIDED that with a view to facilitating the transition from one
period of accounting to another period of accounting under this subsection,
the Central Government may, by order published in the
Official Gazette, make such provision as it considers necessary or
expedient for the closing and balancing of, or for other matters
relating to, the books in respect of the concerned years.
(2) Every Auditor of a corresponding new bank shall be a person
who is qualified to act as an Auditor of a company under
section 226 of the Companies Act, 1956 (1 of 1956) shall
receive such remuneration as the Reserve Bank may fix in
consultation with the Central Government.
(3) Every Auditor shall be supplied with copy of the annual
balance sheet and profit and loss account and a list of all
books kept by the corresponding new bank, and it shall be the
duty of the Auditor to examine the balance sheet and profit
and loss account with the accounts and vouchers relating
thereto, and in the performance of his duties, the Auditor:-
(a) shall have, at all reasonable times, access to the books,
accounts and other documents of the corresponding
new bank,
(b) may, at the expense of the corresponding new bank,
employ accountants or other persons to assist him in
investigating such accounts, and
(c) may, in relation to such accounts, examine the Custodian
or any officer or employee of the corresponding new bank.
(4) Every Auditor of a corresponding new bank shall make a
report the Central Government upon the annual balance sheet
and accounts and in every such report shall state,-
(a) whether, in his opinion, the balance sheet is a full and fair
balance sheet containing all the necessary particulars and
is properly drawn up so as to exhibit a true and fair view of
the affairs of the corresponding new bank, and in case he
had called for any explanation or information, whether it
has been given and whether it is satisfactory;
(b) whether or not the transactions of the corresponding
new bank, which have come to his notice, have been
within the powers of that bank;
(c) whether or not the returns received from the offices and
branches of the corresponding new bank have been
found adequate for the purpose of his audit;
(d) whether the profit and loss account shows a true balance of
profit or loss for the period covered by such account; and
(e) any other matter which he considers should be brought
to the notice of the Central Government.
Explanation I: For the purposes of this Act-
(a) the balance sheet shall not be treated as not disclosing
a true and fair view of the affairs of the corresponding
new bank, and
(b) the profit and loss account shall not be treated as not
showing a true balance of profit or loss for the period
covered by such account,
merely by reason of the fact that the balance sheet or, as the case may
be, the profit and loss account, does not disclose any matters which are
by the provisions of the Banking Regulation Act, 1949 (10 of 1949),
read with the relevant provisions of this Act or any other Act, not
required to be disclosed.
Explanation II: For the purposes of this Act the accounts of the
corresponding new bank shall to be deemed as having not been
properly drawn up on the ground merely that they do not disclose
certain matters if,-
(i) those matters are such as the corresponding new bank is, by
virtue of any provision contained in the Banking Regulation
Act, 1949 (10 of 1949), read with the relevant provision of this
Act, or any other Act, not required to disclose, and
(ii) the provisions referred to in clause (i) are specified in the
balance sheet and profit and loss account of the
corresponding new bank or in the Auditor's report.
(5) The report of the Auditor shall be verified, signed and
transmitted to the Central Government.
(6) The Auditor shall also forward a copy of the audit report to the
corresponding new bank and to the Reserve Bank.
(7) After making provision for bad and doubtful debts, depreciation
in assets, contributions to staff and superannuation funds and all
other matters for which provision is necessary under any law, or
which are usually provided for by banking companies, a
corresponding new bank [may out of its net profits deal are a
dividend and retain the surplus if any.
(7A) Every corresponding new bank shall furnish to the Central
Government 4[and to the Reserve Bank the annual balance
sheet, the profit and loss account, and the Auditor's report and
a report by its Board of Directors on the working and activities
of the bank during the period covered by the accounts.
(8) The Central Government shall cause every Auditor's report
and report on the working and activities of each
corresponding new bank to be laid 5[as soon as may be after
they are received before each House of Parliament.
