THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984
THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984
Title : THE INDUSTRIAL RECONSTRUCTION BANK OF INDIA ACT, 1984
Year : 1984
(1) The Reconstruction Bank shall function as the principal credit and reconstruction agency for industrial revival by undertaking modernization, expansion, re-organization, diversification or rationalization of industries, and by co-ordination similar work of other institutions engaged therein, and shall assist and promote industrial development, reconstruction and revival, and undertake rehabilitation of industrial concerns, by providing or procuring assistance and operating schemes for the same, and may, for attaining the said objects, carry on and transact all or any of the following businesses, namely:-
(a) Granting loans and advances (including working capital) to any industrial concern or subscribing to or purchasing or underwriting the issue of stocks, shares, bonds or debentures of any industrial concern or converting the dues in respect of such loans or debentures into the shares of any industrial concern;
(b) Guaranteeing, counter-guaranteeing or providing indemnity, as the case may be, in respect of-
(i) Loans raised by an industrial concern from any scheduled bank or State co-operative bank or any public financial institution or any other prescribed institution or agency in, or outside, India;
(ii) Deferred payments due from an industrial concern;
(iii) The performance obligations of any contract undertaken by an industrial concern, including repayment of any advance obtained by such industrial concern in connection with such contract;
(c) Subscribing to or purchasing or underwriting the issue of stocks, shares, bonds or debentures of any institution which may be notified by the Central Government in this behalf;
(d) Providing credit to any State level agency or other prescribed institution or agency for grant of loans and advances to industrial concerns;
(e) Providing or obtaining credit from other public financial institutions, scheduled banks and State co-operative banks, for grant of loans and advances to or to furnish guarantees on behalf of the industrial concern;
(f) Providing infrastructural facilities and raw materials;
(g) Providing machinery and other equipment on lease or hire purchase basis;
(h) Providing consultancy and merchant banking services in and outside India relating to reconstruction and development of any industrial concern or industry in general;
(i) Accepting or discounting of bills of exchange and promissory notes, made, drawn, accepted or endorsed by any industrial concern or by any person selling capital goods manufactured by one industrial concern to another industrial concern;
(j) Promoting, owning, taking over, managing industrial concerns and acting as authorized person, where so appointed by the Central Government, to manage an industrial concern, including ancillaries;
(k) Transferring or acquiring for consideration any instrument relating to loans and advances;
(l) Providing technical, legal, administrative and marketing assistance, promoting, assisting and financing mergers, amalgamation or reconstruction of an industrial or business concern;
(m) Providing managerial assistance to industrial concerns including nationalized undertakings, by deputing officers from its own cadre or a separate management pool constituted for the purpose;
(n) Undertaking research and surveys for evaluating or dealing with marketing or investments, carrying on techno economic studies in connection with reconstruction and development of industry and establishment of institutes for such purposes including training of personnel;
(o) Granting, opening, issuing, confirming or endorsing letters of credit and negotiating or collecting bills and other documents drawn there under;
(p) Forming, or controlling, of subsidiaries for carrying out any of its functions or to carry on such other activities conducive to its business;
(q) Acting as an agent of-
(i) Central Government or State Government;
(ii) Reserve Bank, State Bank, scheduled bank, State co-operative bank, public financial institutions, State Financial Corporations;
(iii) Such other Government or person as the Central Government may authorize; and to appoint one or more of those institutions, or agencies, or any other prescribed person, as its agent;
(r) Performing functions entrusted to or required of it by Central Government under this Act or any other law;
(s) Doing any kind of business or assignment in or outside the country which the Central Government may authorize;
(t) Collecting information from all concerned agencies relating to industrial sickness and industrial development;
(u) Preparing guidelines to assist the Central Government in formulating policy framework to reconstruct, revive or rehabilitate industrial concerns or any industry;
(v) Granting loans for housing and other purposes to the officers and other employees (including persons employed on contract) of the Reconstruction Bank;
(w) Generally doing such other acts and things as may be incidental to or consequential upon the exercise of its powers or of its duties under this Act or any other law, including sale or transfer of any of its assets.
(2) The Reconstruction Bank may receive in consideration of any of the services mentioned in sub-section (1), such commission, brokerage, interest, rent, remuneration or fees, as may be agreed upon.
(3) The Reconstruction Bank shall not grant any loan or advance or other assistance on the security of its own bonds or debentures.
(1) The Reconstruction Bank shall not enter into any kind of business with any industrial concern, of which any of the directors of the Reconstruction Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the Reconstruction Bank together hold substantial interest:
Provided that this sub-section shall not apply to any industrial concern if any director of the Reconstruction Bank-
(i) is nominated as a director of the Board of such concern by Government, or a Government company, or by the Reconstruction Bank or by a corporation established by any other law, or
(ii) is elected as a director on the Board of such industrial concern by virtue of shares held in that industrial concern by Government, or a Government company, or by the Reconstruction Bank or by a corporation established by any other law, by reason only of such nomination or election, as the case may be. Explanation I.-"Government company" has the meaning assigned to it in section 617 of the Companies Act, 1956 (1 of 1956),
Explanation II.-"Substantial interest", in relation to any industrial concern, means the beneficial interest held by one or more of the directors of the Reconstruction Bank or by any relative as defined in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956) of such director whether singly or taken together, in the shares of the industrial concern, the aggregate amount paid-up on which either exceeds five lakhs of rupees or five per cent. of the paid-up share capital of the industrial concern, whichever is the lesser.
