EXPORT-IMPORT BANK OF INDIA ACT, 1981 THE EXPORT-IMPORT BANK OF INDIA ACT, 1981 [Act, No. 28 of 1981] [11th
September, 1981] An Act to
establish a corporation to be known as the Export-Import Bank of India for
providing financial assistance to exporters and importers, and for functioning
as the principal financial institution for co-ordinating the working of
institutions engaged in financing export and import of goods and services with
a view to promoting the country's international trade and for matters connected
therewith or incidental thereto. BE it
enacted by Parliament in the Thirty-second Year of the Republic of India as
follows:- (1)
This Act may
be called the Export-Import Bank of India Act, 1981. (2)
It extends
to the whole of India. (3)
It shall
come into force on such date as the Central Government may, by notification in
the Official Gazette, appoint, and different dates may be appointed for
different provisions of this Act. In this Act,
unless the context otherwise requires,-- (a)
"Board"
means the Board of Directors of Exim Bank referred to in S. 6; (b)
"Development
Bank" means the Industrial Development Bank of India established under the
Industrial Development Bank of India Act, 1964; (c)
"Exim
Bank" means the Export-Import Bank of India established under section 3; (d)
"export"
and "import" mean, respectively, export from or import into India or
any other country of goods or services, or both; (e)
"goods"
includes all materials, commodities and articles in a solid, liquid or gaseous
state and all forms of energy; (f)
"notification"
means a notification published in the Official Gazette; (g)
"prescribed"
means prescribed by regulations made under this Act; (h)
"Reserve
Bank" means the Reserve Bank of India constituted under the Reserve Bank
of India Act, 1934; (i)
"scheduled
bank" means a bank, for the time being, included in the Second Schedule to the Reserve Bank of India Act, 1934; (j)
"services"
includes,-- (i)
providing
personnel (including skilled or unskilled workmen and persons for rendering
technical or other services) for the purposes of any work or project (by
whatever name called) or any activity; (ii)
transferring
of technology, including transferring, or securing the transfer of rights, know
how, expertises or other skill with respect to any patent, invention, model,
design, secret formula or process or similar property; (iii)
furnishing
any information, blueprints, plans, or advice with respect to any matter; and (iv)
making
available any other resources. (1)
With effect
from such date as the Central Government may, by notification, appoint, there
shall be established for the purposes of this Act a corporation to be known as
the Export-Import Bank of India. (2)
The Exim
Bank shall be a body corporate with the name aforesaid having perpetual
succession and a common seal with power, subject to the provisions of this Act,
to acquire, hold and dispose of property and to contract, and may, by that
name, sue or be sued. (3)
The head
office of the Exim Bank shall be at Bombay or at such other place as the
Central Government may, by notification, specify. (4)
The Exim
Bank may establish offices, branches or agencies at such places in or outside
India as it may consider necessary.
Preamble 1 - THE EXPORT-IMPORT BANK OF INDIA ACT,
1981PREAMBLE
[(1) The authorised capital of the Exim Bank shall be ten thousand
crores of rupees:
Provided that the Central Government may, by notification, increase the
said capital up to an amount that it may deem necessary from time to time.]
(2)? ?The issued capital of the Exim Bank shall be
wholly subscribed by the Central Government.
Section 5 - Management
(1)
The general
superintendence, direction and management of the affairs and business of the
Exim Bank shall vest in the Board, which may exercise all powers and do all acts
and things which may be exercised or done by the Exim Bank.
(2)
Save as
otherwise provided in the regulations made under this Act?
(a)
the
chairman, if he is a whole-time director or if he is holding offices both as
the chairman and the managing director, or
(b)
the managing
director, if the chairman is not a whole-time director, or, if the chairman
being a whole-time director, is absent, shall also have powers of general
superintendence, direction and management of the affairs and business of the Exim
Bank and may also exercise all powers and do all acts and things which may be
exercised or done by the Exim Bank.
(3)
Subject to
the provisions of this Act, the Board in discharging its functions shall act on
business principles with due regard to public interest.
(4)
In the
discharge of its functions under this Act, the Exim Bank shall be guided by
such directions in matters of policy involving public interest as the Central
Government may give to it in writing.
Section 6 - Constitution of Board
1)
The Board of
Directors of the Exim Bank shall consist of the following, namely:--
(a)
a chairman
and a managing director appointed by the Central Government:
Provided that the same person may
be appointed to function both as chairman and as managing director;
[2] [(aa) two whole-time directors appointed by the Central Government;]
(b)
one director
nominated by the Reserve Bank;
(c)
one director
nominated by the Development Bank;
(d)
one director
nominated by the Export Credit and Guarantee Corporation Limited, being a
Government Company within the meaning of Section 617 of the Companies Act, 1956;
(e)
not more
than twelve directors nominated by the Central Government of whom?
(i)
five
directors shall be officials of the Central Government;
(ii)
not more
than three directors shall be from the scheduled banks;
(iii)
not more
than four directors shall be persons who have special knowledge of, or
professional experience in, export or import or financing thereof.
2)
The chairman
and the managing director [3] [or the whole-time director] shall hold office for such term, not exceeding [4] [five years], as the Central Government may specify in this behalf and
any person so appointed shall be eligible for re-appointment.
3)
Notwithstanding
anything contained in sub-section (1), the Central Government shall have the
right to terminate the term of office of the chairman or the managing director,[5] [or the whole-time director] as the case may be, at any time before the
expiry of the term specified under sub-section (2), by giving him notice of not
less than three months in writing or three months' salary and allowances in
lieu thereof, and the chairman or the managing director,[6] [or the whole-time director] as the case may be, shall also have the
right to relinquish his office at anytime before the expiry of the term
specified under sub-section (2) by giving to the Central Government notice of
not less than three months in writing or three months' salary and allowances in
lieu thereof.
4)
The chairman
and the managing director 5[or the whole-time director] shall receive such salary and allowances as
may be determined by the Central Government.
5)
The Central
Government may, at any time, remove the chairman or the managing director,[7] [or the whole-time director] as the case may be, from office:
Provided that no person shall be
removed from his office under this sub-section unless he has been given an
opportunity of showing cause against his removal.
[8] [(6) Subject to the provisions contained in sub-section (7), any
director nominated under clause (b) or clause (c) or clause (d) or clause (e)
of sub-section (1) and not being an official of Government or not being a whole
time director or official of the Reserve Bank or the Development Bank or the
said Export Credit and Guarantee Corporation Limited or a scheduled bank, shall
hold office for such term, not exceeding three years, as the Central Government
or, as the case may be, the authority nominating him, may specify in this
behalf[9] [***], and shall be eligible for re-nomination.
Provided that no such director
shall hold office continuously for a period exceeding six years.]
(7)? ?Any [10] [***] director nominated under this section shall hold office during
the pleasure of the authority nominating him.
(8)? ?The Board 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.
(9) ?The
chairman or, if for any reason he is unable to attend a meeting of the Board,
the managing director [11] [or the whole-time director] or, in the event of both the chairman and
the managing director [12] [or the whole-time director] being unable to attend a meeting, any
other director nominated by the chairman in this behalf and in the absence of
such nomination any director elected by the directors present from among
themselves, shall preside at the meeting.
(10) All questions which come up before any meeting
of the Board shall be decided by a majority of votes of the directors present
and voting, and in the event of an equality of votes, the chairman, or in his
absence, the managing director,[13] [or the whole-time director] or in the absence of both the chairman and
the managing director, [14] [or the whole-time director] the person presiding, shall have and
exercise a second or casting vote.
(11) Save as otherwise provided in sub-section (10), every director of
the Board shall have one vote.