(9) Without prejudice to the foregoing provisions, the Central
Government may, at any time, appoint such number of Auditors as it
thinks fit to examine and report on the accounts of a corresponding
new bank and the Auditors so appointed shall have all the rights,
privileges and authority in relation to the audit of the
accounts of the corresponding new bank which an Auditor
appointed by the corresponding new bank has under this section.
10A. Annual general meeting.
(1) A general meeting (in this Act referred to as an annual general
meeting) of every corresponding new bank which has issued capital
under clause (c) of sub-section (2B) of section 3 shall be held at the
place of the head office of the bank in each year at such time as
shall from time to time be specified by the Board of Directors:
PROVIDED that such annual general meeting shall be held before the
expiry of six weeks from the date on which the balance sheet,
together with the profit and loss account and Auditor's report is
under sub-section (7A) of section 10, forwarded to the Central
Government or to the Reserve Bank whichever date is earlier.
(2) The shareholders present at an annual general meeting shall be
entitled to discuss, approve and adopt the balance sheet and the
profit and loss account of the corresponding new bank made up
to the previous 31st day of March, the report of the Board of
Directors on the working and activities of the corresponding new
bank for the period covered by the accounts and the Auditor's
report on the balance sheet and accounts.
(3) Nothing contained in this section shall apply during the period
for which the Board of Directors of a corresponding new bank
had been superseded under sub section (1) of section 18A:
PROVIDED that the Administrator may, if he considers it appropriate
in the interest of the corresponding new bank whose Board of
Directors had been superseded, call annual general meeting in
accordance with the provisions of this section.
10B. Transfer of unpaid or unclaimed dividend to Unpaid Dividend
Account
(1) Where, after the commencement of the Banking Companies (Acquisition
and Transfer of Undertakings) and Financial Institutions Laws
(Amendment) Act, 2006, a dividend has been declared by a
corresponding new bank but has not been paid or claimed within
thirty days from the date of declaration to, or by, any shareholder
entitled to the payment of the dividend, the corresponding new bank
shall, within seven days from the date of the expiry of such period of
thirty days, transfer the total amount of dividend which remains
unpaid or unclaimed within the said period of thirty days, to a
special account to be called “Unpaid Dividend Account of ……. (the
name of the corresponding new bank).”
Explanation : In this sub-section, the expression “dividend
which remains unpaid” means any dividend the warrant in
respect thereof has not been encashed or which has otherwise
not been paid or claimed.
(2) Where the whole or any part of any dividend, declared by a
corresponding new bank before the commencement of the Banking
Companies (Acquisition and Transfer of Undertakings) and Financial
Institutions Laws (Amendment) Act, 2006, remains unpaid at such
commencement, the corresponding new bank shall, within a period
of six months from such commencement, transfer such unpaid
amount to the account referred to in sub section (1).
(3) Any money transferred to the Unpaid Dividend Account of a
corresponding new bank in pursuance of this section which
remains unpaid or unclaimed for a period of seven years from
the date of such transfer, shall be transferred by the
corresponding new bank to the Investor Education and
Protection Fund established under sub – section (1) of section
205C of the Companies Act, 1956 (1 of 1956).
(4) The money transferred under sub section (3) to the Investor
Education and Protection Fund shall be utilized for the
purposes and in the manner specified in section 205C of the
Companies Act, 1956 (1 of 1956).
11. Corresponding new bank deemed to be an Indian company.
For the purposes of the Income Tax Act, 1961 (43 of 1961), every
corresponding new bank shall be deemed to be an Indian company
and a company in which the public are substantially interested.
12. Removal of Chairman from office
(1) Every person holding office, immediately before the
commencement of this Act, as Chairman of an existing bank
shall, if he becomes Custodian of the corresponding new
bank, be deemed, on such commencement, to have vacated
office as such Chairman.
(2) Save as otherwise provided in sub-section (1), every officer or other
employee of an existing bank shall become, on the commencement
of this Act, an officer or other employee, as the case may be, of the
corresponding new bank and shall hold his office or service in that
bank on the same terms and conditions and with the same rights to
pension, gratuity and other matters as would have been admissible
to him if the undertaking of the existing bank had not been
transferred to and vested in the corresponding new bank and
continue to do so unless and until his employment in the
corresponding new bank is terminated or until his
remuneration, terms or conditions are duly altered by the
corresponding new bank.
