BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT 1970
EmailTHE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS)ACT, 1970
ACT No. 5 OF 1970
31stMarch, 1970
An Act to provide for the acquisition and transfer of theundertakings of certain banking companies, having regard to their size,resources, coverage and organisation, in order to control the heights of theeconomy and to meet progressively, and serve better, the needs of developmentof the economy in conformity with national policy and objectives and for matterconnected therewith or incidental thereto
Be it enacted by parliament inthe Twenty–first year of the Republicof India as follows: –
CHAPTER I
PRELIMINARY
1.Short title and commencement:(1) This Act may be called theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
(2) The Provisions of this Act(except section 21, which shall come into force on the appointed day) shall bedeemed to have come into force on the 19th day of July, 1969.
2.Definitions: In this Act, unless the contextotherwise requires, –
(a) "appointed day"means the 14th day of February, 1970 (3 of 1970), being the day on which theBanking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1970,was promulgated;
(b) "banking company"does not include a foreign company 5 within the meaning of section 591 of theCompanies Act, 1956 (1 of 1956);
(c) "commencement of thisAct" means the 19th day of July, 1969;
(d) "corresponding newbank", in relation to an existing bank, means the body corporate specifiedagainst such bank in column 2 of the First Schedule;
(e) "Custodian" meansthe person who becomes, or is appointed, a Custodian under section 7;
(f) "existing bank"means a banking company specified in column 1 of the First Scheduled, being acompany the deposits of which, as shown in the return as on the last Friday ofJune, 1969, furnished to the Reserve Bank under section 27 of the BankingRegulation Act, 1949, were not less than rupees fifty crores;
1 [(fa) "prescribed "means prescribed by regulations mace under this Act ;]
(g) "Schedule" meansa Scheduled to this Act;
(h) words and expressions usedherein and not defined but defined in the Banking Regulation Act, 1949, havethe meanings respectively assigned to them in that Act.
2 [(i) words and expressionsused herein and not defined either inthis Act or in then Banking Regulation Act 1949 (10 of 1949) but defined in theCompanies Act 1956 (1 of 1956) shall have the meaning respecting assigned tothem in the Companies Act 1956.]
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1. Clause (fa) inserted by theBanking Companies (Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 2 (i) (w.e. f. 15-7-1994).
2. Clause (i) inserted by theBanking Companies (Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 2 (ii)(w. e. f. 15-7-1994).
CHAPTER II
1 [TRANSFEROF THE UNDERTAKINGS OF EXISTING BANGS AND SHARE CAPITALS OF THE CORRESPONDINGNEW BANKS]
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1. Substituted for the words"TRANSFER OF THE UNDERTAKINGS OF EXISTING BANKS" by the BankingCompanies (Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 2 (ii) (w.e. f. 15-7-1994).
3.Establishment ofcorresponding new banks and business thereof: (1) On the commencement of this Act, there shall beconstituted such corresponding new banks as are specified in the FirstSchedule.
(2) The Paid–up capitalof every corresponding new bank constituted under sub–section (1) shalluntil any provision is made in this behalf in any scheme made under section 9,be equal to the paid–up capital of the existing bank in relation towhich it is the corresponding new bank.
1 [(2A)Subject to the provision of this Act the authorised capital of everycorresponding new bank shall be one thousand five hundred corers of rupeesdivided into one hundred fifty corers fully paid–up shares of ten rupees each:
Providedthat the Central Government may after consultation with the Reserve Bank and bynotification in the Official Gazette, increase or reduce the authorised capital as it thinks fir tohowever that after such increase or reduction the authorised capital shall notexceed three thousand cores or be less than one thousand five u de criers ofrupees
(2B)Notwithstanding anything contained in sub–section (2) the paid–upcapital of every corresponding new bank constituted under sub–section(1) may from time to time be increase by–
(a)such amounts as the Board of directors of the corresponding new bank may afterconsultation with the Reserve Bank and with the previous sanction of theCentral Government, transfer from the reserve fund established by such bank tosuch paid–up capital;
(b)such amounts as the Central Government may after consultation with the ReserveBank contribute to such paid –up capital:
(c)such amounts as the board of directors of the corresponding new bank may afterconsultation with the Reserve Bank and with the previous sanction of theCentral Government raise by public issue offshore in such manner as may beprescribed so however that the Central Government shall at all times hold motless than fifty one percent of the paid–up capital of each correspondingnew bank.
(2C)the entire paid–up capital of a corresponding new bank except the paid–upcapital; raised by phallic issue underclause of sub–section (2B) shall; stand vested in and allotted tothe Central Government,
(2D)the shares of every corresponding new bank not held by the central Government shall be freely transferable:
Providedthat no individual or company resident outside India or any companyincorporated under any lea not in force in India or any branchof such whether outside India or not shall at any hold or acquire bytransfer or otherwise shares of the corresponding new back so that suchinvestment in aggregate exceed the percentage not benign more than twentypercent , of the paid–up as may be specified by the Central Governmentby notification in the official Gazette.
Explanation:For the purposes of this clause :company" means any body corporate andincludes a firm or other association of individuals.
(2E) Noshareholder of the corresponding new bank other than the Central Governmentshall be entitled to exercise voting rights in respect of any shares held byhim in excess of one percent of the total voting rights of all the shareholdersof the corresponding new bank.
(2F)every corresponding new bank shall keep at its head office a register in one ormore book of the shareholder (in this Act referred to as the register) andshall enter therein the following particulars:–
(i) themeans addresses and occupations if any of the shareholders and a statementshares held by each shareholder distinguishing each by its demoting 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;
(iv)such other particulars as may be prescribed:
2 [Provided that nothing in this sub–sectionshall apply to the shares held with a depository.]
(2G)Notwithstanding contained in sub–section (2F) it shall be lawful for everycorresponding new bank to leap the register in computer floppies or diskettessubject 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 certified to be a truce copy under thehand of an officer of the corresponding new bank authorised in this behalf byit shall in all legal proceedings be admissible in evidence.]
(4) Every corresponding newbank shall be a body corporate with perpetual succession and a common seal withpower, subject to the provisions of this Act, to acquire, hold and dispose ofproperty, and to contract, and may sue and be sued in its name.
(5) Every corresponding newbank shall carry on and transact the business of banking as defined in clause(b) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), and mayengage in 3 [one or more of the other forms of business] specified in sub–section(1) of section 6 of that Act.
(6) Every corresponding newbank shall establish a reserve fund to which shall be transferred the sharepremiums and the balance, if any, standing to the credit of the reserve of thereserve fund of the existing bank in relation to which it is the correspondingnew bank, and such further sum, if any, as may be transferred in accordancewith the provisions of section 17 of the Banking Regulation Act, 1949 (10 of1949).