Section 7 - Committees
(1)
The Board
may constitute such Committees whether consisting wholly of directors or wholly
of other persons or partly of directors and partly of other persons for such
purpose or purposes as it may think fit.
(2)
Any
Committee constituted under sub-section (1) shall meet at such times and places
and shall observe such rules or procedure in regard to the transaction of
business at its meeting as may be prescribed.
Section 8 - Fees and allowances of directors and members of Committees
The directors and the members of a Committee shall
be paid such fees and allowances as may be prescribed for attending the
meetings of the Board or of any Committee constituted in pursuance of this Act
and for attending to any other work of the Exim Bank:
Provided that no fees shall be payable to the chairman, if he is
appointed as a whole-time chairman, or to the managing director [15] [or the whole-time director] or to any other
director or member who is an official of the Government, the Reserve Bank or
the Development Bank.
Section 9 - Disqualifications
No person shall be a director of the Board constituted under this Act,
who --
(a)
is, or at
any time has been, adjudged insolvent, or
(b)
is of
unsound mind and has been so declared by a competent court, or
(c)
is, or has
been, convicted of an offence which, in the opinion of the Central Government,
involves moral turpitude, or
(d)
has, in the
opinion of the Central Government, so abused his position as a director, as to
render his continuance on the Board detrimental to the interests of the General
public, o
(e)
has been,
for any reason, removed from the Board.
Section 10 - Business of Exim Bank
(1)
The Exim
Bank may grant in or outside India loans and advances by itself or in
participation with any bank or financial institution whether in or outside
India for the purposes of export or import and shall also function as the
principal financial institution for co-ordinating the working of institutions
engaged in financing of the export and import in such manner as it may deem
appropriate.
(2)
The Exim
Bank may also carry on and transact all or any of the following kinds of
businesses, namely:-
(a)
granting
loans and advances to a scheduled bank or any other bank or financial
institution notified in the Official Gazette by the Central Government in this
behalf by way of refinance of loans and advances granted by it for purpose of
export or import;
(b)
underwriting
the issue of stocks, bonds or debentures of any company engaged in export or
import;
(c)
issuing bid
bonds or guarantees in or outside India by itself or in participation with any
government, bank or financial institution in or outside India;
(d)
accepting,
collecting, discounting, rediscounting, purchasing, selling or negotiating in
or outside India, bills of exchange or promissory notes arising out of
transactions relating to export of import and granting of loans and advances in
or outside India against such bills or promissory notes;
(e)
granting,
opening, issuing, confirming or endorsing letters of credit and negotiating or;
collecting bills and other documents drawn thereunder.
(f)
undertaking
any transaction involving a combination of government to government and
commercial credit for purposes of export or import;
(g)
granting
lines of credit to the government of any foreign State or any financial institution
or person outside India for purposes of export or import;
(h)
granting
loans and advances outside India for any Indian joint venture;
(i)
granting
loans and advances to any person in India in connecting with his equity
contribution in any joint venture in any country outside India;
(j)
financing
export or import of machinery and equipment on lease basis;
(k)
subscribing
to, or investing in, or purchasing of stocks, shares, bonds or debentures of
any development bank or Export-Import Bank of any country outside India;
(l)
buying or
selling of, or entering into such other dealings in, foreign exchange, as may
be necessary for the discharge of its functions;
(m)
opening of
any account in any bank in or outside India or the making of any agency
arrangement with, or acting as an agent or correspondent of, any bank or other
institution in or outside India;
(n)
transferring,
for consideration, any instrument relating to loans and advances granted by it;
(o)
issuing
participation certificates;
(p)
subscribing
to, or investing in, or purchasing of stocks, bonds or debentures to the extent
necessary for the enforcement of a lien, pledge or other contractual right;
(q)
undertaking
and financing of research, surveys, techno-economic or any other study in
connection with the promotion and development of international trade;
(r)
providing
technical, administrative and financial assistance of any kind for export or
import;
(s)
planning,
promoting, developing and financing export-oriented concerns;
(t)
forming or
conducting subsidiaries for carrying out its functions;
(u)
acting as
agent of the Central Government, any State Government, the Reserve Bank, the
Development Bank or any other person as the Central Government may authorise;
(v)
collecting,
compiling and disseminating market and credit information in respect of
international trade;
(w)
doing any
other kind of business which the Central Government may authorise;
(x)
generally
doing such other acts and things as may be incidental to, or consequential
upon, the exercise of its powers or the discharge of its duties under this Act
or any other law for the time being in force, including sale or transfer of any
of its assets.
(3)
The Exim
Bank may receive in consideration of any of the services mentioned in
sub-sections (1) and (2) such commission, brokerage, interest, remuneration of
fees as may be agreed upon.
(4)
The Exim
Bank shall not grant any loan or advance or other financial accommodation on
the security of its own bonds or debentures.
Section 11 - Loans by Central Government
The Central Government may, after due appropriation made by Parliament
by law in this behalf advance to the Exim Bank
(a)
a loan of
twenty crores of rupees at a rate of interest of five and a quarter per cent,
per annum repayable in fifteen equal annual installments, commencing on the
expiry of a period of fifteen years from the date of receipt of the loan; and
(b)
such further
sums of money by way of loan on such terms and conditions as may be agreed
upon:
Provided that the Central Government may on a request being made to it
by the Exim Bank, increase the number of installments or alter the amount of
any installment or vary the date on which any installment is payable under
clause (a).
Section 12 - Borrowings and acceptance of deposits by Exim Bank
(1)
The Exim
Bank may, for the purposes of carrying out its functions under this Act,--
(a)
issue and
sell bonds and debentures with or without the guarantee of the Central
Government;
(b)
borrow money
from the Reserve Bank
(i)
repayable on
demand or on the expiry of fixed periods not exceeding ninety days from the
date on which the money is so borrowed against the security of stocks, funds
and securities (other than immovable property) in which a trustee is authorized
to invest trust money by any law for the time being in force in India;
(ii)
against
bills of exchange or promissory notes arising out of bona fide commercial or
trade transactions and bearing two or more good signatures and maturing within
five years from the date of the borrowing;
(iii)
out of the
National Industrial Credit (Long Term Operations) Fund established under
section 46C of the Reserve Bank of India Act, 1934 for any of the purposes
specified in that section;
(c)
borrow money
from such other authority, organization or institution in India as may
generally or specially be approved by the Central Government;
(d)
accept
deposits repayable after the expiry of a period which shall not be less than
twelve months from the date of the making of the deposit on such terms as may
generally or specially be approved by the Reserve Bank.
(2)
The Central
Government may, on a request being made to it by the Exim Bank, guarantee the
bonds and debentures issued by that Bank as to the repayment of principal and
the payment of interest at such rate as may be fixed by that Government.
Section 13 - Loans in foreign currency
Notwithstanding anything contained in the Foreign Exchange Regulation
Act, 1973 or in any other law for the time being in force relating to foreign
exchange, the Exim Bank may, for the purpose of granting loans and advances
under this Act, borrow, with the previous consent of the Central Government,
foreign currency from any foreign State or from any bank or financial
institution in any foreign country or otherwise.
Section 14 - Grants, donations, etc., to Exim Bank
The Exim Bank may receive gifts, grants, donations or benefactions from
Government or any other source in or outside India.
Section 15 - Export Development Fund
With effect from such date [16]as the Central Government may, by notification,
appoint, the Exim Bank shall establish a special fund to be called the Export
Development Fund.
Section 16 - Credits to Export Development Fund
To the Export Development Fund shall be credited-
(a)
all amounts
received for the purposes of that Fund by way of loans, gifts, grants,
donations or benefactions from Government or any other source in or outside
India;
(b)
repayments
or recoveries in respect of loans, advances or other facilities granted from
the Fund;
(c)
income or
profits from investments made from the Fund; and
(d)
income
accruing or arising to the Fund by way of interest or otherwise, on account of
the application of the Fund in accordance with the provisions of section 17.