(3) For the persons who immediately before the commencement
of this Act were the trustees for any pension, provident,
gratuity or other like fund constituted for the officers or other
employees of an existing bank, there shall be substituted as
trustees such persons as the Central Government may, by
general or special order, specify.
(4) Notwithstanding anything contained in the Industrial Disputes Act,
1947 (14 of 1947), or in any other law for the time being in force, the
transfer of the services of any officer or other employee from an
existing bank to a corresponding new bank shall not entitle such
officer or other employee to any compensation under this Act or any
other law for the time being in force and no such claim shall be
entertained by any court, Tribunal or other authority.
12A. Bonus.
(1) No officer or other employee [other than an employee within
the meaning of clause (13) of section 2 of the Payment of
Bonus Act, 1965 (21 of 1965)] of a corresponding new bank
shall be entitled to be paid any bonus.
(2) No employee of a corresponding new bank, being an employee
within the meaning of clause (13) of section 2 of the Payment
of Bonus Act, 1965 (21 of 1965), shall be entitled to be paid any
bonus except in accordance with the provisions of that Act.
(3) The provisions of this section shall have effect
notwithstanding any judgement, decree or order of any court,
Tribunal or other authority and notwithstanding anything
contained in any other provision of this Act or in the Industrial
Disputes Act, 1947 (14 of 1947), or any other law for the time
being in force or any practice, usage or custom or any
contract, agreement, settlement, award or other instrument.
13. Obligations as to fidelity and secrecy.
(1) Every corresponding new bank shall observe, except as otherwise
required by law, the practices and usages customary among
bankers, and, in particular, it shall not divulge any information
relating to or to the affairs of its constituents except in
circumstances in which it is, in accordance with law or practices
and usages customary among bankers, necessary or appropriate
for the corresponding new bank to divulge such information.
(2) Every Director, member of a local Board or a committee, or Auditor,
Adviser, officer or other employee of a corresponding new bank
shall, before entering upon his duties, make a declaration of fidelity
and secrecy in the form set out in the Third Schedule.
(3) Every Custodian of a corresponding new bank shall, as soon
as possible make a declaration of fidelity and secrecy in the
form set out in the Third Schedule.
14. Custodian to be public servant.
Every Custodian of a corresponding new bank shall be deemed to be
a public servant for the purposes of Chapter IX of the Indian Penal
Code (45 of 1860).
15. Certain defects not to invalidate acts or proceedings.
(1) All acts done by the Custodian, acting in good faith, shall,
notwithstanding any defect in his appointment or in the
procedure, be valid.
(2) No act or proceeding of any Board of Directors or a local Board or
committee of a corresponding new bank shall be invalid merely on
the ground of the existence of any vacancy in, or defect in the
constitution of, such Board or committee, as the case may be.
(3) All acts done by a person acting in good faith as a Director or
member of a local Board or committee of a corresponding new
bank shall be valid, notwithstanding that it may afterwards be
discovered that his appointment was invalid by reason of any
defect or disqualification or had terminated by virtue of any
provision contained in any law for the time being in force:
PROVIDED that nothing in this section shall be deemed to give validity
to any act by a Director, or member of a local Board or committee of a
corresponding new bank after his appointment has been shown to the
corresponding new bank to be invalid or to have terminated.
16. Indemnity.
(1) Every Custodian of a corresponding new bank and every officer of
the Central Government or of the Reserve Bank and every officer or
other employee of a corresponding new bank, shall be indemnified
by such bank against all losses and expenses incurred
by him in or in relation to the discharge of his duties except
such as have been caused by his own willful act or default.
(2) A Director or member of a local Board or committee of a corresponding
new bank shall not be responsible for any loss or expense caused to
such bank by the insufficiency or deficiency of the value of, or title
to, any property or security acquired or taken on behalf of the
corresponding new bank, or by the insolvency or wrongful act of
any customer or debtor, or by anything done in or in relation to the
execution of the duties of his office, unless such loss, expense,
insufficiency or deficiency was due to any willful act or default on
the part of such Director or member.