4 [(7) (i) The corresponding new bank shall, ifso required by the Reserve Bank, act as agent of the Reserve Bank at all placesin India where it has a branch, for –
(a)paying, receiving, collecting and remitting money, bullion and securities onbehalf of any Government of India; and
(b)undertaking and transacting any other business which the Reserve Bank may fromtime to time entrust to it.
(ii)The terms and conditions on which any such agency business shall be carried onby the corresponding new bank on behalf of the Reserve Bank shall be such asmay be agreed upon.
(iii)If no agreement can be reached on any matter referred to in clause (ii), or ifa dispute arises between the corresponding new bank and the Reserve Bank as tobe interpretation of any agreement between them, the matter shall be referredto the Central Government and the decision of the Central Government thereon shallbe final.
(iv)The corresponding new bank may transact any business or perform any functionsentrusted to it under clause (i), by itself or through any agent approved bythe Reserve Bank.]
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1. Sub-sections (2A), (2B),(2C), (2D), (2E), (2F), (2G) and (3) substituted for Sub-section original (2A)inserted by the Banking Laws (Amendment) Act, 1985 (81 of 1985)Section (7) and original Sub-section (3) by the Banking Companies (Acquisitionand Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 4 (w. e. f. 15-7-1994).
2.Proviso inserted by the Depositories Related Laws (Amendment) Act, 1997 (8 of1997) Section 16.
3. Substituted for the words"one or more forms of business" by the Banking Laws (Amendment)Act, 1983 (1 of 1984) Section 65 (i).
4.Sub-section (7) inserted by the Banking Laws (Amendment) Act, 1983 (1 of 1984)Section 65 (ii).
1 [3A.Trust not to be entered on the register:Notwithstanding anything contained in sub–section (2F) of Section 3 nonotice of any trust express implies or constructive shall be entered on theregister or be receivable by the corresponding new bank]:
2 [Provided that nothing in this section shall apply to adepository in respect of shares held by it as a registered owner on behalf ofthe beneficial owners.]
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1. Section 3A inserted by the BankingCompanies (Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 2 (ii)(w. e. f. 15-7-1994).
2. Proviso inserted by the DepositoriesRelated Laws (Amendment) Act, 1997 (8 of 1997) Section 17.
1 [3B.Register of beneficial owners: Theregister of beneficial owners maintained by a depository under section 11 ofthe Depositories Act, 1996(22 of 1996), shall be deemed to be a register ofshareholders for the purposes of this Act.
Explanation:For the purposes of section 3, section 3A and this section, the expressions"beneficial owner", "depository" and "registeredowner" shall have the meanings respectively assigned to them in clauses(a), (e) and (j) of sub–section (1) of section 2 of the DepositoriesAct, 1996(22 of 1996).]
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1. Section 3B inserted by the DepositoriesRelated Laws (Amendment) Act, 1997 (8 of 1997) Section 18.
4.Undertaking of existing banksto vest in corresponding new banks: On the commencement of this Act, the undertaking ofevery existing bank shall be transferred to, and shall vest in, thecorresponding new bank.
5.General effect of vesting: (1) The undertaking of eachexisting bank shall be deemed to include all assets, rights, powers,authorities and privileges and all property, movable and immovable, cashbalances, reserve funds, investments and all other rights and interests in, orarising out of, such property as were immediately before the commencement ofthis Act in the ownership, possession, power or control of the existing bank inrelation to the undertaking, whether within or without India, and all books ofaccounts, registers, records and all other documents or whatever naturerelating thereto and shall also be deemed to include all borrowings,liabilities and obligations of whatever kind then subsisting of the existingbank in relating to the undertaking.
(2) If, according to the lawsof any country outside India, the provisions of this Act by themselves are noteffective to transfer or vest any asset or liability situated in that countrywhich forms part of the undertaking of an existing bank to, or in, thecorresponding new bank, the affaires of the existing bank in relation to suchasset or liability shall, on and from the commencement of this Act, standentrusted to the chief executive officer for the time being of thecorresponding new bank, and the chief executive officer may exercise all powersand do all such acts and things as may be exercised or done by the existingbank for the purpose of effectively transferring such assets and dischargingsuch liabilities.
(3) The chief executive officerof the corresponding new bank shall, in exercise of the powers conferred on himby sub–section (2), take all such steps as may be required by the lawsof any such country outside India for the purpose of effecting such transfer orvesting, and may either himself or through any person authorised by him in thisbehalf realise any asset and discharge any liability of the existing bank.
(4) Unless otherwise expresslyprovided by this Act, all contracts, deeds, bonds, agreements, powers ofattorney, grants of legal representation and other instruments of whatevernature subsisting or having effect immediately before the commencement of thisAct and to which the existing bank is a party or which are in favour of theexisting bank shall be of as full force and effect against or in favour of thecorresponding new bank, and may be enforced or acted upon as fully andeffectually as if in the place of the existing bank the corresponding new bankhad been a party thereto or as if they had been issued in favour of thecorresponding new bank.
(5) If, on the appointed day,any suit, appeal or other proceeding of whatever nature in relation to anybusiness of the undertaking which has been transferred under section 4, ispending by or against the existing bank, the same shall not abate, bediscontinued or be, in any way, prejudicially affected by reason of thetransfer of the undertaking of the existing bank or of anything contained inthis Act but the suit, appeal or other proceeding may be continued, prosecutedand enforced by or against the corresponding new bank.
(6) Nothing in this Act shallbe construed as applying to the assets, rights, powers, authorities andprivileges and property, movable and immovable, cash balances and investmentsin any country outside India (and other rights and interests in, or arising outof, such property) and borrowings, liabilities and obligations of whatever kindsubsisting at the commencement of this Act, of any existing bank operating inthe country if, under the laws in force in that country, it is not permissiblefor a banking company, owned or controlled by Government, to carry on thebusiness of banking there.
CHAPTER III
PAYMENT OF COMPENSATION
6.Payment of compensation: (1) Every existing bank shallbe given by the Central Government such compensation in respect of thetransfer, under section 4, to the corresponding new bank of the undertaking ofthe existing banks as is specified against each bank in the Second Schedule.
