(1) Regional Rural 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 Reserve Bank, give.
(2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.
24A - Inspection, audit and scrutiny by the Sponsor Bank
1*[ Notwithstanding anything contained in Section 19 and without prejudice to the provisions of Section 35 of the Banking Regulation Act, 1949 (10 of 1949), the Sponsor Bank shall, from time to time, monitor the progress of the Regional Rural Banks sponsored by it and cause inspection, internal audit and scrutiny to be made by one or more of its officers and suggest corrective measures to be taken by such Regional Rural Bank.]
(1) A Regional Rural Bank shall observe, except as otherwise required by law, he 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 the law or practice and usage customary among bankers, necessary or appropriate for the Regional Rural Bank to divulge.
(2) Every director, member of a committee or auditor, officer or other employee of a Regional Rural Bank shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Schedule to this Act.
No provision of law relating to the winding up of companies shall apply to a Regional Rural Bank and a Regional Rural Bank shall not be placed in liquidation save by order of the Central Government and in such manner as it may direct.
(1) No act of a Chairman, acting in good faith, shall be invalid merely by reason of any defect in his appointment or in the procedure.
(2) No act or proceeding of any Board of directors or of any committee of a Regional Rural 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) Acts done by a person, acting in good faith, as a director or member of a committee of a Regional Rural 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 done by a director or a member of any committee of a Regional Rural Bank after his appointment has been shown to the Regional Rural Bank to be invalid or to have terminated.
(1) A director or a member of a committee of a Regional Rural Bank shall not be responsible for any loss or expense caused to such bank by insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of a Regional Rural Bank or by the insolvency or wrongful act of any customer or debtor or 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.
(2) The Chairman of a Regional Rural Bank and every officer of the Central Government or State Government or an officer of the Reserve Bank 1*[or the National Bank] or the Sponsor Bank and every officer or other employee of a Regional Rural 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.
(1) The Central Government may, after consultation with the 1*[National Bank] and the Sponsor Bank, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely.-
(a) The manner in which the additional number of members of the Board may be filled in, under sub-section (2) of Section 9;
(b) The time and place at which the Board of directors of a Regional Rural Bank shall meet and the rules of procedure which shall be observed by the Board in regard to the transaction of business at its meetings, under sub-section (1) of Section 14;
2*[(ba) The manner in which the officers and other employees oil' the Regional Rural Banks shall be appointed;]
(c) Any other matter which is required to be, or may be, prescribed.
(3) Every rule 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 rule or both Houses agree that the rule should not be made, the rule 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 rule.
2*[(1)] The Board of directors of a Regional Rural Bank may, after consultation with the Sponsor-Bank and the 1*[National Bank] and with the previous sanction of the Central Government 3*[by notification in the Official Gazette,] make regulations, not inconsistent with the provisions of this Act and the rules made there under, to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions for this Act.
4*[(2) Every regulation shall, as soon as may be after it is made under this Act by the Board of directors, 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.]
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may make such order, not inconsistent with the provisions of this Act, as may appear to it to be necessary for the purpose of removing the difficulty:
Provided that no such order shall be made after the expiry of a period of five years from the commencement of this Act.
The provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force or in any contract, express or implied, or in any instrument having effect by virtue of any law other than this Act, and notwithstanding any custom or usage to the contrary.
[Amendment of Certain enactment] Repealed by the Repealing and Amending Act, 1988 (19 of 1988) Section 2 and Schedule I]
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