16A. Arrangement with corresponding new bank on appointment of
Directors to prevail.
(1) Where any arrangement entered into by a corresponding new bank
with a company provides for the appointment by the corresponding
new bank of one or more Directors of such company, such provision
and any appointment of Directors made in pursuance thereof shall
be valid and effective notwithstanding anything to the contrary
contained in the Companies Act, 1956 (1 of 1956) or in any other law
for the time being in force or in the memorandum, articles of
association or any other instrument relating to the company, and
any provision regarding share qualification, age limit, number of
Directorship, removal from office of Director and such like
conditions contained in any such law or instrument aforesaid, shall
not apply to any Director appointed by the corresponding new bank
in pursuance of the arrangement as aforesaid.
(2) Any director appointed as aforesaid shall-
(a) hold office during the pleasure of the corresponding new
bank and may be removed or substituted by any person by
order in writing of the corresponding new bank;
(b) and incur any obligation or liability by reason only of his
being a Director or for anything done or omitted to be
done in good faith in the discharge of his duties as a
Director or anything in relation thereto;
(c) not be liable to retirement by rotation and shall not be
taken into account for computing the number of
Directors liable to such retirement.]
17. References to existing banks on and from the commencement of this
Act.
Any reference to any existing bank in any law, other than this Act, or
in any contract or other instrument shall, in so far as it relates to the
undertaking which has been transferred by section 4, be construed
as a reference to the corresponding new bank.
18. Dissolution.
No provision of law relating to winding up of corporations shall apply
to a corresponding new bank and no corresponding new bank shall
be placed in liquidation save by order of the Central Government and
in such manner as it may direct.
18A. Supersession of Board in certain cases
(1) Where the Central Government, on the recommendation of the
Reserve Bank is satisfied that in the public interest or for
preventing the affairs of any corresponding new bank being
conducted in a manner detrimental to the interest of the
depositors of the corresponding new bank or for securing the
proper management of any corresponding new bank, it is
necessary so to do, the Central Government may, for reasons
to be recorded in writing, by order, supersede the Board of
Directors of such corresponding new bank for a period not
exceeding six months as may be specified in the order.
PROVIDED that the period of supersession of the Board of
Directors may be extended from time to time, so however, that
the total period shall not exceed twelve months.
(2) The Central Government may, on supersession of the Board of
Directors of the corresponding new bank under sub section (1),
appoint, in consultation with the Reserve Bank, for such period
as it may determine, an Administrator (not being an officer of the
Central Government or a State Government) who has experience
in law, finance, banking, economics or accountancy.
(3) The Central Government may issue such directions to the
Administrator as it may deem appropriate and the
Administrator shall be bound to follow such directions.
(4) Upon making the order of supersession of the Board of
Directors of the corresponding new bank, notwithstanding
anything contained in this Act –
(a) the chairman, managing directors and other directors,
shall, as from the date of supersession vacate their
offices as such;
(b) all the powers, functions and duties which may, by or under
the provisions of this Act or any other law for the time being
in force, be exercised and discharged by or on behalf of the
Board of Directors of such corresponding new bank, or by a
resolution passed in general meeting of such corresponding
new bank, shall until the Board of Directors of such
corresponding new bank is reconstituted, be exercised and
discharged by the Administrator appointed by the Central
Government under sub section (2):
PROVIDED that the power exercised by the
Administrator shall be valid notwithstanding that such
power is exercisable by a resolution passed in the
general meeting of the corresponding new bank.
(5) The Central Government may constitute, in consultation with the
Reserve Bank, a committee of three or more persons who have
experience in law, finance, banking, economics or accountancy
to assist the Administrator in the discharge of his duties.
(6) The committee shall meet at such times and places and
observe such rules of procedure as may be specified by the
Central Government.
(7) The salary and allowances payable to the Administrator and
the members of the committee constituted under sub section
(5) by the Central Government shall be such as may be
specified by the Central Government and be payable by the
concerned corresponding new bank.