Section 17 - Utilisation of Export Development Fund
(1)
Where the
Exim Bank considers it necessary or desirable so to do, it may, subject to the
provisions of sub-sections (2) and (3), disburse or spend from the Export
Development Fund any amount an account or in consequence of the grant of any
loan or advance, or on account or in consequence of entering into any
arrangement under sub-section (1) or clause (b) or clause (c) or clause (d) or
clause (q) or clause (r) or clause (s) or clause (w) or clause (x) of sub-s.
(2) of section 10:
Provided that before granting any such loan or advance or entering into
any such arrangement, the Exim Bank shall obtain the prior approval of the
Central Government.
(2)
Before
seeking the approval of the Central Government under sub-section (1), the Exim
Bank shall satisfy itself that banking or other financial institutions or other
agencies are not likely to grant such loan or advance, or to enter into any
such arrangement in the ordinary course of business.
(3)
The Central
Government shall, before giving its approval, satisfy itself that such loan,
advance or arrangement is necessary as a matter of priority in the interests of
the international trade of the country.
(4)
For the
removal of doubts, it is hereby declared that nothing contained in this section
shall be deemed to preclude the Exim Bank from granting any loan or advance or
from entering into any arrangement under sub-s. (1) or clause (b) or clause (c)
or clause (d) or clause (q) or clause (r) or cl. (s) or clause (w) or clause
(x) of sub-section (2) of section 10 without the approval of the Central
Government, if no amount in respect thereof is to be disbursed or spent from
the Export Development Fund.
Section 18 - Debits to Export Development Fund
(1)
To the
Export Development Fund shall be debited ?
(a)
such amounts
as may from time to time be disbursed or spent under sub-section (1) of section
17;
(b)
such amounts
as may be required for discharging the liabilities in respect of loans received
for the purposes of that Fund;
(c)
any loss
arising on account of investment made out of that Fund; and
(d)
such
expenditure arising out of, or in connection with, the administration and
application of the Fund as may be determined by the Board.
(2)
No amount
shall be debited to the Export Development Fund except as provided for in
sub-section (1).
Section 19 - Accounts and audit of Export Development Fund
(1)
The
balance-sheet and accounts of the Export Development Fund shall be prepared in
such form and manner as may be prescribed.
(2)
The Board
shall cause the books and accounts of the Export Development Fund to be closed
and balanced as on the 31st day of December [17] [or such other date [18]in each year as the Central Government may, by
notification in the official gazette, specify]
[19] [Provided that with a view to facilitating the
transition from one period of accounting to another period of accounting under
this sub-section, the Central Government may, by order published in the
official gazette, make such provisions as it considers necessary or expedient
for the closing and balancing of, or for other matters relating to, the books
or accounts in respect of the concerned years.]
(3)
The Export
Development Fund shall be audited by one or more auditors appointed by the
Central Government under section 24 who shall make a separate report thereon.
(4)
The
provisions of sub-sections (2), (3), (4) and (6) of section 24 shall, so far as
may be, apply in relation to the audit of the Export Development Fund.
(5)
The Exim
Bank shall furnish to the Central Government, within four months from the date
on which the accounts of the Export Development Fund are closed and balanced, a
copy of the balance-sheet and accounts together with a copy of the auditors'
report and a report on the operation of the Fund during the relevant year and
the Central Government shall, as soon as may be after they are received by it,
cause the same to be laid before each House of Parliament.
Section 20 - Liquidation of Export Development Fund
The Export Development Fund shall not be closed or wound up save by
order of the Central Government and in such manner as that Government may
direct.
Section 21 - General Fund
All receipts of the Exim Bank other than those which are to be credited
to the Export Development Fund under this Act shall be credited to a Fund to be
called the General Fund and all payments by the Exim Bank, other than those
which are to be debited to the Export Development Fund, shall be made out of
the General Fund.
Section 22 - Preparation of accounts and balance-sheet
(1)
The
balance-sheet and accounts of the Exim Bank shall be prepared in such form and
manner as may be prescribed.
(2)
The Board
shall cause the books and accounts of the Exim Bank to be closed and balanced
as on the 31st day of December [20] [or such other date [21]in each year as the Central Government may, by
notification in the official Gazette, specify.]
[22] [Provided that with a view to facilitating the
transition from one period of accounting to another period of accounting under
this sub-section, the Central Government may, by order published in the
official Gazette, make such provisions as it considers necessary or expedient
for the closing and balancing of, or for other matters relating, to the books
or accounts in respect of the concerned years.]
Section 23 - Disposal of Profits accruing to General Fund
(1)
The Exim
Bank may establish a Reserve Fund to which may be transferred such sums as that
Bank may deem fit out of the annual profits accruing to the General Fund.
(2)
After making
provision for bad and doubtful debts, depreciation of assets and for all other
matters for which provision is necessary or expedient or which is usually
provided for by bankers and for the Reserve Fund referred to in sub-section
(1), the Exim Bank shall transfer the balance of the net profits to the Central
Government.
Section 24 - Audit
(1)
The accounts
of the Exim Bank shall be audited by auditors duly qualified to act as auditors
under sub-section (1) of section 266 of the Companies Act, 1956,
who shall be appointed by the Central Government for such term and on such remuneration
as the Central Government may fix.
(2)
The auditors
shall be supplied with a copy of he annual balance-sheet of the Exim Bank and
it shall be their duty to examine it together with the accounts and vouchers
relating thereto and they shall have a list delivered to them of all books kept
by the Exim Bank and shall at all reasonable times have access to the books
accounts, vouchers and other documents of the Exim Bank.
(3)
The auditors
may, in relation to such accounts, examine any director or any officer or other
employee of the Exim Bank and shall be entitled to require from the Board or
officer or other employee of the Exim Bank such information and explanation as
they may think necessary for the performance of their duties.
(4)
The auditors
shall make a report to the Exim Bank upon the annual balance-sheet and accounts
examined by them and in every such report they shall state whether in their
opinion the balance-sheet is a full and fair balance-sheet containing all
necessary particulars and properly drawn up so as to exhibit a true and fair
view of the state of affairs of the Exim Bank and in case they had called for
any explanation or information from the Board or any officer or other employee
of the Exim Bank whether it has been given and whether it is satisfactory.
(5)
The Exim
Bank shall furnish to the Central Government within four months from the date
on which its accounts are closed and balanced, a copy of its balance-sheet and
accounts together with a copy of the auditor's report of the working of the
Exim Bank during the relevant year, and the Central Government shall, as soon
as may be, after they are received by it, cause the same to be laid before each
House of Parliament.
(6)
Without
prejudice to anything contained in the preceding sub-sections, the Central
Government may, at any time, appoint the Comptroller and Auditor-General of
India to examine and report upon the accounts of the Exim Bank and any
expenditure incurred by him in connection with such examination and report
shall be payable by the Exim Bank to the Comptroller and Auditor-General of
India.
Section 25 - Saving
Save as otherwise provided in sub-section (4) of section 19, nothing
contained in this Chapter shall apply to the Export Development Fund.
Section 26 - Transfer of part of business of Development Bank
(1)
On such date
as that Central Government may, by notification, appoint, all business,
property, assets and liabilities, rights, interests, privileges and obligations
of whatever nature of the Development Bank in so far as they relate to the
export financing functions of that Bank shall stand transferred to, and vest in,
the Exim Bank.
(2)
For the
transfer to, and vesting in, the Exim Bank under sub-s. (1), the Exim Bank
shall pay to the Development Bank such amount in such manner and in such number
of installments as may be determined by the Central Government.
