Indian Bare Acts



Year : 1968

Subject to the provisions of this Act, the Corporation may transact the following kinds of business, namely:-

(a) The granting of loans and advances, repayable within a period, not exceeding five years, to agriculturists, agricultural marketing societies, agricultural processing societies, Central Co- operative Banks, co- operative farming societies or primary agricultural credit societies for agricultural operations or for such other operations connected therewith as the Board may by regulations determine;

(b) The drawing, making , accepting, discounting, buying, selling , collecting and dallying in bills of exchange , hundies, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, scripts and other instruments, and securities whether transferable or negotiable or not;

(c) The granting and issuing of letters of credit and acquiring, holding , issuing in commission, underwriting and dealing in stock, funds, shares , debentures, debenture stock, bonds obligations, securities and investments of all kinds;

(d) The purchasing and selling of bonds , scripts or other forms of securities on behalf of constituents or others, the negotiating of loans and advances, the receiving of all kinds of bonds, scripts or valuables on deposit vaults, and collecting and transmitting money and securities;

(e) The carrying on of agency business of any description including the clearing and forwarding of goods, given of receipts and discharges;

(f) The entering into contracts of indemnity, surety ship or guarantee with specific security or otherwise;

(g) Receiving in consideration of the services mentioned in clauses (b), (c), (d), (e) and (f) such commission as may be agreed upon;

(h) Managing or selling of any property which may come into the possession of the Corporation in satisfaction or part satisfaction of any of its claims;

(i) Acquiring or holding of any property or any right, title or interest in any property which may form the security or a part of the security for any loan or advance or which may be connected with any business of the Corporation;

(j) Any other kind of business which the Central Government may, on the recommendation of the Reserve Bank, authorise;

(k) Generally the doing of such things and matters as may be incidental to or consequential upon the discharge of its functions under this Act.

Subject to the provisions of this Act , the Corporation may, for the purposes of carrying out of its functions under this Act,-

(a) Re- discount; with or sell to; the Reserve Bank or borrow money from that Bank and for that purpose, the Corporation shall be deemed to be a State Co- operative Bank within the meaning of clause 2 (a) , clause 2(b), clause 2(bb) and clause (4) of section 17 , sub- section (2) of section 46A and sub-section (2) of section 46B of the Reserve Bank of India Act, 1934 (2 of 1934);

(b) Borrow money from the Central Government or the State Government or such other authority or institution as approved in this behalf by the Central Government, on such terms and conditions as may be agreed upon.

The Corporation may, with the prior approval of the Reserve Bank, accept deposits from the appropriate Government, a local authority or any other person whether incorporated or not.

The aggregate of the amounts borrowed and deposits accepted by the Corporation and outstanding shall not at any time exceed ten times the amount of paid- up share capital and the reserve fund of the Corporation or , with the prior approval of the Central Government , fifteen times the amount of such paid up share capital and reserve fund.

The Corporation shall establish two separate funds , namely:-

(a) Agricultural Credit ( Stabilisation ) Fund ( hereinafter referred to as Stabilisation Funds ), and

(b) Reserve Fund.

(1) To the Stabilisation Fund shall be credited such sum, not being less than ten and not more than fifteen percent, as the Corporation may deem fit from out of its net annual profits before declaring a dividend.

(2) Subject to such conditions as may be specified by the Board by regulations, the amount lying to the credit of the Stabilisation Fund shall be utilised solely for the purpose of making loans or advances with a view to enabling any co- operative society or other person to pay its or his dues in case where, in the opinion of the Corporation, such society or other person is unable to pay such dues in time owing to drought, famine or other natural calamities.

(1) To the Reserve Fund shall be credited such sums not being more than fifteen percent as the Corporation may deem fit out of its not annual profits before declaring a dividend.

(2) The amounts lying to the credit of the Reserve Fund shall be utilized solely for such purposes as the Board may by regulations specify.

After making provision for bad and doubtful debts, depreciation of assets and all other matters which are usually provided for by bankers , and after crediting to the Stabilisation Fund under section 24 and to the Reserve Fund under section 25, the Corporation may, out of its annual net profits, declare a dividend.

All moneys belonging to the Corporation which may not, for the time being be required by it shall be-

(a) Deposited with the Reserve Bank or in consultation with the Reserve Bank with a scheduled Bank, State Co- operative Bank ;or Central Co-operative Bank; or

(b) Invested in the securities of the Central Government or any State Government or ;in securities in which a trustee may invest money under clause (a), clause (b), clause(bb), clause (c) or clause (d) of section 20 of the Indian Trusts Act , 1882 (2 of 1882); or

(c) Utilised in such other manner as may be approved by the Reserve Bank.

Where any amount is due to the Corporation in respect of loans or advances or other financial accommodation granted by it to any person , the Corporation or any person authorised by it in writing in this behalf , may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the amount due to it , and if the appropriate Government, or such authority , as that Government may specify in this behalf is satisfied after following such ;procedure as may be prescribed, that any amount id so due it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner and under the same condition as if it were an arrears of land revenue.

(1) Subject to the provisions of any law relating to co-operative societies for the time being in force, the corporation may-

(a) Acquire the whole or any part of the business, including the assets and liabilities of a co-operative society;

(b) Transfer the whole or any part of its business, including its assets or liabilities to a co-operative society.

(2) The terms and conditions relating to such acquisition or transfer, if agreed upon by the Board and the co-operative society concerned shall be submitted to the Reserve Bank for its approval and that Bank may by order in writing (hereafter in this section referred to as the order of approval) accord its approval thereto;

Provided that where such acquisition or transfer involves the acquisition of the assets of the co-operative society or a transfer of the liabilities of the Corporation to the co-operative society, no such approval shall be accorded by the Reserve Bank , unless it is satisfied that-

(i) The co-operative society has given notice of the proposed acquisition or transfer, in such manner as may be provided under the law relating to co-operative societies applicable to it, to all its members and creditors, giving them the opinion, of demanding payment of their share or dues, as the case may be, and

(ii) All the members and creditors have assented to the proposal or demand to have assented thereto by virtue of any member or creditor failing to execute his opinion within such period as may be specified in accordance with such law relating to co-operative societies for the time being in force.

3. The terms and conditions as approved by the Reserve Bank should come into effect from the date specified by the Bank in this behalf in the order of approval and be binding upon the Corporation and its shareholders and creditors and if such law relating to co-operative societies be binding also upon the co-operative society and its shareholders and creditors.

4.If for any reason the terms and conditions cannot come into effect on the date specified in the order of approval, the Reserve Bank may fix another suitable date for that purpose.

5.On the date on which the terms and conditions as aforesaid come into effect, the business, assets and liabilities of the Corporation, or as the case may be, the co-operative society concerned, shall by virtue of and in accordance with the provisions of aforesaid order of approval, and if such law relating to co-operative societies so provides, stand transferred to and become the business, assets and liabilities of the co-operative society or the Corporation, as the case may be.
Last updated on September, 2016

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