(2) The amount of compensationreferred to in sub–section (1) shall be given to every existing bank, atits option, –
(a) in cash (to be paid bycheque drawn on the Reserve Bank) in three equal annual instalments, the amountof each instalment carrying interest at the rate of four percent per annum formthe commencement of this Act, or
(b) in saleable or otherwisetransferable promissory notes or stock certificates of the Central Governmentissued and repayable at par, and maturing at the end of –
(i) ten years from thecommencement of this Act and carrying interest from such commencement at therate of four and a half percent per annum, or
(ii) thirty years from thecommencement of this Act and carrying interest from such commencement at therate of five and a half percent per annum, or
(c) partly in cash (to be paidby cheque drawn on the Reserve Bank) and partly in such number of securitiesspecified in sub–clauses (i) or sub–clause (ii), or both, ofclause (b), as may be required by the existing bank, or
(d) partly, in such number ofsecurities specified in sub–clause (i) of clause (b) and partly in suchnumber of securities specified in sub–clause (ii) of that clause, as maybe required by the existing bank.
(3) The first of the threeequal annual instalments referred to in clause (a) of sub–section (2)shall be paid, and the securities referred to in clause (b) of that sub–sectionshall be issued, within sixty days from the date of receipt by the CentralGovernment of the option referred to in that sub–section, or where nosuch option has been exercised, from the latest date before which such optionought to have been exercised.
(4) The option referred to insub–section (2) shall be exercised by every existing bank before theexpiry of a period of three months from the appointed day (or within suchfurther time, not exceeding three months, as the Central Government may, on theapplication of the existing bank, allow) and the option so exercised shall befinal and shall not be altered or rescinded after it has been exercised.
(5) Any existing bank whichomits or fails to exercise the option referred to in sub–section (2),within the time specified in sub–section (4), shall be deemed to haveopted for payment in securities specified in sub–clauses (I) of clause(b) of sub–section (2).
(6) Notwithstanding anythingcontained in this section, any existing bank may, before the expiry of threemonths from the appointed day (or within such further time, not exceeding threemonths, as the Central Government may, on the application of the existing bank,allow) make an application in writing to the Central Government for an interimpayment of an amount equal to seventy–five percent of the amount of thepaid–up capital of such bank, as on the commencement of this Act,indicating therein whether the payment is desired in cash or in securitiesspecified in sub–section (2), or in both.
(7) The Central Governmentshall, within sixty days from the receipt of the application referred to in sub–section(6), make the interim payment to the existing bank in accordance with theoption indicated in such application.
(8) The interim payment made toan existing bank under sub–section (7), shall be set off against thetotal amount of compensation payable to such existing bank under this Act andthe balance of the compensation remaining outstanding after such payment shallbe given to the existing bank in accordance with the option exercised, ordeemed to have been exercised, under sub–section (4) or sub–section(5), as the case may be:
Provided that where any part ofthe interim payment is obtained by an existing bank in cash, the payment soobtained shall be set off, in the first instance, against the first instalmentof the cash payment referred to in sub–section (2), and in cash thepayment so obtained exceeds the amount of the first instalment, the excessamount shall be adjusted against the second instalment and the balance of suchexcess amount if any, against the third instalment of the cash payment.
(9) Any payment purported tohave been made to an existing bank under sub–section (3) of section 15of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969(22 of 1969), shall be deducted by the Central Government from the amount ofthe interim payment made to such existing bank under sub–section (7), orwhere no such interim payment has been made, from the total amount of thecompensation due to such existing bank, and the amount so deducted shall bepaid by the Central Government to the corresponding new Bank.
CHAPTER IV
MANAGEMENT OF CORRESPONDING NEW BANKS
7.Head office and management: (1) The Head Office of eachcorresponding new bank shall be at such place as the Central Government may, bynotification in the Official Gazette, specify in this behalf, and, until andsuch place is so specified, shall be at such place at which the head office ofexisting bank, in relation to which it is the corresponding new bank, is onethe commencement of this Act, located.
(2) The generalsuperintendence, direction and management of the affairs and business of acorresponding new bank shall vest in a Board of Directors which shall beentitled to exercise all such powers and do all such acts and things as thecorresponding new bank is authorised to exercise and do.
(3) (a) As soon as may be after theappointed day, the Central Government shall, in consultation with the ReserveBank, constitute the first Board of Directors of a corresponding new bank,consisting of not more than seven persons, to be appointed by the CentralGovernment, and every director so appointed shall hold office until the Boardof Directors of such corresponding new bank is constituted in accordance withthe scheme made under section 9:
Provided that the CentralGovernment may, if it is of opinion that it is necessary in the interests of hecorresponding new bank so to do, remove a person from the membership of thefirst Board of Directors and appoint any other person in his place.
(b) Every Member of the firstBoard of Directors (not being an officer of the Central Government or of theReserve Bank) shall receive such remuneration as is equal to the remunerationwhich a member of the Board of Directors of the existing bank was entitled toreceive immediately before the commencement of this Act.
(4) Until the first Board ofDirectors is appointed by the Central Government under sub–section (3),the general superintendence, direction and management of the affairs andbusiness of a corresponding new bank shall vest in a Custodian, who shall bethe chief executive officer of that bank and may exercise all powers and do allacts and things as may be exercised or done by that bank
(5) The Chairman of an existingbank holding office as such immediately before the commencement of this Act,shall be the Custodian of the corresponding new bank and shall receive the sameemoluments as he was receiving immediately before such commencement:
Provided that the CentralGovernment may, if the Chairman of an existing bank declines to become, or tocontinue to functions as, a Custodian of the corresponding new bank, or, if itis of opinion that it is necessary in the interests of the corresponding newbank so to do, appoint any other person as the Custodian of a corresponding newbank so to do, appoint any other person as the Custodian of a corresponding newbank so, to do, appoint any other person as the Custodian of a correspondingnew bank and the Custodian so appointed shall receive such emoluments as theCentral Government may specify in this behalf.
(6) The Custodian shall holdoffice during the pleasure of the Central Government
8.Corresponding new banks to beguided by the directions of the Central Government: Every corresponding new bankshall, in the discharge of its functions, be guided by such directions inregard to matters of policy involving public interest as the Central Governmentmay, after consultation with the Governor of the Reserve Bank, give.
9.Power of Central Governmentto make scheme: (1) TheCentral Government may, after consultation with the Reserve Bank, make a schemefor carrying out the provisions of this Act.
(2) In particular, and withoutprejudice to the generality of the foregoing power, the said scheme may providefor all or any of the following matters, namely: –
(a) the capital structure ofthe corresponding new bank, 1 [*]
(b) the constitution of theBoard of Directors, by whatever name called, of the corresponding new bank andall such matters in connection therewith or incidental thereto as the CentralGovernment may consider to be necessary to expedient;
(c) the reconstitution of anycorresponding new bank into two or more corporations, the amalgamation of anycorresponding new bank with any other corresponding new bank or with anotherbanking institution, the transfer of the whole or any part of the undertakingof a 2 [corresponding new bank to any othercorresponding new bank or banking institution] or the transfer of the whole or any part of theundertaking of any other banking institution to a corresponding new bank;
(d) such incidental,consequential and supplemental matters as may be necessary to carry out theprovisions of this Act.