(3)
All contracts,
deeds, agreements, powers-of-attorney, grants of legal representation and other
instruments of whatever nature of the Development Bank which relate to the
export financing functions of that Bank and which are subsisting or having
effect immediately before the date referred to in sub-section (1) and to which
the said Bank is a party or which are in favour of that Bank shall,-
(a)
if they
relate exclusively to the export financing function of that Bank, be of full
force and effect against or in favour of the Exim Bank, as the case may be, and
may be enforced and acted upon as fully and effectively as if instead of the
Development Bank the Exim Bank had been a party thereto or as if they had been
issued in favour of the Exim Bank; and
(b)
if they
relate not only to the export financing functions of the Development Bank but
also to any of the other functions of that Bank, be of full force and effect
against or in favour of both the Development Bank and the Exim Bank and may be
enforced or acted upon as fully and effectively as if in addition to the
Development Bank the Exim Bank had also been a party thereto or as if they had
been issued in favour of the Development Bank and also the Exim Bank.
(4)
If, on the
date referred to in sub-section (1), any suit, appeal or other legal proceeding
of whatever nature relating to the export financing functions of the
Development Bank is pending, the same shall not abate, be discontinued or be in
any way prejudicially affected by reason of the transfer to the Exim Bank of
the business of the Development Bank or of anything contained in this Act, but
the suit, appeal or other proceedings may,-
(a)
where it
relates exclusively to the export financing functions of the Development Bank,
be continued, prosecuted and enforced by or against the Exim Bank; and
(b)
where it
relates not only to the export financing functions of the Development Bank but
also to any of the other functions of that Bank be continued, prosecuted and
enforced by or against the Development Bank and the Exim Bank or, if the
Central Government by special order in writing so directs, by or against such
one of the said two Banks, as may be specified in such order.
(5)
If any
question arises as to whether any contract, deed, bond, agreement, powers of
attorney, grant of legal representation or other instrument referred to in
sub-section (3) or any suit, appeal or other legal proceeding referred to in
sub-section (4) relates or relates exclusively to the export financing
functions of the Development Bank, it shall be referred to the Central
Government for decision and the decision of the Central Government thereon
shall be final.
(6)
The
provisions of this section shall have effect not withstanding anything
contained in the Industrial Development Bank of India Act, 1964 or any other law
or any instrument having force by virtue of the said Act or other law.
Section 27 - Staff of Exim Bank.-
(1)
The Exim
Bank may appoint such number of officers and other employees as it considers
necessary or desirable for the efficient performance of its functions and
determine the terms and conditions of their appointment and service.
(2)
Without
prejudice to the provisions of sub-section (1), it shall be lawful for the Exim
Bank to utilize, and for the Development Bank to make available the services
of, such staff of the Development Bank having experience relating to export
financing functions on such terms and conditions as may be agreed upon between
the Exim Bank and the Development Bank.
(3)
The duties
and conduct, and the terms and conditions of service and the establishment and
maintenance of a Provident Fund or any other Fund for the benefit of the
officers and other employees of the Exim Bank shall be such as may be
prescribed.
Section 28 - Delegation of powers
The Board may, be general or special order, delegate to any director of
any officer or other employee of the Exim Bank, subject to such conditions and
limitations, if any, as may be specified in the order, such of its powers and
functions under this Act as it may deem necessary.
Section 29 - Returns
The Exim Bank shall furnish from time to time, to the Central Government
such returns as the Central Government may require.
Section 30 - Obligation as to fidelity and secrecy
(1)
The Exim
Bank shall not, except as otherwise required by this Act or any other law,
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 Exim Bank to
divulge such information.
(2)
The Exim
Bank may, for the purpose of efficient discharge of its functions under this
Act collect from, or furnish to, the Central Government, the Development Bank
or any scheduled bank or such other financial institution, as may be notified
in the Official Gazette by the Central Government in this behalf, credit
information or other information as it may consider useful for the purpose, in
such manner and at such times, as it may think fit.
Explanation.-For the purpose of this
sub-section, the expression "credit information" shall have the same
meaning as in clause (c) of section 45A of the Reserve Bank of
India Act, 1934, subject to the modification that "banking company"
referred to therein shall mean the Development Bank, any scheduled bank or
other financial institution as aforesaid.
Every director, member of a
committee, auditor or officer or other employee of the Exim Bank or of the
Development Bank whose services are utilized by the Exim Bank under the
provisions of this Act, shall, before entering upon his duties, make a
declaration of fidelity and secrecy in the form set out in the First Schedule.
[23]"(4) Nothing contained in
this section shall apply to the credit information disclosed under the Credit
Information Companies (Regulation) Act, 2005.".
Section 31 - Defects in appointments not to invalidate acts, etc
(1)
No act or
proceeding of the Board or of any committee of the Exim Bank shall be questioned
on the ground merely of the existence of any vacancy in, or defect in the
constitution of, the Board or the committee, as the case may be.
(2)
No act done
by any person acting in good faith as a director shall be deemed to be invalid
merely on the ground that he was disqualified to be a director or that there
was any other defect in his appointment.
Section 32 - Arrangement with Exim Bank on appointment of directors to prevail
(1)
Where any
arrangement entered into by the Exim Bank with a company provides for the
appointment by the Exim Bank of one or more directors of such company, such
provisions and any appointment of directors made in pursuance thereof shall be
valid and effective notwithstanding anything to the contrary contained in the
Companies Act, 1956, or in any other law for the time being in force or in the
memorandum, articles of association or any other instrument relating to the
company and any provision regarding share qualification, age limit, number of
directorships, removal from office of directors and such like conditions
contained in any such law or instrument aforesaid, shall not apply to any
director appointed by the Exim Bank in pursuance of the arrangement as
aforesaid.
(2)
Any director
appointed as aforesaid shall-
(a)
hold office during
the pleasure of the Exim Bank and may be removed or substituted by any person
by order in writing of the Exim Bank;
(b)
not incur
any obligation or liability by reason only of his being a director or for
anything done or omitted to be done in good faith in the discharge of his
duties as a director or anything in relation thereto;
(c)
not be
liable to retirement by rotation and shall not be taken into account for
computing the number of directors liable to such retirement.
Section 33 - Indemnity of directors
(1)
Every
director shall be indemnified by the Exim Bank against all losses and expenses
incurred by him, in, or in relation to, the discharge of his duties, except
such as are caused by his own willful act or default.
(2)
A director
shall not be responsible for any other director or for any officer or other
employees of the Exim Bank or for any loss or expenses resulting to the Exim
Bank from the insufficiency or deficiency of the value of, or title to, any
property or security acquired or taken on behalf of the Exim Bank or the
insolvency or wrongful act of any debtor or any person under obligation to the
Exim Bank or anything done in good faith in the execution of the duties of his
office or in relation thereto.
Section 34 - Protection of action taken in good faith
No suit or other legal proceedings shall lie against the Exim Bank or
any director or any officer or other employee of the Exim Bank or any other
person authorized by the Exim Bank to discharge any functions under this Act
for any loss or damage caused or likely to be caused by anything which is in
good faith done or attended to be done in pursuance of this Act or any other
law or provision having the force of law.
Section 35 - Act 18 of 1891 to apply in relation to Exim Bank
The Bankers' Books Evidence Act, 1891 shall apply in relation to the
Exim Bank as if it were a Bank as defined in section 2 of that Act.
Section 36 - Section 34A and section 36AD only of Act 10 of 1949 to apply to Exim Bank
Nothing contained in the Banking Regulation Act, 1949, except section 34A and section 36AD thereof, shall apply to the Exim Bank.