(8) On and before the expiration of two months before expiry of
the period of supersession of the Board of Directors as
specified in the order issued under sub section (1), the
Administrator of the corresponding new bank, shall call the
general meeting of the corresponding new bank to elect new
directors and reconstitute its Board of Directors.
(9) Notwithstanding anything contained in any other law or in any
contract, the memorandum or articles of association, no
person shall be entitled to claim any compensation for the loss
or termination of his office.
(10) The Administrator appointed under sub section (2) shall
vacate office immediately after the Board of Directors of the
corresponding new bank has been reconstituted.
19. Power to make regulations.
(1) The Board of Directors of a corresponding new bank may,
after consultation with the Reserve Bank and with the previous
sanction of the Central Government by notification in the
Official Gazette make regulations, not inconsistent with the
provisions of this Act or any scheme made thereunder, to
provide for all matters for which provision is expedient for the
purpose of giving effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the
foregoing power, the regulations may provide for all or any of
the following matters, namely,-
(a) the powers, functions and duties of local boards and
restrictions, conditions or limitations, if any, subject to
which they may be exercised or performed, the
formation and constitution of local committees and
committees of local board (including the number of
members of any such committee), the powers, functions
and duties of such committees, the holding of meetings
of local committees and committees of local Board and
the conduct of business thereat;
(b) the manner in which the business of the local boards shall
be transacted and the procedure in connection therewith;
(ba) the nature of shares of the corresponding new bank, the
manner in which and the conditions subject to which
shares may be held and transferred and generally all
matters relating to the rights and duties of shareholders;
(bb) the maintenance of register, and the particulars to be
entered in the register in addition to those specified in
sub-section (2F) of section 3, the safeguards to be
observed in the maintenance of register or computer
floppies or diskettes, inspection and closure of the
register and all other matters connected therewith;
(bc) the manner in which general meetings shall be convened,
the procedure to be followed thereat and the manner in
which voting rights may be exercised;
(bd) the holding of meetings of shareholders and the business
to be transacted thereat;
(be) the manner in which notices may be served on behalf of
the corresponding new bank upon shareholders or other
persons;
(bf) the manner in which the Directors nominated under clause
(h) of sub-section (3) of section 9 shall retire.
(c) the delegation of powers and functions of the Board of
Directors of a corresponding new bank to the General
Manager, Director, officer or other employee of that bank;
(d) the conditions or limitations subject to which the
corresponding new bank may appoint Advisers, officers
or other employees and fix their remuneration and other
terms and conditions of service;
(e) the duties and conduct of Advisers, officers or other
employees of the corresponding new bank;
(f) the establishment and maintenance of superannuation,
pension, provident or other funds for the benefits of officers
or other employees of the corresponding new bank or of the
dependants of such officers or other employees and the
granting of superannuation allowances, annuities and
pensions payable out of such funds;
(g) the conduct and defence of legal proceedings by or
against the corresponding new bank and the manner of
signing pleadings;
(h) the provision of a seal for the corresponding new bank
and the manner and effect of its use;
(i) the form and manner in which contracts binding on the
corresponding new bank may be executed;
(j) the conditions and the requirements subject to which
loans or advances may be made or bills may be
discounted or purchased by the corresponding new bank;
(k) the persons or authorities who shall administer any
pension, provident or other fund constituted for the
benefit of officers or other employees of the
corresponding new bank or their dependants;
(l) the preparation and submission of statements of
programmes of activities and financial statements of the
corresponding new bank and the period for which and
the time within such which statements and estimates
are to be prepared and submitted; and
(m) generally for the efficient conduct of the affairs of the
corresponding new bank.
(3) Until any regulation is made under sub-section (1), the articles
of association of the existing bank and every regulation, rule,
bye-law or order made by the existing bank shall, if in force at
commencement of this Act, be deemed to be the regulations
made under sub-section (1) and shall have effect accordingly
and any reference therein to any authority of the existing bank
shall be deemed to be a reference to the corresponding
authority of the corresponding new bank and until any such
corresponding authority is constituted under this Act, shall be
deemed to refer to the Custodian.