3 [(3) every board of directors of a corresponding newbank constituted under any scheme made under sub–section (1) shallinclude –
(a) notmore than two whole–time directors to be appointed by the CentralGovernment after consultation with the Reserve Bank;
(b) onedirector who is an official of the Central Government to be nominated by theCentral Government:
Providedthat no such director shall be a director of any other corresponding new bank.
Explanation:For the purpose of this clause the expression "corresponding newbank" shall include a corresponding new bank within the meaning of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of1980) ;
(c) onedirector who is an officer of the Reserve Bank to be nominated by the CentralGovernment on the recommendation of the Reserve Bank.
Explanation:For the purpose of this clause "an officerof the Reserve Bank" includes an officer of the Reserve Bank who isdeputed by that Bank under section 54 AA of the Reserve Bank of India Act, 1934(2 of 1934) to any institution referred to therein;
(d) notmore than two directors to be nominated by the Central Government from amongstthe securities and exchange Board of India established under section 3 of theSecurities and Exchange board of India Act, 1992 (15 of 1992) the National Bankfor Agriculture and Rural Development established under section 3 of theNational Bank for Agriculture and Rural Development Act, 1981 (61 of 1981)public financial institutions as specified in sub–section 91) ornotified from time to time under sub–section (2) of section 44 ofthe Companies Act, 1956 (1 of 1956) andother institutes established or constituted by or under any central Act or incorporated under the Companies Act, 1946 and having not less thanfifty–one percent of the paid–up share capital held or controlledby the central; Government;
(e) onedirectors from among such of the employees of the corresponding new bank whoare workmen under clause (s) of section 2 of the Industrial Disputes Act, 1947to be nominated by the CentralGovernment in such manner as may be specified in a scheme made under thissection:
(f) onedirector from among the employees of the corresponding new bank who are notworkmen under clause (s) of section 2 ofthe Industrial Disputes Act 1947 (14 of 1947) to be nominated by the CentralGovernment after consolation with the Reserve Bank;
(g) Onedirector who has been a Chartered Accountant for not less than fifteen years tobe nominated by the Central Government after consultation with the ReserveBank;
(h)subject to the provisions of clause (i) not more than six directors to benominated by the Central Government.
(i)Where the capital issued under clause (c) of sub–section (2B) of section(3) is–
(i) notmore than twenty percent of the total paid–up capital not more than twodirectors.
(ii)more than twenty percent but not more than forty percent of the total paid–upcapital not more than four directors,
(iii)more than forty percent of the total paid–up capital not more than sixdirectors,
to beelected by the shareholders other than the Central Government from amongstthemselves:
Providedthat on the assumption of charge after election of any such directors underthis clause equal number of directors nominated under clause (h) shall retirein such manner as may be specified in the scheme.
(3A)have special knowledge or practical experience in respect of one or more of thefollowing matters, namely:–
(A) (i) agricultural and rural economy,
(ii)banking,
(iii)Co–operation,
(iv) Economics,
(v)Finance,
(vi)law
(vii)small–scale industry.
(viii)any other matter the special knowledge of and practical experience in whichwould in the opinion of the Reserve Bank be useful to the corresponding newbank;
(B)Represent the interests of deposits or
(C)Represent the interests of farmers workers and artisans.
(3B)Where the Reserve Bank is of the opinion that any director of a correspondingnew bank elected under clause elected under clause (i) of subsection (3) doesnot fulfil the requirement of sub–section (3A) it may after giving tosuch director and the bank a reasonable opportunity of being heard by orderremove such director and on such removalthe Board of directors shall co–opt any other person fulfilling therequirement of sun–section (3A) as a director in place of the person soremoved till a director is dully elected by the shareholders of thecorresponding new bank in the next annual general meeting and the person so co–optedshall be deemed to have been duly elected by the shareholders of thecorresponding new bank as a director.]
(4) The Central Government may,after consultation with the Reserve Bank, make a scheme to amend or vary anyscheme made under sub–section (1).
4 [(5) On and from the date of coming into operation of ascheme made under this section with respect to any of the matters referred toin clause (c) of sub–section (2) or any matters incidental,consequential and supplement thereto, –
(a) thescheme shall be binding on the corresponding new bank or corporations orbanking institutions, and also on the members, if any, the depositors, andother creditors and employees of each of them and one any other persons havingand right or liability in relation to anyof them including the trustees or other persons, managing or in anyother manner connected with, any provident fund or other fund maintained by anyof them;
(b) theproperties and assets of the corresponding new bank, or as the case may be, ofthe banking institution shall, by virtue of and to the extent provided in thescheme, stand transferred to, and vested in , and the liabilities of thecorresponding new bank , or, as the case may be, of the banking institutionshall, by virtue of, and to the extent providedin the scheme, stand transferred to, and become the liabilities of thecorporation or corporations brought into existence by reconstitution of thebanking institution or the corresponding new bank, as the case may be.
Explanation5 [(I)]:In this section, "banking institution" means a banking company andincludes the State Bank of India or a subsidiary bank.]
5 [Explanation II: Forthe purposes of this section, the expression"corresponding new bank" shall include a corresponding newbank within the meaning of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40of 1980).]
4 [(6)] Every scheme made by the Central Government under this Actshall be laid, as soon as may be after it is made, before each House ofParliament while it is in session for a total period of thirty days 6 [which may be comprised in one session or in two ormore successive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid] following both Houses agreein making any modification in the scheme or both Houses agree that the schemeshould not be made, the scheme shall thereafter have effect only in suchmodified from or be of no effect, as the case may be; so, however that any suchmodification or annulment shall be without prejudice to the validity ofanything previously done under that scheme.
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1. Thewords "so however that the paid–upcapital of any such bank shall not be in excess of rupees fivehundred crores" omitted by the Banking Companies (Acquisition and TransferUndertakings) Amendment Act 1994 (37 of 1994) Section 6 (i) (w. e. f. 15-7-1994).
2.Substituted for the words "corresponding new bank to any other banking institution" by theBanking, Public Financial Institutions and Negotiable Instruments Laws(Amendment) Act, 1988 (66 of 1988) Section 31 (a) (ii)
3.Sub-sections (3), (3A) and (3B) substituted for the original sub-section (3) bythe Banking Companies (Acquisition and Transfer Undertakings) Amendment Act1994 (37 of 1994) Section 6 (ii)(w. e. f. 15-7-1994).