Section 37 - Act 43 of 1961 and Act 7 of 1964 not to apply to Exim Bank
Notwithstanding nothing contained in the Income-tax Act, 1961, or the
Companies (Profits) Surtax Act, 1964 many other enactment for the time being in
force relating to tax on income, profits or gains the Exim Bank shall not be
liable to pay income-tax, surtax or any other tax in respect of--
(a)
any income,
profits or gains accruing to the Export Development Fund or any amount received
to the credit of that Fund; and
(b)
any income,
profits or gains derived, or any amount received, by the Exim Bank.
Section 38 - Liquidation of Exim Bank
No provision of any law relating to the winding up of companies or
corporations shall apply to the Exim Bank and the Exim Bank shall not be placed
in liquidation save by an order of the Central Government and in such manner as
it may direct.
Section 39 - Power to make regulations
(1)
The board
may, with the previous approval of the Central Government, [24] [by Notification in the Official
Gazette,] make regulations not inconsistent with this Act to provide for all
matters for which provision is necessary or expedient for the purpose of giving
effect to the provisions of this Act.
(2)
In
particular and without prejudice to the generality of the foregoing power, such
regulations may provide for-
(a)
the times
and places of the meetings of the Board or of any Committee constituted under
this Act and the procedure to be followed at such meetings including the quorum
necessary for the transaction of business;
(b)
the fees and
allowances that may be paid to the directors and the members of a Committee;
(c)
the form and
manner in which the balance-sheets and the account of the Export Development
Fund and the Exim Bank shall be prepared;
(d)
the duties
and conduct and the terms and conditions of service of the officers and other
employees of the Exim Bank;
(e)
the
establishment and maintenance of Provident Fund or any other fund for the
benefit of the officers and other employees of the Exim Bank; and
(f)
any other
matter which is to be, or may be, prescribed.
(3)
Every
regulation made by the Board 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 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.
Section 40 - Amendment of certain enactments
[Repealed by
Repealing and Amending Act (19 of 1988), S. 2, 1st Sch. (31-3-1988).]
Section 41 - Power to remove difficulty
If
any difficulty arises in giving effect to the provisions of this Act, the
Central Government may, by order, do anything, not inconsistent with such
provisions, for the purpose of removing the difficulty:
Provided
that no such order shall be made after the expiration of three years from the
date on which this Act receives the assent of the President.
Schedule - FIRST SCHEDULE
THE FIRST SCHEDULE
[See section 30(3)]
Declaration Of Fidelity And Secrecy
I
____________ do hereby declare that I will faithfully, truly and to the best of
my skill and ability execute and perform the duties required of me as director,
member of ____________ committee, auditor, officer or other employee (as the
case may be) of the Export-Import Bank of India and which properly relate to
the officer or position held by me in or in relation to the said Exim Bank.
I
further declare that I will not communicate or allow to be communicated to any
person not legally entitled thereto any information relating to the affairs of
the Export-Import Bank of India or to the affairs of any person having any
dealing with the said Exim Bank, nor will I allow any such person to inspect or
have access to any books or documents belonging to or in the possession of the
said Exim Bank and relating to the business of the said Exim Bank or the
business of any person having any dealing with the said Exim Bank.
(Signature)
Signed
before me.
Schedule - SECOND SCHEDULE
[25] [THE SECOND SCHEDULE
(See section 40)]
Amending Act 1 - BANKING COMPANIES
(ACQUISITION AND TRANSFER OF UNDERTAKINGS) AND FINANCIAL INSTITUTIONS LAWS
(AMENDMENT) ACT, 2006
THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF
UNDERTAKINGS) AND FINANCIAL INSTITUTIONS LAWS (AMENDMENT) ACT, 2006
[Act No. 45 OF 2006]
[25th September, 2006.]
PREAMBLE
An
Act further to amend the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980, the State Bank of India Act, 1955, the State Bank of
India (Subsidiary Banks) Act, 1959, the Deposit Insurance and Credit Guarantee
Corporation Act, 1961, the Export-Import Bank of India Act, 1981 and the
National Housing Bank Act, 1987.
BE it enacted by Parliament in the Fifty-seventh
Year of the Republic of India as follows:--
CHAPTER I
PRELIMINARY
1. Short title and Commencement.--
(1) This Act may be called the Banking Companies
(Acquisition and Transfer of Undertakings) and Financial Institutions Laws
(Amendment) Act, 2006.
(2) It shall come into force on such date as the
Central Government may, by notification in the Official Gazette, appoint:
Provided
that different dates may be appointed for different provisions of this Act and
any reference in such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
CHAPTER II
AMENDMENTS TO THE BANKING COMPANIES (ACQUISITION
AND TRANSFER OF UNDERTAKINGS) ACT, 1970
2. Amendment of section 3.--
In section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970(5 of
1970) (hereafter in this Chapter referred to as the Bank Nationalisation
Act),--
(a) in sub-section (2B), for clause (c), the following
shall be substituted, namely:--
"(c)
such amounts as the Board of Directors of the corresponding new bank may, after
consultation with the Reserve Bank and with the previous sanction of the
Central Government, raise whether by public issue or preferential allotment or
private placement, of equity shares or preference shares in accordance with the
procedure as may be prescribed, so, however, that the Central Government shall,
at all times hold not less than fifty-one per cent. of the paid-up capital
consisting of equity shares of each corresponding new bank:
Provided that the issue of preference shares shall
be in accordance with the guidelines framed by the Reserve Bank specifying the
class of preference shares, the extent of issue of each class of such
preference shares (whether perpetual or irredeemable or redeemable) and the
terms and conditions subject to which, each class of preference shares may be
issued.";
(b)
in
sub-sections (2BB) and (2BBA), for the words "raised by public
issue", the words "raised by public issue or preferential allotment
or private placement" shall be substituted;
(c)
in
sub-section (2C), for the words "raised by public issue", the words
"raised from public by public issue or preferential allotment or private
placement" shall be substituted;
(d)
in
sub-section (2E), the following provisos shall be inserted, namely:--
"Provided that the shareholder holding any
preference share capital in the corresponding new bank shall, in respect of
such capital, have a right to vote only on resolutions placed before such
corresponding new bank which directly affects 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 one per cent.
of the total voting rights of all the shareholders holding preference share
capital only.".
3. Amendment of section 9.--
In section 9 of
the Bank Nationalisation Act,--
(a) in sub-section (2), after clause (c), the following
clause shall be inserted, namely:--
"(ca)
the manner in which the excess number of directors shall retire under second
proviso to clause (i) of sub-section (3);";
(b) in sub-section (3),--
a)
in
clause (a), for the words "not more than two whole-time directors",
the words "not more than four whole-time directors" shall be
substituted;
b)
?for clause (c), the following clause shall be
substituted, namely:--
"(c)
one director, possessing necessary expertise and experience in matters relating
to regulation or supervision of commercial banks, to be nominated by the
Central Government on the recommendation of the Reserve Bank;";
(c)
clause
(d) shall be omitted;
(d) for clause (i), the following shall be substituted,
namely:--
"(i)
where the capital issued under clause (c) of sub-section (2B) of section 3 is
--
(I) not more than sixteen per cent. of the total
paid-up capital, one director;
(II) more than sixteen per cent. but not more than
thirty-two per cent. of the total paid-up capital, two directors;
(III) more than thirty-two per cent. of the total paid-up
capital, three directors,to be elected by the shareholders, other than the
Central Government, from amongst themselves:
Provided that on the assumption of charge after
election of any such director under this clause, equal number of directors
nominated under clause (h) shall retire in such manner as may be specified in
the scheme:
Provided further that in case the number of directors
elected, on or before the commencement of the Banking Companies (Acquisition
and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act,
2006, in a corresponding new bank exceed the number of directors specified in
sub-clause (I) or sub-clause (II) or sub-clause (III), as the case may be, such
excess number of directors elected before such commencement shall retire in
such manner as may be specified in the scheme and such directors shall not be
entitled to claim any compensation for the premature retirement of their term
of office.";
(e) after sub-section (3A), the following sub-sections
shall be inserted, namely:--
"(3AA)
Without prejudice to the provisions of sub-section (3A) and notwithstanding
anything to the contrary contained in this Act or in any other law for the time
being in force, no person shall be eligible to be elected as director under
clause (i) of sub-section (3) unless he is a person having fit and proper
status based upon track record, integrity and such other criteria as the
Reserve Bank may notify from time to time in this regard.