(4) Every regulation shall, as soon as may be after it is made under this
Act by the Board of Directors of a corresponding new bank, be
forwarded to the Central Government and that government shall
cause a copy of the same to be laid before each House of
Parliament, while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the
regulation or both Houses agree that the regulation should. not be
made, the regulation shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however,
that any such modification or annulment shall be without prejudice
to the validity of anything previously done under that regulation.
20. Amendment of certain enactments.
(1) In the Banking Regulation Act, 1949 (10 of 1949),-
(a) in section 34A, in sub-section (3), for the words "and
any subsidiary bank", the words, figures and brackets
"a corresponding new bank constituted under section 3
of the Banking Companies, (Acquisition and Transfer of
Undertakings) Act, 1970, and any subsidiary bank" shall
be substituted;
(b) in section 36AD, in sub-section (3), for the words "and
any subsidiary bank", the words, figures and brackets
"a corresponding new bank constituted under section 3
of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, and any subsidiary bank" shall
be substituted;
(c) in section 51, for the words "or any other banking institution
notified by the Central Government in this behalf", the words,
figures and brackets "or any corresponding new bank
constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 or any
other banking institution notified by the Central Government
in this behalf shall be substituted;
(d) in the Fifth Schedule, in Part I of paragraph 1, in clause
(e), the Explanation shall be deemed never to have been
inserted.
(2) In the Industrial Disputes Act, 1947 (14 of 1947), in section 2, in
clause (bb), for the words "and any subsidiary bank", the
words, figures and brackets "a corresponding new bank
constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970, and any
subsidiary bank" shall be substituted.
(3) In the Banking Companies (Legal Practitioners' Clients' Accounts)
Act,1949 (46 of 1949), in section 2, in clause (a), for the words, "and
any subsidiary bank", the words, figures and brackets "a
corresponding new bank constituted under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970,
and any subsidiary bank" shall be substituted.
(4) In the Deposit Insurance Corporation Act, 1961 (47 of 1961),-
(a) in section 2,-
(i) after clause (e), the following clause shall be
inserted, namely:-(ee) "corresponding new bank"
means a corresponding new bank constituted under
section 3 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970;
(ii) in clause (g)-
(a) for the words "or a banking company", the
words "a corresponding new bank or a
banking company", and
(b) for the words "with a banking company", the
words "with a corresponding new bank or with
a banking company", shall be substituted;
(iii) in clause (i), after the words "banking company", the
words "or a corresponding new bank" shall be
inserted;
(b) Section 13 shall be renumbered as sub-section (1)
thereof and after sub-section (1) as so renumbered, the
following sub-section shall be inserted, namely,-
"(2) The provisions of clauses (a), (b), (c), (d) and (h) of
sub-section (1) shall apply to a corresponding
new bank as they apply to a banking company".
(5) In the State Agricultural Credit Corporations Act, 1968 (60 of 1968)-
(a) in section 2, after clause (i), the following clause shall be
inserted, namely,-
(ii) "corresponding new bank" means a
corresponding new bank constituted under
section 3 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970;
(b) after the words "subsidiary banks" or "subsidiary bank",
as the case may be, occurring in clause (d) of subsection
(3) of section 5, in clause (b) of section 9 and in
the proviso to section 18, the words "corresponding
new banks" or "corresponding new bank", as the case
may be, shall be inserted.
21. Repeal and saving.
(1) The Banking Companies (Acquisition and Transfer of
Undertakings) Ordinance, 1970 (3 of 1970), is hereby repealed.