4. Sub-section (5) renumberedas sub-section (6) by the Banking Laws (Amendment) Act, 1983 (1of 1984) Section 66 (i).
5. Explanation renumbered asExplanation I and Explanation II inserted by the Banking, Public FinancialInstitutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988)Section 31 (b).
6.Substituted for the words "which may be comprised in one session or in two successivesessions, and if, before the expiry of the session in which it is so laid or thesession immediately" by the Banking Laws (Amendment) Act, 1983 (1of 1984) Section 66 (ii).
CHAPTER V
MISCELLANEOUS
10.Closure of accounts anddisposal of profits: (1) Every corresponding new bank shall cause its books to beclosed and balanced on the 31st day of December 1 [or such other date in each year as the CentralGovernment may, by notification in the Official Gazette, specify] and shall appoint, with theprevious approval of the Reserve Bank, auditors for the audit of its accounts:
2 [Provided that with a view to facilitating thetransition from one period of accounting to another period of accounting underthis sub–section, the Central Government may, by order published in the Official Gazette, made such provisionsas it considers necessary or expedient for the closing and balancing of, or forother matters relating to, the books or accounts in respect of the concernedyears.]
(2) Every auditor of acorresponding new bank shall be a person who is qualified to act as an auditorof a company under section 226 of the Companies Act, 1956, and shall receivesuch remuneration as the Reserve Bank may fix in consultation with the CentralGovernment
(3) Every auditor shall besupplied with a copy of the annual balance–sheet and profit andloss account and a list of all books kept by the corresponding new bank,and it shall be the duty of the auditor to examine the balance–sheet andprofit and loss account with the accounts and vouchers relating thereto, and inthe performance of his duties, the auditor –
(a) shall have, at allreasonable times, access to the books, accounts and other documents of thecorresponding new bank.
(b) may, at the expense of thecorresponding new bank, employ accountants or other persons to assist him ininvestigating such accounts, and
(c) may, in relation to suchaccounts, examine the Custodian or any officer or employee of the correspondingnew bank.
(4) Every auditor of acorresp0nding new bank shall make a report to the Central Government upon theannual balance–sheet and accounts and in every such report shall state –
(a) whether, in his opinion,the balance–sheet is a full and fair balance–sheet containing al,the necessary particulars and is properly drawn up so as to exhibit a true andfair view of the affairs of the corresponding new bank, and in case he hadcalled for any explanation or information, whether it has been given andwhether it is satisfactory;
(b) whether or not thetransactions of the corresponding new bank, which have come to his notice, havebeen within the powers of that bank;
(c) whether or not the returnsreceived from the offices and branches of the corresponding new bank have beenfound adequate for the purposes of his audit;
(d) whether the profit and lossaccount shows a true balance of profit or loss for the period covered by suchaccount; and
(e) any other matter which heconsiders should be brought to the notice of the Central Government.
3 [Explanation I: For the purposes of this Act–
(a) thebalance–sheet shall not be treated as not disclosing a true and fairview of the affairs of the corresponding new bank, and
(b) theprofit and loss account shall not be treated as not showing a true balance ofprofit or loss for the period covered by such account,
merelyby reason of the fact that the balance–sheet or, as the case may be, theprofit and loss account, does not disclose any matter which are by theprovisions of the Banking Regulation Act, 1949, read with the relevantprovisions of this Act, or any other Act, not required to be disclosed.
ExplanationII: For the purposes of this Act the accounts of the correspondingnew bank shall not be deemed as having not been properly drawn up on the groundmerely that they do not disclose certain matters if –
(i)those matter are such as the corresponding new bank is, by virtue of anyprovision contained in the Banking Regulation Act, 1949(30 of 1949), read withthe relevant provisions of this Act, or any other Act, not required todisclose; and
(ii)the provisions referred to in clause (i) are specified in the balance–sheetand profit and loss account of the corresponding new bank or in the auditor’sreport.]
(5) The report of the auditorshall be verified, signed and transmitted to the Central Government.
(6) The auditor shall also forwarda copy of the audit report to the corresponding new bank and to the ReserveBank.
(7) After making provision forbad and doubtful, debts, depreciation in assets, contributions to staff andsuperannuating funds and all other matters for which provision is necessaryunder any law, or which are usually provided for by banking companies, acorresponding new bank 4 [may outof its net profits declare a dividend and retain the surplus if any;]
5 [(7A) Every corresponding new bank shall furnish to theCentral Government 6 [and to the Reserve Bank]the annual balance–sheet, the profit and loss account, and the auditor’sreport and a report by its Board of directors on the working and activities ofthe bank during the period covered by the Accounts.]
(8) The Central Governmentshall cause every auditor’s report and report on the working and activities ofeach corresponding new bank to be laid 7 [as soon as may be after they are received before eachHouse of Parliament, 8 [*]].
9 [(9) without prejudice to the foregoing provisions, theCentral Government may, at any time, appoint such number of auditors as itthinks fit to examine and report on the accounts of a corresponding new bankand the auditors so appointed shall have all the rights, privileges and authorityin relation to the audit of the accounts of the corresponding new bank which anauditor appointed by the corresponding new bank has under this section.]
____________________
1.Substituted for the words "of each year" by the Banking, Public FinancialInstitutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988)Section 32 (a).
2. Proviso inserted by the Banking,Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act,1988 (66 of 1988) Section 32 (b).
3. Explanations inserted by theBankingLaws (Amendment) Act, 1983 (1 of 1984) Section 67 (i).
4.Substituted for the words "shall transfer the balance of profits to the CentralGovernment" by the Banking Companies (Acquisition andTransfer Undertakings) Amendment Act 1994 (37 of 1994) Section 7 (i) (w. e. f. 15-7-1994).
5.Sub-section (7A) inserted by the Banking Laws (Amendment) Act, 1983 (1 of 1984)Section 67 (ii).
6.Inserted by the Banking Companies(Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 7 (ii)(w. e. f. 15-7-1994).
7.Substituted for the words "for not less than thirty days before each House of Parliament assoon as may be after each such report is received by the CentralGovernment" by the Banking Laws (Amendment) Act, 1983 (1 of 1984)Section 67 (iii).
8. Thewords "while it is in session, for a total period of thirty days which maybe comprised in one session or in two or more successive sessions" omittedby the Banking Laws (Amendment) Act, 1985 (81 of 1985) Section 9.
9.Sub-section (9) inserted by the Banking Laws (Amendment) Act, 1983 (1 of 1984)Section 67 (iv).