(3AB)
The Reserve Bank may also specify in the notification issued under sub-section
(3AA), the authority to determine the fit and proper status, the manner of such
determination, the procedure to be followed for such determination and such
other matters as may be considered necessary or incidental thereto;";
(f) in sub-section (3B), for the word, brackets, figure
and letter "sub-section (3A)" at both the places where they occur,
the words, brackets, figures and letters "sub-sections (3A) and
(3AA)" shall be substituted.
4. Insertion of new section 9A.--
After section 9 of
the Bank Nationalisation Act, the following section shall be inserted,
namely:--
"9A. Power of Reserve Bank to appoint
additional director.?
(1) If the Reserve Bank is of the opinion that in the
interest of banking policy or in the public interest or in the interests of the
corresponding new bank or its depositors, it is necessary so to do, it may,
from time to time, by order in writing, appoint, with effect from such date as
may be specified in the order, one or more persons to hold office as additional
directors of the corresponding new bank.
(2) Any person appointed as an additional director in
pursuance of this section?
(a) shall hold office during the pleasure of the
Reserve Bank and subject thereto for a period not exceeding three years or such
further periods not exceeding three years at a time as the Reserve Bank may
specify;
(b) shall not incur any obligation or liability by
reason only of his being a director or for anything done or omitted to be done
in good faith in the execution of the duties of his office or in relation
thereto; and
(c) shall not be required to hold qualification shares
in the corresponding new bank.
(3) For the purpose of reckoning any proportion of the
total number of directors of the corresponding new bank, any additional
director appointed under this section shall not be taken into account.".
5. Amendment of section 10A.--
In section 10A of
the Bank Nationalisation Act,--
(a) in sub-section (2), for the words "shall be
entitled to discuss", the words "shall be entitled to discuss,
approve and adopt" shall be substituted;
(b) after sub-section (2), the following sub-section
shall be inserted, namely:--
"(3)
Nothing contained in this section shall apply during the period for which the
Board of Directors of a corresponding new bank had been superseded under
sub-section (1) of section 18A:
Provided
that the Administrator may, if he considers it appropriate in the interest of
the corresponding new bank whose Board of Directors had been superseded, call
annual general meeting in accordance with the provisions of this
section.".
6. Insertion of new section 10B.--
After section 10A of
the Bank Nationalisation Act, the following section shall be inserted,
namely:--
'10B. Transfer of unpaid or unclaimed dividend to
Unpaid Dividend Account.?
(1) Where, after the commencement of the Banking
Companies (Acquisition and Transfer of Undertakings) and Financial Institutions
Laws (Amendment) Act, 2006, a dividend has been declared by a corresponding new
bank but has not been paid or claimed within thirty days from the date of
declaration, to, or by, any shareholder entitled to the payment of the
dividend, the corresponding new bank shall, within seven days from the date of
the expiry of such period of thirty days, transfer the total amount of dividend
which remains unpaid or unclaimed within the said period of thirty days, to a
special account to be called "Unpaid Dividend Account of ... (the name of
the corresponding new bank).".
Explanation.--In
this sub-section, the expression "dividend which remains unpaid"
means any dividend the warrant in respect thereof has not been encashed or
which has otherwise not been paid or claimed.
(2) Where the whole or any part of any dividend,
declared by a corresponding new bank before the commencement of the Banking
Companies (Acquisition and Transfer of Undertakings) and Financial Institutions
Laws (Amendment) Act, 2006(1 of 1956), remains unpaid at such commencement, the
corresponding new bank shall, within a period of six months from such
commencement, transfer such unpaid amount to the account referred to in
sub-section (1).
(3)
Any
money transferred to the Unpaid Dividend Account of a corresponding new bank in
pursuance of this section which remains unpaid or unclaimed for a period of
seven years from the date of such transfer, shall be transferred by the
corresponding new bank to the Investor Education and Protection Fund
established under sub-section (1) of section 205C of the Companies Act, 1956.
(4) The money transferred under sub-section (3) to the
Investor Education and Protection Fund shall be utilised for the purposes and
in the manner specified in section
205C of the
Companies Act, 1956.'.
7. Insertion of new section 18A.--
After section 18 of
the Bank Nationalisation Act, the following section shall be inserted,
namely:--
"18A. Super session of Board in certain cases.?
(1) Where the Central Government, on the recommendation
of the Reserve Bank, is satisfied that in the public interest or for preventing
the affairs of any corresponding new bank being conducted in a manner
detrimental to the interest of the depositors or the corresponding new bank or
for securing the proper management of any corresponding new bank, it is
necessary so to do, the Central Government may, for reasons to be recorded in
writing, by order, supersede the Board of Directors of such corresponding new
bank for a period not exceeding six months as may be specified in the order:
Provided
that the period of super session of the Board of Directors may be extended from
time to time, so, however, that the total period shall not exceed twelve
months.
(2)
The
Central Government may, on super session of the Board of Directors of the
corresponding new bank under sub-section (1), appoint, in consultation with the
Reserve Bank, for such period as it may determine, an Administrator (not being
an officer of the Central Government or a State Government) who has experience
in law, finance, banking, economics or accountancy.
(3)
The
Central Government may issue such directions to the Administrator as it may
deem appropriate and the Administrator shall be bound to follow such
directions.
(4) Upon making the order of super session of the Board
of Directors of the corresponding new bank, notwithstanding anything contained
in this Act,--
(a) the chairman, managing directors and other
directors shall, as from the date of super session, vacate their offices as
such;
(b) all the powers, functions and duties which may, by
or under the provisions of this Act or any other law for the time being in
force, be exercised and discharged by or on behalf of the Board of Directors of
such corresponding new bank, or by a resolution passed in general meeting of
such corresponding new bank, shall, until the Board of Directors of such
corresponding new bank is reconstituted, be exercised and discharged by the
Administrator appointed by the Central Government under sub-section (2):
Provided
that the power exercised by the Administrator shall be valid notwithstanding
that such power is exercisable by a resolution passed in the general meeting of
the corresponding new bank.
(5)
The
Central Government may constitute, in consultation with the Reserve Bank, a
committee of three or more persons who have experience in law, finance,
banking, economics or accountancy to assist the Administrator in the discharge
of his duties.
(6)
The
committee shall meet at such times and places and observe such rules of
procedure as may be specified by the Central Government.
(7)
The
salary and allowances payable to the Administrator and the members of the
committee constituted under sub-section (5) by the Central Government shall be
such as may be specified by the Central Government and be payable by the
concerned corresponding new bank.
(8)
On
and before the expiration of two months before expiry of the period of super
session of the Board of Directors as specified in the order issued under
subsection (1), the Administrator of the corresponding new bank, shall call the
general meeting of the corresponding new bank to elect new directors and
reconstitute its Board of Directors.
(9)
Notwithstanding
anything contained in any other law or in any contract, the memorandum or articles
of association, no person shall be entitled to claim any compensation for the
loss or termination of his office.
