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| Home > Indian Bare Acts > THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1980 > CHAPTER IV MANAGEMENT OF CORRESPONDING NEW BANKS |
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| THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1980 |
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Title : THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1980
Year : 1980
Act :
CHAPTER IV
MANAGEMENT OF CORRESPONDING NEW BANKS
7.Head office and management.
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 commencement of this Act, 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
Directors and appoint any other person in his 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
Cus-
180
todian 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.
Explanation.--In this sub-section and in sub-section (1) of section 12, the expression "Chairman", in relation to any existing bank, includes the person carrying out the duties of the Chairman or otherwise functioning as the chief executive officer of that bank.
(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
CentralGovernment.
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 of Central Government to make scheme.
9. Power of 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 bank1*,
(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 or banking institution or the transfer of the whole or any part of the undertaking of any other banking institution to a corresponding new bank;
(d) such incidental, consequential and supplemental matters as may be necessary to carry out the provisions of this Act.
3*(3) Every Board of Directors of a corresponding new bank, cons-
tituted under any scheme made under sub-section (1), shall include--
(a) not more than two 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 expres-
sion "corresponding new bank" shall include a corresponding new bank within the meaning of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970)
(c) one director who is an officer of the Reserve Bank to be nominated by the Central Government on the recommendation of the
Reserve Bank.
Explanation.-- For the purpose 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) not more than two directors to be nominated by the
Central Government from amongst the Securities Exchange Board of
India established under section 3 of the Securities and Exchange
Board of India Act, 1992 (15 of 1992), the National Bank for
Agriculture and Rural Development established under secction 3.of the National Bank for Agriculture and Rural Development
Act, 1981 (61 of 1981), public financial institutions as specified in sub-section (1), or noti-fied from time to time under sub-section (2), of section 4A of the Companies Act, 1956.and other institutions established or constituted by or under any Central act or incorporated under the Companies Act, 1956 (1.of 1956), and having not less than fifty-one per centth. of the paid-up share capital held or controlled by the Central
Government:
(e) one director, from among such of the employees of the corresponding new bank who are workmen under clause (s) of sec-
tion 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 corres-
ponding 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 Accountan 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 direcctors to be nominated by Central Government;
(i) where the capital issued under clause (c) of sub-section
(2B) of section 3 is--
(I) not more than twenty per cent. of the total paid-up capital, not more than two directors,
(II) more than twenty per cent. but not more than forty per cent. of the total paid-up capital, not more than four directors,
(III) more than forty per cent. of the total paid-up capital, not more than six directors,
to be elected by the shareholders, other than the Central Gover-
nment, from amongst themselves,
Provided that on the assumption of charge after election of any such directors under this clause, equal number of directors nominated under clause (h) shall retire in such manner as may be specified in the scheme.
(3A) The directors to be nominated under clause (h) or to be elected under clause (i) of sub-section (3A) 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 interests of farmers, workers and artisans.
(3A) where the Reserve Bank is of the opinion that any director of a corresponding new bank clected under clause (i) of sub-section
(3) does not fulfil the requirements of sub-section (3A), 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 requi-
rments of sub-section (3A) 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.
1. Omitted by Act 37 of 1994, s. 14 (w.e.f.3-4-1995).
2. Subs. by Act 66 of 1988, s. 36 (w.e.f. 30-12-1988).
3. Subs. by Act 37 of 1994, s. 14 (w.e.f. 3-4-1995).
4. Subs. by Act 36 of 1992, s. 3 (w.e.f. 1-11-1992).
181.(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 schem made under this section with respect to any of the matters referred to in clause (c) of sub-section (2) or any matters incidental, conse-
quential 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 right or liability in relation to any of them including the trustees or other persons, managing or in any other manner connected with, 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 trans-
ferred to, and vested in, and the liabilities of the corres-
ponding new bank or, as the case may be, of the banking insti-
tution 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 recons-
titution of the banking institution or the corresponding new bank, as the case may be.
Explanation 2*[I]-- In this section, "banking institution"
means a banking company and includes the State Bank of India or a subsidiary bank.
Explanation 2*[II]-- For the purposes of this section, the exp-
ression "corresponding new bank" shall include a corresponding new bank within the meaning of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 (5 of 1970).
3*[(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.
CHAP
MISCELLANEOUS
Last updated on February, 2008
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