1 [10A.Annual general meeting: (1) ageneral meeting (in this Act referred to as an annual general meeting) of everycorresponding new bank which has issued capital under clause (c) of sub–section(2B) of section 3 shall be held at the place of the head office of the bank ineach ear at such as shall from time to time be specified by the Board ofdirectors:
providedthat such annual general meeting shall be held before the expiry of six weeksfrom the date on which the balance sheet together with the profit and lossaccount and auditors report is under sub–section (7A) of section 10forwarded to the Central Government or to the Reserve Bank whichever date isearlier.
(2) theshareholders present at an annual general meeting shall be entitled to discussthe balance–sheet and the profit and loss account of the correspondingnew bank made up to the previous 31st day of March the report of the Board ofDirectors on the working and activities of the corresponding new bank for theperiod covered by the accounts and the auditors report on the balance–sheetand accounted.]
____________________
1. Section 10A insertedby the Banking Companies(Acquisition and Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 8 (w. e.f. 15-7-1994).
11.Corresponding new bankdeemed to be an Indian company: For the purposes of the Income–tax Act, 1961 (43 of 1961),every corresponding new bank shall be deemed to be an Indian company and acompany in which the public are substantially interested.
12.Removal of Chairman fromoffice: (1) Every person holdingoffice, immediately before the commencement of this Act, as Chairman of anexisting bank shall, if he becomes Custodian of the corresponding new bank, hedeemed, on such commencement, to have vacated office as such Chairman.
(2) Save as otherwise providedin sub–section (1), every officer or other employee of an existing bankshall become, on the commencement of this Act, an officer or other employee, asthe case may be, of the corresponding new bank and shall hold his office orservice in that bank on the same terms and conditions and with the same rightsto pension, gratuity and other matters as would have been admissible to him ifthe undertaking of the existing bank had not been transferred to and vested inthe corresponding new bank and continue to do so unless and until hisemployment in the corresponding new bank is terminated or until hisremuneration, terms or conditions are duly altered by the corresponding newbank.
(3) For the persons whoimmediately before the commencement of this Act were the trustees for anypension, provident, gratuity or other like fund constituted for the officers orother employees of an existing bank, there shall be substituted as trusteessuch persons as the Central Government may, by general or special order,specify.
(4) Notwithstanding anythingcontained in the Industrial Disputes Act, 1947 (14 of 1947), or in any other lawfor the time being in force, the transfer of the services of any officer orother employee from an existing bank to a corresponding new bank shall notentitle such officer or other employee to any compensation under this Act orany other law for the time being in force and no such claim shall beentertained by any court, tribunal or other authority.
1 [12A.:(1) No officer or other employee [otherthan an employee within the meaning of clause (13) of section 2 of the Paymentof Bonus Act, 1965(21 of 1965)] of corresponding new bank shall be entitled tobe paid any bonus.
(2) Noemployee of a corresponding new bank, being an employee within the meaning of clause (13) of section2 of the Payment of Bonus Act, 1965(21 of 1965), shall be entitled to be paid any bonus except in accordancewith the provisions of that Act.
(3) Theprovisions of this section shall have effect notwithstanding any judgment, decree or order of any court,tribunal or other authority and notwithstanding anything contained in any other provision of this Act or in the IndustrialDisputes Act 1947(14 of 1947), or any other law for the time being in force or any practice, usage or custom or any contract, agreement,settlement, award or other instrument.]
____________________
1. Section 12A inserted by the BankingLaws (Amendment) Act, 1984 (64 of 1984) Section 4.
13.Obligations as to fidelityand secrecy: (1) Everycorresponding now bank shall observe, except as otherwise required by law, thepractices and usages customary among bankers, and in particular, it shall notdivulge any information relating to or to the affairs of its constituentsexcept in circumstances in which it is, in accordance with law or practices andusages customary among bankers, necessary or appropriate for the correspondingnew bank to divulge such information.
(2) Every director, member of alocal board or a committee, or auditor, adviser, officer or other employee of acorresponding new bank shall, before entering upon his duties, make adeclaration of fidelity and secrecy in the form set out in the Third Schedule.
(3) Every Custodian of acorresponding new bank shall, as soon as possible, make a declaration offidelity and secrecy in the form set out in the Third Schedule.
14.Custodian to be public servant:Every Custodian of acorresponding new bank shall be deemed to be a public servant for the purposesof Chapter IX of the Indian Penal Code (45 of 1860).
15.Certain defects not toinvalidate acts or proceedings: (1) All acts done by the Custodian, acting in good faith, shall,notwithstanding any defect in his appointment or in the procedure, be valid.
(2) No act or proceeding of anyBoard of Directors or a local board or committee of a corresponding new bankshall be invalid merely on the ground of the existence of any vacancy in, ordefect in the constitution, of, such board or committee, as the case may be.
(3) All acts done by a personacting in good faith as a director or member of a local board or committee of acorresponding new bank shall be valid, notwithstanding that it may afterwardsbe discovered that his appointment was invalid by reason of any defect ordisqualification or had terminated by virtue of any provision contained in anylaw or the time being in force:
Provided that nothing in thissection shall be deemed to give validity to any act by a director or member ofa local board or committee of a corresponding new bank after his appointmenthas been shown to the corresponding new bank to be invalid or to haveterminated.
16.Indemnity: (1) Every Custodian of acorresponding new bank and every officer of the Central Government or of theReserve Bank and every officer or other employee of a corresponding new bank,shall be indemnified by such bank against all losses and expenses incurred byhim in or in relation to the discharge of his duties except such as have beencaused by his own willful act or default.
(2) A director or member of alocal board or committee of a corresponding new bank shall not be responsiblefor any loss or expense caused to such bank by the insufficiency or deficiencyof the value of, or title to, any property or security acquired or taken onbehalf of the corresponding new bank, or by the insolvency or wrongful act ofany customer or debtor, or by anything done in or in relation to the executionof the duties of his office, unless such loss, expenses, insufficiency ordeficiency was due to any willful act or default on the apart of such directoror member.
1 [16A.Arrangement with corresponding new bank on appointof directors to prevail: (1) Where any arrangement entered into bya corresponding new bank with a company provides for the appointment by theCorresponding new bank of one or more directors of such company, such provisionand any appointment of directors made inpursuance thereof shall be valid and effective notwithstanding anything to thecontrary contained in the Companies Act, 1956, or in any other law for the timebeing in force or in the memorandum, articles of association or any otherinstrument relating to the Company, and any provision regarding sharequalification, age limit, number of directorships, removal from office ofdirectors and such like conditions contained in any such law or instrumentaforesaid, shall not apply to any director appointed by the corresponding newbank in pursuance of the arrangement as aforesaid.