(10) The Administrator appointed under sub-section (2)
shall vacate office immediately after the Board of Directors of the
corresponding new bank has been reconstituted.".
CHAPTER III
AMENDMENTS TO THE BANKING COMPANIES (ACQUISITION
AND TRANSFER OF UNDERTAKINGS) ACT, 1980
8. Amendment of section 3.--
In section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980(40
of 1980) [hereafter in this Chapter referred to as the Bank (Second)
Nationalisation Act],--
(a) in sub-section (2B), for clause (c), the following
shall be substituted, namely;--
"(c) such amounts as the Board of Directors of
the corresponding new bank may, after consultation with the Reserve Bank and
with the previous sanction of the Central Government, raise whether by public
issue or preferential allotment or private placement, of equity shares or
preference shares in accordance with the procedure as may be prescribed, so,
however, that the Central Government shall, at all times hold not less than
fifty-one per cent. of the paid-up capital consisting of equity shares of each
corresponding new bank:
Provided
that the issue of preference shares shall be in accordance with the guidelines
framed by the Reserve Bank specifying the class of preference shares, the
extent of issue of each class of such preference shares (whether perpetual or
irredeemable or redeemable) and the terms and conditions subject to which, each
class of preference shares may be issued.";
(b)
in
sub-sections (2BB) and (2BBA), for the words "raised by public
issue", the words "raised by public issue or preferential allotment
or private placement" shall be substituted;
(c)
in
sub-section (2C), for the words "raised by public issue", the words
"raised from public by public issue or preferential allotment or private
placement" shall be substituted;
(d) in sub-section (2E), the following provisos shall
be inserted, namely:--
"Provided
that the shareholder holding any preference share capital in the corresponding
new bank shall, in respect of such capital, have a right to vote only on
resolutions placed before such corresponding new bank which directly affects
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 one per cent.
of the total voting rights of all the shareholders holding preference share
capital only.".
9. Amendment of section 9.--
In section 9 of
the Bank (Second) Nationalisation Act,--
(a) in sub-section (2), after clause (c), the following
clause shall be inserted, namely:--
"(ca)
the manner in which the excess number of directors shall retire under the
second proviso to clause (i) of sub-section (3);";
(b)
in
sub-section (3),--
(i) in clause (a), for the words "not more than
two whole-time directors", the words "not more than four whole-time
directors" shall be substituted;
(ii) for clause (c), the following clause shall be
substituted, namely:--
"(c)
one director, possessing necessary expertise arid experience in matters
relating to regulation or supervision of commercial banks, to be nominated by
the Central Government on the recommendation of the Reserve Bank;";
(iii)
clause
(d) shall be omitted;
(iv) for clause (i), the following shall be substituted,
namely:--
"(i)
where the capital issued under clause (c) of sub-section (2B) of section 3 is
--
(I) not more than sixteen per cent. of the total
paid-up capital, one director;
(II) more than sixteen per cent. but not more than
thirty-two per cent. of the total paid-up capital, two directors;
(III) more than thirty-two per cent. of the total paid-up
capital, three directors,to be elected by the shareholders, other than the
Central Government, from amongst themselves:
Provided
that on the assumption of charge after election of any such director under this
clause, equal number of directors nominated under clause (h) shall retire in
such manner as may be specified in the scheme:
Provided
further that in case the number of directors elected, on or before the
commencement of the Banking Companies (Acquisition and Transfer of
Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, in a
corresponding new bank exceed the number of directors specified in sub-clause (I)
or sub-clause (II) or sub-clause (III), as the case may be, such excess number
of directors elected before such commencement shall retire in such manner as
may be specified in the scheme and such directors shall not be entitled to
claim any compensation for the premature retirement of their term of
office.";
(c) after sub-section (3A), the following sub-sections
shall be inserted, namely:--
"(3AA)
Without prejudice to the provisions of sub-section (3A) and notwithstanding
anything to the contrary contained in this Act or in any other law for the time
being in force, no person shall be eligible to be elected as director under
clause (i) of sub-section (3) unless he is a person having fit and proper
status based upon track record, integrity and such other criteria as the
Reserve Bank may notify from time to time in this regard.
(3AB)
The Reserve bank may also specify in the notification issued under sub-section
(3AA), the authority to determine the fit and proper status, the manner of such
determination, the procedure to be followed for such determination and such
other matters as may be considered necessary or incidental thereto.";
(d) in sub-section (3B), for the word, brackets, figure
and letter "sub-section (3A)" at both the places where they occur,
the words, brackets, figures and letters "sub-section (3A) and sub-section
(3AA)" shall be substituted.
10. Insertion of new section 9A.--
After section 9 of
the Bank (Second) Nationalisation Act, the following section shall be inserted,
namely:--
"9A. Power of Reserve Bank to appoint
additional director.?
(1) If the Reserve Bank is of the opinion that in the
interest of banking policy or in the public interest or in the interests of the
corresponding new bank or its depositors, it is necessary so to do, it may,
from time to time, by order in writing, appoint, with effect from such date as
may be specified in the order, one or more persons to hold office as additional
directors of the corresponding new bank.
(2) Any person appointed as an additional director in
pursuance of this section?
(a) shall hold office during the pleasure of the
Reserve Bank and subject thereto for a period not exceeding three years or such
further periods not exceeding three years at a time as the Reserve Bank may
specify;
(b) shall not incur any obligation or liability by
reason only of his being a director or for anything done or omitted to be done
in good faith in the execution of the duties of his office or in relation
thereto; and
(c) shall not be required to hold qualification shares
in the corresponding new bank.
(3) For the purpose of reckoning any proportion of the
total number of directors of the corresponding new bank, any additional
director appointed under this section shall not be taken into account.".
11. Amendment of section 10A.--
In section 10A of
the Bank (Second) Nationalisation Act,--
(a) in sub-section (2), for the words "shall be
entitled to discuss", the words "shall be entitled to discuss,
approve and adopt" shall be substituted;
(b) after sub-section (2), the following sub-section
shall be inserted, namely:--
"(3)
Nothing contained in this section shall apply during the period for which the
Board of Directors of a corresponding new bank had been superseded under
sub-section (1) of section 18A:
Provided that the Administrator may, if he
considers it appropriate in the interest of the corresponding new bank whose
Board of Directors had been superseded, call annual general meeting in
accordance with the provisions of this section.".
12. Insertion of new section 10B.--
After section 10A of
the Bank (Second) Nationalisation Act, the following section shall be inserted,
namely:--
'10B. Transfer of unpaid or unclaimed dividend to
Unpaid Dividend Account.?
(1) Where, after the commencement of the Banking
Companies (Acquisition and Transfer of Undertakings) and Financial Institutions
Laws (Amendment) Act, 2006, a dividend has been declared by a corresponding new
bank but has not been paid or claimed within thirty days from the date of
declaration, to, or by, any shareholder entitled to the payment of the
dividend, the corresponding new bank shall, within seven days from the date of
the expiry of such period of thirty days, transfer the total amount of dividend
which remains unpaid or unclaimed within the said period of thirty days, to a
special account to be called "Unpaid Dividend Account of ... (the name of
the corresponding new bank)".
Explanation.--In
this sub-section, the expression "dividend which remains unpaid"
means any dividend the warrant in respect thereof has not been encashed or
which has otherwise not been paid or claimed.
(2)
Where
the whole or any part of any dividend, declared by a corresponding new bank
before the commencement of the Banking Companies (Acquisition and Transfer of
Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, remains
unpaid at such commencement, the corresponding new bank shall, within a period
of six months from such commencement, transfer such unpaid amount to the
account referred to in sub-section (1).