(2) The provisions of sub-section (1)-
(i) Shall not apply to any industrial concern as specified therein if the Reconstruction Bank is satisfied that it is necessary in the public interest to enter into business with that concern, and entering into any kind of business with such industrial concern shall be in accordance with and subject to such conditions and limitations as may be provided for in the regulations;
(ii) Shall apply only so long as the conditions precedent to such disability as set out in the said sub-section continue.
The Central Government may, after due appropriation made by Parliament by law in this behalf, advance to the Reconstruction Bank interest free loans or loans with interest on such terms and conditions, as may be agreed upon.
(1) The Reconstruction Bank may, for the purpose of carrying out its functions under this Act-
(a) Issue and sell bonds and debentures with or without guarantee of the Central Government;
(b) Borrow money from the Reserve Bank-
(i) Repayable on demand or on the expiry of fixed periods, not exceeding ninety days from the date on which the money is so borrowed against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorized to invest trust money by any law for the time being in force in India;
(ii) Against bills of exchange or promissory notes arising out of bona fide commercial or trade transactions, bearing two or more good signatures and maturing within five years from the date of borrowing;
(iii) For any other purpose approved by the Central Government in accordance with the provisions of the Reserve Bank of India Act, 1934 (2 of 1934)
(c) Borrow money from such other authority, organization, institution or trust in India as may be generally or specially approved by the Central Government;
(d) Accept deposits repayable after the expiry of a period which shall not be less than twelve months from the date of making of the deposit on such terms as may be generally or specially approved by the Reserve Bank.
(2) The Central Government may, on a request being made to it by the Reconstruction Bank, guarantee the bonds and debentures issued by that Bank as to the repayment of principal and the payment of interest at such rate as may be fixed by that Government.
(3) Notwithstanding anything contained in any other law for the time being in force, the bonds and debentures issued or sold by the Reconstruction Bank shall be approved securities for the purposes of the Indian Trusts Act, 1882 (2 of 1882), the Insurance Act, 1938 (4.of 1938), and the Banking Regulation Act, 1949 (10 of 1949).
The rights and interests of the Reconstruction Bank (including any other rights incidental thereto) in relation to any loan or advance granted, or any amount recoverable, by it may be transferred by the Reconstruction Bank, either in whole or in part, by the execution or issue of any instrument, or by the transfer of any instrument by endorsement, or in any other manner in which the rights and interests in relation to such loan or advance may be lawfully transferred, and the Reconstruction Bank may, notwithstanding such transfer, act as the trustee of the transferee.
(1) Notwithstanding anything contained in the Foreign Exchange Regulation Act, 1973 (46 of 1973)or in any other enactment for the time being in force relating to foreign exchange, the Reconstruction Bank may, for the purpose of granting loans and advances under this Act, borrow, with the previous consent of the Central Government, foreign currency from any bank or financial institution in any foreign country or as otherwise prescribed.
(2) The Central Government may, where necessary, guarantee any loan taken by the Reconstruction Bank under sub-section (1), or any part thereof, as to the repayment of principal and payment of interest and other incidental charges.
(3) All loans and advances granted by the Reconstruction Bank out of foreign currency borrowed under sub-section (1) shall be expressed in terms of foreign currency as equivalent of Indian currency, calculated in accordance with the rate of exchange prevailing in India at the time of grant thereof, and the amount due there under shall be repayable in equivalent Indian currency, calculated in accordance with the rate of exchange prevailing in India at the time of repayment of such loan or advance.
(4) Any loss or profit in connection with any borrowing of foreign currency under sub-section (1), for the purpose of granting loans and advances under this Act, or with its repayment to the concerned foreign lending agency, on account of any fluctuations in the rate of exchange accruing-
(a) During the period within which the loan or advance is repayable by the industrial concern or the period of actual repayment thereof by the concern, whichever is longer, shall be reimbursed by, or paid to, as the case may be, the recipients of such loans and advances;
(b) After the expiry of the period specified in clause (a),-
(i) Shall be borne by the Reconstruction Bank in respect of normal market fluctuations in foreign exchange;
(ii) Shall be reimbursed by, or paid to, as the case may be, the Central Government in respect of fluctuations other than the normal market fluctuations in foreign exchange.
Explanation.-If any question arises as to whether any fluctuation as aforesaid is a normal fluctuation or not, the same shall be decided by the Central Government whose decision thereon shall be final.
The Reconstruction Bank may receive gifts, grants, donations or benefactions from Government or any other source.
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