(2) Anydirector appointed as aforesaid shall –
(a)hold office during the pleasure of the corresponding new bank and many beremoved or substituted by any person by order in writing of the correspondingnew bank;
(b) notincur any obligation or liability by reason only of his being a director or foranything done or omitted to be done in good faith in the discharge of hisduties as a director or anything in relation thereto;
(c) notbe liable to retirement by rotation and shall not be taken into account forcomputing the number of directors liable to such retirement.]
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1. Section 16A inserted by the BankingLaws (Amendment) Act, 1983 (1 of 1984) Section 68.
17.References to existing bankson and from the commencement of this Act: Any reference to any existing bank in any law, otherthan this Act, or in any contract or other instrument shall, in so far as itrelates to the undertaking which has been transferred by section 4, beconstrued as a reference to the corresponding new bank.
18.Dissolution: No provision of law relating towinding up of corporations shall apply to a corresponding new bank and nocorresponding new bank shall be placed in liquidation save by order of theCentral Government and in such manner as it may direct.
19.Power to make regulations: (1) The Board of Directors of acorresponding new bank may, after consultation with the Reserve Bank and withthe previous sanction of the Central Government 1 [by notification in the Official Gazette], make regulations, notinconsistent with the previsions of this Act or any scheme made thereunder, toprovide for all matters for which provision is expedient for the purpose ofgiving effect to the provisions of this Act.
(2) In particular, and withoutprejudice to the generality of the foregoing power, the regulations may providefor all or any of the following matters, namely: –
(a) the powers, functions andduties of local boards and restrictions, conditions or limitations, if any,subject to which they may be exercised or performed, the formation andconstitution of local committees and committees of local board (including thenumber of members of any such committee), the powers, functions and duties ofsuch committees, the holding of meetings of local committees and committees oflocal boards and the conduct the business thereat;
(b) the manner in which the business of the localboards shall be transacted and the procedure in connection therewith;
2 [(ba) the nature of shares ofthe corresponding new bank the manner in which and the conditions subject towhich shares may be held and transferred and generally all matters relating tothe rights and duties of shareholders;
(bb)the maintenance of register, and the particulars to be entered in the registerin addition to those specified in sub–section (2F) of section 3, thesafeguards to be observed in the maintenance of register in computer floppiesor diskettes inspection and clause of the register and all other matterconnected therewith.
(bc)the manner in which manner in which general meetings shall be concerned, theprocedure to be followed thereat and themanner in which voting rights may be exercised;
(bd)the holding of meetings of shareholders of shareholders and the business to betransacted thereat;
(be)the manner in which notices may be served on behalf of the corresponding newbank upon shareholders or other persons;
(bf)the manner in which the directors nominated under clause 9h) of sub–section(3) of section 9 shall retire.]
(c) the delegation of powersand functions of the board of directors of a corresponding new bank to thegeneral manager, director, officer or other employee of that bank;
(d) the conditions orlimitation subject to which the corresponding new bank may appoint advisers,officers or other employees and fix their remuneration and other terms andconditions of service;
(e) the duties and conduct ofadvisers, officers or other employees of the corresponding new bank;
(f) the establishment andmaintenance of superannuation, pension, provident or other funds for thebenefit of officers or other employees of the corresponding new bank or of thedependants of such officers or other employees and the granting of superannuationallowances, annuities and pensions payable out of such funds;
(g) the conduct and defence oflegal proceedings by or against the corresponding new bank and the manner ofsigning pleadings;
(h) the provision of a seal forthe corresponding new bank and the manner and effect of its use;
(i) the form and manner inwhich contracts binding on the corresponding new bank may be executed;
(j) the conditions and therequirements subject to which loans or advances may be made or bills may bediscounted or purchased by the corresponding new bank;
(k) the persons or authoritieswho shall administer any pension, provident or other fund constituted for thebenefit of officers or other employees of the corresponding new bank or theirdependants;
(l) the preparation andsubmission of statements of programmes of activities and financial statementsof the corresponding new bank and the period for which and the time withinwhich such statements and estimates are to be prepared and submitted; and
(m) generally for the efficientconduct of the affairs of the corresponding new bank.
(3) Until any regulation ismade under sub–section (1), the articles of association of the existingbank and every regulation, rule, bye–law or order made by the existingbank shall, if in force at the commencement of this Act, be deemed to be theregulations made under sub–section (1) and shall have effect accordinglyand any reference therein to any authority of the existing bank shall be deemedto be a reference to the corresponding authority of the corresponding new bankand until any such corresponding authority is constituted under this Act, shallbe deemed to refer to the Custodian.
3 [(4) Every regulation shall, as soon as may be after itis made under this Act by the Board of directors of a corresponding new bank,be forwarded to the Central Government and that Government shall cause a copyof 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 intwo or more successive sessions, and if, before the expiry of the sessionimmediately following the session or the successive sessions aforesaid, bothHouses agree in making any modification in the regulation or both Houses agreethat the regulation should not be made, the regulation shall thereafter haveeffect 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 tothe validity of anything previously done under that regulation.]
____________________
1. Inserted by the DelegatedLegislation Provisions (Amendment) Act, 1985 (4 of 1986) Section 2 and ScheduleSl. No. 80 (w. e. f. 15-5-1986).
2. Clauses (ba) to (bf) insertedby the Banking Companies (Acquisitionand Transfer Undertakings) Amendment Act 1994 (37 of 1994) Section 9 (w. e. f. 15-7-1994).
3. Sub-section (4) inserted bythe BankingLaws (Amendment) Act, 1983 (1 of 1984) Section 69.
20.Amendment of certainenactments: (1) Inthe Banking Regulation Act, 1949 (10 of 1949),
(a) in section 34A, in sub–section(3), for the words "and any subsidiary bank", the words, figures andbrackets "a corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and anysubsidiary bank" shall be substituted;
(b) in section 36AD, in sub–section(3), for the words "and any subsidiary bank", the words, figures andbrackets "a corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and anysubsidiary bank" shall be substituted;
(c) in section 51, for thewords "or any other banking institution notified by the Central Governmentin this behalf", the words, figures and brackets "or anycorresponding new bank constituted under section 3 of the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970, or any other bankinginstitution notified by the Central Government in this behalf" shall besubstituted;
(d) in the Fifth Schedule, inPart I of paragraph 1, in clause (e), the Explanations shall be deemed never tohave been inserted.
(2) In the Industrial DisputesAct, 1947 (14 of 1947), in section 2, in clause (bb), for the words "andany subsidiary bank", the words, figures and brackets "acorresponding new bank constituted under section 3 of the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970, and any subsidiarybank" shall be substituted.
(3) In any Banking Companies(Legal Practitioners’ Clients’ Accounts) Act, 1949 (46 of 1949), in section 2,in clause (a), for the words "and any subsidiary Bank", the words,figures and brackets "a corresponding new bank constituted under section 3of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970,and any subsidiary bank" shall be substituted.
