Indian Bare Acts



Year : 1968

(1) The general superintendence, direction and management of the affairs and business of the Corporation shall vest in a Board of directors who may be exercised all the powers and discharge all the functions which may be exercised or discharged by the Corporation other than those which are expressly directed or required by this Act to be done by the Corporation in general meeting.

(2) The Board in discharging its functions shall act on business principles, regard being had to public interest.

In the discharge of its functions, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may, in consultation with the Reserve Bank, give to it in writing and , if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.

The Board of directors of the Corporation shall consist of the following, namely:-

(a) One director to be nominated by the Central Government who shall be the Chairman of the Board;

(b) Two directors nominated by the appropriate Government, one of whom shall be a person who has special knowledge of co- operation and who is not an employee of the Central or State Government or of the Reserve Bank , State Bank, subsidiary bank , banking company, or Food Corporation;

(c) One director to be nominated by the Reserve Bank;

(d) Two directors to be elected in such manner as may be prescribed by the parties subscribing for shares in pursuance of the provisions of clause (d0 of sub- section (3) , and sub- section (5) of section 5;

(e) A managing director, to be appointed by the Central Government and, except in the case of first appointment , after consultation with the Board:

Provided that, in appointing a managing director of a Corporation established in a State, the Central Government may also consult the Government of that State.

(1) The managing director shall-

(a) Be a whole - time officer of the Corporation;

(b) Perform such duties as the Board may, by regulations or otherwise, assign to him;

(c) Hold office for such term, not exceeding three years, as the Central Government may specify at the time of the appointment and be eligible for re- appointment;

(d) Receive such salary and allowances and be governed by such terms and conditions of service as the Central Government may-

(i) In the case of first appointment determine, or

(ii) In the case of any subsequent appointment, determine after consultation with the Board.

(2) The Central Government may, after consultation with the Board and for sufficient cause, remove the managing director from office.

Provided that no managing director shall be so removed unless he has been given an opportunity of showing cause against his removal.

(3). If the managing director is by infirmity or otherwise rendered incapable of carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the Central Government may, after consultation with the Board, appoint another person to act in his place during his absence.

(1) A nominated director, other than the managing director , shall hold office during the pleasure of the authority nominating him and the period of such office, unless terminated earlier, shall be two years.

Provided that a nominated director shall be eligible for renomination.

(2) An elected director shall hold office for a period of two years from the date of his election;

Provided that an elected director shall continue in office until the election of his successor.

No person shall be director, who,-

(a) Except in the case of the managing director , is a salaried official of the Corporation, or

(b) Is, or at any time has been, adjudged insolvent or has suspended payment of his debts or has compounded with his creditors, or

(c) Is of unsound mind and stands so declared by a competent court or

(d) Is or has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude.

(1) If a director,-

(a) Becomes subject to any disqualification specified in section 12, or

(b) Is absent without leave of the Board for more than three consecutive meeting thereof, his seat shall thereupon become vacant,

(2) The managing director or any other director may resign his office by giving notice thereof in writing to the authority by which he was appointed or nominated, or if he is a director elected under clause (d) of section 9, to the Board, and on such resignation being accepted, shall be deemed to have vacated his office.

(1) The Board may constitute an Executive Committee consisting of the Chairman of the Board, who shall be the Chairman thereof , the managing director and two other directors, one of whom shall be a person nominated by the appropriate Government under clause (b) of section 9.

(2) The Executive Committee such other committees, whether consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons, as it may think fit for such purposes as it may decide.

(1) The Board or the Executive Committee or any other committee shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.

(2) Three directors personally present at any meeting of the Board and two members personally present at a meeting of a committee shall be the quorum for such meeting

(3) If, for any reason, the Chairman of the Board or of any committee is unable to attend any meeting of the Board or the Committee, as the case may be, the members present at the meeting shall elect one of them to preside at the meeting.

(4) If for any reason a director nominated under clause (a), clause (b) or clause (c) of section 9 is unable to attend any meeting of the Board or of any committee if he is a member thereof , the Government or the Reserve Bank by which such director was nominated may depute any other person to attend such meeting and person so deputed shall, for the purposes of the said meeting be deemed to be a director nominated under clause (a), clause (b) or clause (c), as the case may be , of the said section 9 or a member of the committee concerned.

(5) All questions which may come up before any meeting of the Board or a committee shall be decided by a majority of votes of the members present, and in the event of an equality of votes, the Chairman of the Board of the Committee, as the case may be , or in his absence the person presiding, shall have a second or casting vote.

Every director or member of a committee who has any direct or indirect pecuniary or other interest in any matter coming up for consideration at a meeting of the Board or a committee shall, as soon as possible, after the relevant facts or circumstances have come to his knowledge, disclose the nature of his interest at such meeting and the disclosure so made shall be recorded in the minutes of the meeting of the Board or of the Committee, as the case may be, and no such director or member shall thereafter take any part in any deliberation or decision of the Board or committee with respect to that matter nor shall his presence at such meeting be taken into account for the purpose of determining the quorum for the meeting at the time of such deliberation or voting and if be does vote , his vote shall be void:

Provided that nothing contained in this section shall apply to such director or member of a committee by reason only of his being a shareholder holding not more than two per cent.of the paid- up capital in any public company as defined in the Companies Act, 1956, or in any other Corporation established by any law for the time being in force in India or in any co operative society, with which or to which the Corporation has entered into or made , or proposes to enter into or make, a contract, loan, arrangement or proposal.

(1) No act or proceeding of the Board or of any of its committees shall be questioned or be invalid on the ground merely of the existence of any vacancy in, or any defect in the constitution of, the Board or the committee , as the case may be.

(2) No act done by any person actin in good faith as a director or member of any committee shall be deemed to be invalid merely on the ground that he was disqualified to be a director or member or that there was any other defect in his nomination or appointment.

Every director and every member of a committee shall be paid such fees and allowances as the Board may, by regulations, determine, for attending the meetings of the Board or, as the case may be, any of its committees, or attending to any other work of the Corporation:

that no fees shall be paid to the Chairman, managing director or any other director , if he is an officer of the Government , Reserve Bank, State Bank, subsidiary bank,1*[corresponding new bank], banking company or Food Corporation.


1. Inserted by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970) w.e.f. 19-07-1969.


Last updated on August, 2016

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