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THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959

Title : THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959

Year : 1959



(1) Save as otherwise provided in sub-section (2) the shares of a subsidiary bank shall be freely, transferable.

(2) Nothing contained in sub-section (1) shall entitle the State Bank to transfer any shares held by it in any subsidiary bank if such transfer will result in reducing the shares held by it to less than 1*[fifty-one per cent. of the issued capital consisting of equity shares] of that subsidiary bank.

18A -2* Right of registered shareholder to nominate

(1) Every individual registered shareholder of a subsidiary bank may, at any time, nominate, in the prescribed manner, an individual to whom all his rights in the shares shall vest in the event of his death.

(2) Where the shares are registered in the name of more than one individual jointly, the joint holders may together nominate in the prescribed manner, an individual to whom all their rights in the shares shall vest in the event of the death of all the joint holders.

(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such shares where a nomination made in the prescribed manner purports to confer on any individual the right to vest the shares, the nominee shall, on the death of the shareholder or, as the case may be, on the death of all the joint holders, become entitled to all the rights of the shareholder or, as the case may be, of all the joint holders, in relation to such shares to the exclusion of all other persons unless the nomination is varied or cancelled in the prescribed manner.

(4) Where the nominee is a minor, it shall be lawful for the individual registered as the holder of the shares to make nomination to appoint, in the prescribed manner, any person to become entitled to the shares in the event of his death during the minority of the nominee.]

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1. Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) for the words "fifty-five per cent, of the issued capital"

2. Inserted by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007)

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No shareholder, other than the State Bank, shall be entitled to exercise voting rights in respect of any shares held by him in excess of ten per cent. of the issued capital of the subsidiary bank concerned:

Provided
that the shareholder holding any preference share capital in the subsidiary bank shall, in respect of such capital, have a right to vote only on resolutions placed before such subsidiary bank which directly affect the rights attached to his preference shares:

Provided further that no preference shareholder shall be entitled to exercise voting rights in respect of preference shares held by him in excess of ten per cent of the total voting rights of all the shareholders holding preference share capital only.]

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1. Substituted for the words 'in excess of five percent' by the Banking Laws (Miscellaneous Provisions) Act, 1963 (55 of 1963), Section 30 w.e.f. 1-2-1964.

2. Substituted for the following by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007)

"19 - Restriction On Individual Holdings.-

(1) No person shall be registered as a shareholder in respect of any shares in a subsidiary bank held by him, whether in his own name or jointly with any other person, in excess of two hundred shares, or be entitled to payment of any dividend on the excess shares held by him, or to exercise any of the rights of a shareholder in respect of such excess shares otherwise than for the purpose of selling them:-

Provided that nothing contained in this sub-section shall apply to-

(a) The State Bank;

(b) A State Government;

(c) A Corporation;

(d) An insurer as defined in the Insurance Act, 1938

(e) A local authority.

(f) A co-operative society;

(g) A trustee of a public or private religious or charitable trust;

(h) A shareholder of an existing bank who is allotted any shares under sub-section (9) of section 13;

(2) Notwithstanding anything contained in sub-section (1) no person referred to in the proviso to that sub-section, other than the State Bank, shall be entitled to exercise voting rights in respect of any shares held by such person 1*[in excess of one per cent.] of the issued capital Of the subsidiary bank concerned."

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Notwithstanding anything contained in the Acts hereinafter mentioned in this section, the shares of a subsidiary bank shall be deemed to be included among the securities enumerated in section 20 of the Indian Trusts Act, 1882, and also to be approved securities for the purposes of Insurance Act 1938, 1[***].
 
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1. Omitted by the Banking Laws (Amendment) Act, 2012 for the following : - "and the Banking Companies Act, 1949 (10 of 1949)"
 
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2*[(1)] Every subsidiary bank shall keep at its head office a register, in one or more books, of the shareholders and shall enter therein the following particulars so far as they may be available:-

(i) The names, addresses and occupations, if any, of the shareholders and a statement of the shares held by each shareholder, distinguishing each share by its denoting number;

(ii) The date on which each person is so entered as a shareholder;

(iii) The date on which any person ceases to be a shareholder; and

(iv) Such other particulars as may be prescribed.

1*[Provided that nothing in this section shall apply to the shares held with a depository.]

3*[(2) Notwithstanding anything contained in sub-section (1), it shall be lawful for a subsidiary bank to keep the register of shareholders in computer floppies or diskettes or any other electronic form subject to such safeguards as may be prescribed.

(3) Notwithstanding anything contained in the Indian Evidence Act, 1872(1 of 1872), a copy of, or extract from, the register of shareholders, certified to be a true copy under the hand of any officer of the subsidiary bank authorised in this behalf shall in all legal proceedings, be admissible in evidence.]
 
21A - 4*Register Of Beneficial Owners

The register of beneficial owners maintained by a depository under section 11 of the Depositories Act, 1996 shall be deemed to be a register of shareholders for the purposes of this Act."

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1. Inserted by Depositories Related Laws (Amendment) Act (8 of 1997) Section 6 (w.r.e.f. 15-1-97).

2. Renumbered by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007)

3. Inserted by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007)

4. Inserted by Depositories Related Laws (Amendment) Act (8 of 1997) Section 7 (w.r.e.f. 15-1-97).

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2*[No notice of any trust], express, implied or constructive, shall be entered on the register of shareholders of a subsidiary bank or be receivable by it in respect of its shares.

1*["Provided that nothing in this section shall apply to a depository in respect of shares held by it as a registered owner on behalf of the beneficial owners.

Explanation.- For the purposes of section 21 section 21A and this section, the expression "beneficial owner", "depository" and "registered owner" shall have the meanings respectively assigned to them in clauses (a), (e) and (j) of sub-section (1) of section 2 of the Depositories Act, 1996]

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1. Inserted by Depositaries Related Laws (Amendment) Act(8 of 1997) Section 8 (w.r.e.f. 15-1-97).

2. Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) for the words "Notwithstanding anything contained in section. 19, no notice of any trust"

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Last updated on September, 2016

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