(3)
Any
money transferred to the Unpaid Dividend Account of a corresponding new bank in
pursuance of this section which remains Unpaid or unclaimed for a period of
seven years from the date of such transfer, shall be transferred by the
corresponding new bank to the Investor Education and Protection Fund
established under sub-section (1) of section 205C of the Companies Act, 1956(1 of 1956).
(4) The money transferred under sub-section (3) to the
Investor Education and Protection Fund shall be utilised for the purposes and
in the manner specified in section
205C of the
Companies Act,1956(1 of 1956).'.
13. Insertion of new section 18A.--
After section 18 of
the Bank (Second) Nationalisation Act, the following section shall be inserted,
namely:--
"18A. Super session of Board in certain cases.?
(1) Where the Central Government, on the recommendation
of the Reserve Bank, is satisfied that in the public interest or for preventing
the affairs of any corresponding new bank being conducted in a manner
detrimental to the interest of the depositors or the corresponding new bank or
for securing the proper management of any corresponding new bank, it is
necessary so to do, the Central Government may, for reasons to be recorded in
writing, by order, supersede the Board of Directors of such corresponding new bank
for a period not exceeding six months as may be specified in the order:
Provided
that the period of super session of the Board of Directors may be extended from
time to time, so, however, that the total period shall not exceed twelve
months.
(2)
The
Central Government may, on super session of the Board of Directors of the
corresponding new bank under sub-section (1), appoint, in consultation with the
Reserve Bank, for such period as it may determine, an Administrator (not being
an officer of the Central Government or a State Government) who has experience
in law, finance, banking, economics or accountancy.
(3)
The
Central Government may issue such directions to the Administrator as it may
deem appropriate and the Administrator shall be bound to follow such directions.
(4) Upon making the order of super session of the Board
of Directors of the corresponding new bank, notwithstanding anything contained
in this Act,--
(a) the chairman, managing director and other directors
shall, as from the date of super session, vacate their offices as such;
(b) all the powers, functions and duties which may, by
or under the provisions of this Act or any other law for the time being in
force, be exercised and discharged by or on behalf of the Board of Directors of
such corresponding new bank, or by a resolution passed in general meeting of
such corresponding new bank, shall, until the Board of Directors of such
corresponding new bank is reconstituted, be exercised and discharged by the
Administrator appointed by the Central Government under sub-section (2):
Provided
that the power exercised by the Administrator shall be valid notwithstanding
that such power is exercisable by a resolution passed in the general meeting of
the corresponding new bank.
(5)
The
Central Government may constitute, in consultation with the Reserve Bank, a
committee of three or more persons who have experience in law, finance,
banking, economics or accountancy to assist the Administrator in the discharge
of his duties.
(6)
The
committee shall meet at such times and places and observe such rules of
procedure as may be specified by the Central Government.
(7)
The
salary and allowances payable to the Administrator and the members of the
committee constituted under sub-section (5) by the Central Government shall be
such as may be specified by the Central Government and be payable by the
concerned corresponding new bank.
(8)
On
and before the expiration of two months before expiry of the period of super
session of the Board of Directors as specified in the order issued under
sub-section (1), the Administrator of the corresponding new bank, shall call
the general meeting of the corresponding new bank to elect new directors and
reconstitute its Board of Directors.
(9)
Notwithstanding
anything contained in any other law or in any contract, the memorandum or
articles of association, no person shall be entitled to claim any compensation
for the loss or termination of his office.
(10) The Administrator appointed under sub-section (2)
shall vacate office immediately after the Board of Directors of the
corresponding new bank has been reconstituted.".
CHAPTER IV
AMENDMENTS TO THE STATE BANK OF INDIA ACT, 1955
14. Amendment of section 20.--
In section 20 of
the State Bank of India Act, 1955(23 of 1955) (hereafter in this Chapter
referred to as the State Bank Act), in sub-section (3), the words "and
thereafter until his successor shall have been duly elected" shall be
omitted.
15. Amendment of section 21A.--
In
section 21A of the State Bank Act, in sub-section (1), the words "and
thereafter until his successor has been duly nominated" shall be omitted.
CHAPTER V
AMENDMENTS TO THE STATE BANK OF INDIA (SUBSIDIARY
BANKS) ACT, 1959
16. Amendment of section 26 of Act 38 of 1959.--
In
section 26 of the State Bank of India (Subsidiary Banks) Act, 1959,--
(a) in sub-section (2), the words "and thereafter
until his successor is duly elected" shall be omitted;
(b) in sub-section (2A), for the words "and
thereafter until his successor shall have been duly nominated or
appointed", the words "and thereafter until his successor shall have
been duly appointed" shall be substituted.
(c)
CHAPTER VI
AMENDMENTS TO CERTAIN OTHER ENACTMENTS
17. Amendment of section 6 of Act 47 of 1961.--
In section 6 of
the Deposit Insurance and Credit Guarantee Corporation Act, 1961, in sub-section
(2), in clause (ii), the words "and thereafter until his successor assumes
office" shall be omitted.
18. Amendment of section 6 of Act 28 of 1981.--
In section 6 of
the Export-Import Bank of India Act, 1981, in sub-section (6), the words
"and thereafter until his successor enters upon his office" shall be
omitted.
19. Amendment of section 7 of Act 53 of 1987.--
In section 7 of
the National Housing Bank Act, 1987, in sub-section (2), the proviso shall be
omitted.
[1] Substituted by the Export-Import Bank of India
(Amendment) Act, 2011 (Act No. 11 of 2012) w.e.f. 01.02.2012 Prior to
Substitution it read as under :-
" [(1)
The authorized capital of exim bank shall be one thousand crores of rupees;
Provided
that the Central Government may be notification, increase the said capital up
to two thousand crores of rupees]
Provided
that the Central Government may, by notification, increase the said capital up
to five thousand crores of rupees."
[2] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[3] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[4] Substituted for the words "three years" by Banking (Amendment)
Act (81 of 1985), S. 16 (1-5-86).
[5] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[6] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[7] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[8] Substituted for sub-sec. (6) by Banking, Public Institutions and
Negotiable Instruments (Amendment) Act (66 of 1988), S. 39 (30-12-88).
[9] The following words "and thereafter until his successor enters
upon his office "are omitted by the Banking Companies (Acquisition and
Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act,
2006, w.e.f. 16.10.2006.
[10] Word "other" omitted by Banking, Public Institutions and
Negotiable Instruments (Amendment) Act (66 of 1988), S. 39 (30-12-88).
[11] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[12] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[13] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[14] Inserted by the Export-Import Bank of India (Amendment) Act, 2011
(Act No. 11 of 2012) w.e.f. 01.02.2012.
[15] Inserted by the Export-Import Bank of India
(Amendment) Act, 2011 (Act No. 11 of 2012) w.e.f. 01.02.2012.
[16] 1-3-1986 - is the date appointed
[17] Inserted by Banking, Public Financial Institutions
and Negotiable Instruments (Amendment) Act, (66 of 1988), S. 40 (30-12-88).
[18] 31st March in each year is the due date specified
for purposes of S. 19(2)
[19] 31st March in each year is the due date specified
for purposes of S. 19(2)
[20] Substituted for the words "each year" by
Banking, Public Financial Institutions and Negotiable Instruments (Amendment)
Act (66 of 1988), S. 41(a) (30.12.88).
[21] 31st March in each year is the due date specified
for purposes of S. 22(2) -
[22] Inserted, ibid. S. 41(b).
[23] Inserted vide Credit Information Regulation Act,
2005.
[24] Inserted by Banking, Public Financial Institutions
and Negotiable Instruments (Amendment) Act, (66 of 1988), S. 42 (30-12-1988).
[25] Omitted by Repealing and Amending Act
(19 of 1988), S. 2, 1st Sch. (31-3-1988).