(4) In the Deposit InsuranceCorporation Act, 1961 (47 of 1961), –
(a) in section 2, –
(i)after clauses (c), thefollowing clauses shall be inserted namely: –
‘(ee) "Corresponding newbank" means a corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970;
(ii) in clause (g),
(a) for the words "or abanking company", the words "a corresponding new bank or a bankingcompany", and
(b) for the words "with abanking company", the words "with a corresponding new bank or with abanking company", shall be substituted;
(iii) in clause (i), after thewords "banking company", the words "or a corresponding newbank" shall be inserted;
(b) section 13 shall be re–numberedas sub–section (1) therefore and after sub–section (1) as so re–numbered,the following sub–section shall be inserted, namely: –
"(2) The provisions ofclauses (a), (b), (c), (d) and (h) (5) of sub–section (1) shall apply toa corresponding new bank as they apply to a corresponding new bank as theyapply to a banking company."
(5) In the State AgriculturalCredit Corporation Act, 1968 (60 of 1968), –
(a) in section 2, after clause(i), the following clause shall be inserted, namely : –
‘(ii) "corresponding newbank" means a corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970;’;
(b) after the words"subsidiary banks" or "subsidiary bank", as the case maybe, occurring in clause (d) of sub–section (3) of section 5, in clause(b) of section 9 and in the proviso to section 18, the words"corresponding new banks" or "corresponding new bank", asthe case may be, shall be inserted.
21.Repeal and savings: (1) The Banking Companies(Acquisition and Transfer of Undertakings) Ordinance, 1970 (3 of 1970), ishereby repealed.
(2) Notwithstanding such repealand notwithstanding any judgement, decree or order of any court or tribunal, –
(a) any action taken, orpurported to have been taken, or anything done, or purported to have been done,between the 19th day of July, 1969, and the 10th day of February, 1970, by anycorresponding new bank purported to have been constituted under the BankingCompanies (Acquisition and Transfer of Undertakings) Ordinance, 1969 (8 of1969), or the Banking Companies (Acquisition and Transfer of Undertakings) Act,1969 (22 of 1969), or by any person purporting to act on behalf of such bankand any right, obligation or liability acquired or incurred, between the saiddates, by or on behalf of such corresponding new bank shall be deemed to havebeen taken, done, acquired or incurred under the provisions of this Act by oron behalf of the corresponding new bank constituted thereunder.
(b) Any action taken, orpurported to have been taken, or anything done, or purported to have been done,between the 10the day of February, 1970, and the appointed day, by an existingbank or by any person acting on behalf of such bank, and any right, obligationor liability acquired or incurred, between the said dates, by or on behalf ofsuch existing bank shall be deemed to have been taken, done, acquired orincurred under the provisions of this Act by or on behalf of the correspondingnew bank constituted thereunder :
(c) Anything done or any actiontaken, including any order made, notification issued or directions given underthe Banking Companies (Acquisition and Transfer and Undertakings) Ordinance,1970, shall be deemed to have been done, taken, made, issued or given, as thecase may be, under the corresponding provisions of this Act.
(3) Any suit, appeal or otherproceedings of whatever nature instituted on or after the 19th day of July,1969, by or against a corresponding new bank purported to have been constitutedby the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance,1969 (8 of 1969), or the Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1969 (22 of 1969), shall not abate, be discontinued, or be,in any way, prejudicially affected by reason of the expiry of the saidOrdinance or the invalidation of the said Act, as the case may be, but suchsuit, appeal or other proceedings may be continued, prosecuted and enforced byor against the corresponding new bank as if such suit, appeal or otherproceeding had been instituted by or against the corresponding new bankconstituted under this Act.
THE FIRST SCHEDULE
(SeeSection 2, 3 and 4)
———————————————–
Existing bank Correspondingnew Bank
———————————————–
Column 1 Column2
———————————————–
The Central Bank of IndiaLimited . . . CentralBank of India.
The Bank of India Limited . . . Bank of India
The Punjab National BankLimited . . . Punjab National Bank
The Bank of Baroda Limited . . . Bank of Baroda.
The United Commercial BankLimited . . . 1 [UCO Bank].
Canara Bank Limited . . . Canara Bank.
United Bank of India Limited . . . United Bank of India.
Dena Bank Limited . . . Dena Bank
Syndicate Bank Limited . . . Syndicate Bank.
The Union Bank of India Limited . . . UnionBank of India.
Allahabad Bank Limited . . . Allahabad Bank
The Indian Bank Limited . . . Indian Bank
The Bank of Maharashtra Limited . . . Bankof Maharashtra.
The Indian Overseas BankLimited . . . IndianOverseas Bank
———————————————–
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1. Substituted for the words"United Commercial Bank" by the Banking Laws (Amendment)Act, 1985 (81 of 1985) Section 10.
THE SECOND SCHEDULE
(Seesection 6)
———————————————–
Name of the existing Bank Amountof compensation
(inlakhs of rupees)
———————————————–
The Central Bank of India . . . . 1750
The Bank of India . . . . 1470
The Punjab National BankLimited . . . . 1920
The Bank of Baroda Limited . . . . 840
The United Commercial BankLimited . . . . 830
Canara Bank Limited . . . . 360
United Bank of India Limited . . . . 420
Dena Bank Limited . . . . 360
Syndicate Bank Limited . . . . 360
The Union Bank of India Limited . . . . 310
Allahabad Bank Limited . . . . 310
The Indian Bank Limited . . . . 230
The Bank of Maharashtra Limited . . . . 230
The Indian Overseas BankLimited . . . . 250
———————————————–
THE THIRD SCHEDULE
[See sub–sections(2) and (3) of section 13]
DECLARATION OF FIDELITY AND SECRECY
I, ____________ do herebydeclare that I will faithfully, truly and to the best of my skill and abilityexecute and perform the duties required of me as Custodian, Director, member oflocal Board, member of Local Committee, auditor, adviser, officer of otheremployee (as the case may be) of the {Name of corresponding new bank to befilled in} and which properly relate to the office or position in the said heldby me.
I further declare that I willnot communicate or allow to be communicated to any person not legally entitledthereto any information relating to the affairs of the {Name of correspondingnew bank to be filled in}or to the affairs of any person having any dealingwith the {Name of corresponding new bank to be filled in}; nor will I allow anyperson to inspect or have access to any books or documents belonging to or inthe possession of the {Name of corresponding new bank to be filled in}andrelating to the business of the {Name of corresponding new bank to be filledin} or to the business of any person having any dealing with the{Name ofcorresponding new bank to be filled in}.