(2) Notwithstanding such repeal and notwithstanding any
judgement, decree or order of any court or Tribunal,-
(a) any action taken, or purported to have been taken, or
anything done, or purported to have been done, between the
19th day of July, 1969, and the 10th day of February, 1970,
by any corresponding new bank purported to have been
constituted under the Banking Companies (Acquisition
and Transfer of Undertakings) Ordinance, 1969 (8 of 1969),
or the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1969 (22 of 1969), or by any person
purporting to act on behalf of such bank and any right,
obligation or liability acquired or incurred, between the
said dates, by or on behalf of such corresponding new
bank shall be deemed to have been taken, done, acquired
or incurred under the provisions of this Act by or on behalf
of the corresponding new bank constituted thereunder;
(b) any action taken, or purported to have been taken, or
anything done, or purported to have been done,
between the 10th day of February, 1970, and the
appointed day, by an existing bank or by any person
acting on behalf of such bank, and any right, obligation
or liability acquired or incurred, between the said dates,
by or on behalf of such existing bank shall be deemed to
have been taken, done, acquired or incurred under the
provisions of this Act by or on behalf of the
corresponding new bank constituted thereunder;
(c) anything done or any action taken, including any order made,
notification issued or directions given under the Banking
Companies (Acquisition and Transfer of Undertakings)
Ordinance, 1970 (3 of 1970), shall be deemed to have been
done, taken, made, issued or given as the case may be,
under the corresponding provisions of this Act.
(3) Any suit, appeal or other proceedings of whatever nature instituted
on or after the 19th day of July, 1969, by or against a corresponding
new bank purported to have been constituted by the Banking
Companies (Acquisition and Transfer of Undertakings) Ordinance,
1969 (8 of 1969), or the Banking Companies (Acquisition and
Transfer of Undertakings Act, 1969 (22 of 1969), shall not abate, be
discontinued, or be, in any way, prejudicially affected by reason of
the expiry of the said Ordinance or the invalidation of the said Act,
as the case may be, but such suit, appeal or other proceeding may
be continued, prosecuted and enforced by or against the
corresponding new bank as if such suit, appeal or other
proceedings had been instituted by or against the corresponding
new bank constituted under this Act.
THE FIRST SCHEDULE
(Sections 2, 3 and 4)
Existing bank Corresponding new bank
1 2
The Central Bank of India Limited Central Bank of India
The Bank of India Limited Bank of India
The Punjab National Bank Limited Punjab National Bank
The Bank of Baroda Limited Bank of Baroda.
The United Commercial Bank Limited UCO Bank
Canara Bank Limited Canara Bank
United Bank of India Limited United Bank of India
Dena Bank Limited Dena Bank
Syndicate Bank Limited Syndicate Bank.
The Union Bank of India Limited Union Bank of India.
Allahabad Bank Limited Allahabad Bank.
The Indian Bank Limited Indian Bank
.The Bank of Maharashtra Limited Bank of Maharashtra
The Indian Overseas Bank Limited Indian Overseas Bank
THE SECOND SCHEDULE
(Section 6)
Name of existing bank
Amount of compensation
(in lakhs of rupees)
The Central Bank of India Limited 1,750
The Bank of India Limited 1,470
The Punjab National Bank Limited 1,020
The Bank of Baroda Limited 840
The United Commercial Bank Limited 830
Canara Bank Limited 360
United Bank of India Limited 420
Dena Bank Limited 360
Syndicate Bank Limited 360
The Union Bank of India Limited 310
Allahabad Bank Limited 310
The Indian Bank Limited 230
The Bank of Maharashtra Limited 230
The Indian Overseas Bank Limited 250
THE THIRD SCHEDULE
DECLARATION OF FIDELITY AND SECRECY
[Sub-sections (2) and (3) of section 13]
I,........., do hereby declare that I will faithfully, truly and to the best of my
skill and ability execute and perform the duties required of me as
Custodian, Director, member of Local Board, Member of Local Committee,
Auditor, Adviser, officer or other employee (as the case may be) of
the*........... .................and which properly relate to the office or position in
the said*..................... held by me.
I further declare that I will not communicate or allow to be communicated to
any person not legally entitled thereto information relating to the affairs of
the* .......... or to the affairs of any person having any dealing with
the*......... ; nor will I allow any such person to inspect or have access to any
books or documents belonging to or in the possession of the*............. and
relating to the business of the*............. or the business of any person having
any dealing with the*
__________________________________________________________
* Name of corresponding new bank to be filled in.
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