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| Home > Indian Bare Acts > THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS), 1970 > CHAPTER II TRANSFER OF THE UNDERTAKING OF EXISTING BANKS AND SHARE CAPITALS OF THE CORRESPONDING NEW BANKS |
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| THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS), 1970 |
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Title : THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS), 1970
Year : 1970
Act :
CHAPTER II
2*[TRANSFER OF THE UNDERTAKING OF EXISTING BANKS AND SHARE CAPITALS OF THE CORRESPONDING NEW BANKS]
3.Establishment of corresponding new banks and business thereof.
3. Establishment of corresponding new banks and business thereof.
(1) On the commencement of 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 the paid-up capital of the existing bank in relation to which it is the corresponding new bank.
2*[(2A) Notwithstanding anything contained in subs-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 capital:
(b) such amounts as the Central Government may, in consultation with the Reserve Bank, contribute to such paid-up capital;
Provided that the paid-up capital of any such bank shall in no case be in excess of 3*[4*[rupees one thousand five hundred crores].
(3) The entire capital of each corresponding new bank shall stand vested in, and allotted to, the Central Government.
(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 5*[one or more of the other forms of business] specified in sub-section (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).
6*[(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.]
4.Undertaking of existing banks to vest in corresponding new banks.
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.
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1 Subs. & ins. by Act 1 of 1984, s. 65 (w.e.f. 15-2-1984).
2 Ins. by Act 81 of 1985, s. 7 (w.e.f. 30-12-1985).
3 Subs. by Act 66 of 1988, s. 30 (w.e.f. 30-12-1988).
4 Subs. by Act 36 of 1992, s. 2 (w.e.f. 30-12-1988).
79.5.General effect of vesting.
5. General effect 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 relating 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 sub-section (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
80
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.
Last updated on February, 2008
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