[Act No. 38 of 1959] [10th September, 1959] An Act to
provide for the formation of certain Government or Government associated banks
as subsidiaries of the State Bank of India and for the constitution, management
and control of the subsidiary banks so formed, and for matters connected
therewith, or incidental thereto BE, it
enacted by Parliament in the Tenth year of the Republic of India as follows. This Act may
be called the State Bank of India (Subsidiary Banks) Act, 1959. In this Act,
unless the context otherwise requires, (a)
"appointed
day" means, (i)
in relation
to an existing hank, the date on which the corresponding new bank is constituted
under section 3; (ii)
in relation
to a new bank, the date on which that new bank is constituted under section 3; (iii)
in relation
to the Hyderabad Bank, the dale on which the amendments to the State Bank of
Hyderabad Act, 1956, take effect under Part VII of the Third Schedule; (iv)
[1][***] (b)
"Corresponding
bank" means, (i)
in relation
to the State Bank of Bikaner, the Bank of Bikaner, Limited; (ii)
[2][***] (iii)
[Omitted by
the State-Associated Banks (Miscellaneous Provisions) Act, 1962 (56 of
1962), Section 3 (1-1-1963):] (iv)
in relation
to the State Bank of Mysore, the Bank of Mysore, Limited; (v)
in relation
to the State Bank of Patiala, the Bank of Patiala; (vi)
in relation
to the State Bank of Travancore, the Travancore Bank, Limited; (c)
"Corresponding
new bank" means, (i)
in relation
to the Bank of Bikaner, Limited, the State Bank of Bikaner; (ii)
[3][***] (iii)
[Omitted by
the State-Associated Banks (Miscellaneous Provisions) Act, 1962 (56 of
1962), Section 3 (1-1-1963);] (iv)
in relation
to the Bank of Mysore, Limited, the State Bank of Mysore; (v)
in relation
to the Bank of Patiala, the State Bank of Patiala; (vi)
in relation
to the Travancore Bank, Limited, the State Bank of Travancore; (d)
"Existing
bank" means any of the following banks, namely. (i)
Bank of
Bikaner, Limited; (ii)
[4][***] (iii)
[Omitted by
the State-Associated Banks (Miscellaneous Provisions) Act, 1962 (56 of
1962), Section 3 (1-1-1963);] (iv)
Bank of
Mysore, Limited; (v)
Bank of
Patiala; (vi)
Travancore
Bank, Limited; (e)
"Hyderabad
Bank" means the Hyderabad State Bank constituted under the Hyderabad State
Bank Act, 1350-F, and renamed the State Bank of Hyderabad under sub-section (1)
of section 3 of the State Bank of Hyderabad Act, 1956; (f)
"New
bank" means any of the banks constituted under section 3; (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)
[5][***] (j)
"State
Bank" means the State Bank of India constituted under the State Bank of
India Act, 1955; (k)
"Subsidiary
bank" means any new bank and includes the Hyderabad Bank [6][***] (l)
"Tribunal"
means the Tribunal constituted under section 15. (m)
[7]["workman" has the meaning assigned to it in the Industrial
Dispute, Act, 1947.] CHAPTER II [8][CONSTITUTION OF NEW BANKS AND CHANGE OF NAME OF ANY SUBSIDIARY BANK] With effect from such date, as
the Central Government may, by notification in the Official Gazette, specify in
this behalf, there shall be constituted the following new banks, namely. (a)
the State
Bank of Bikaners; (b)
[9][***] (c)
[10][***] (d)
the State
Bank of Mysore; (e)
the State
Bank of Patiala; (f)
The State
Bank of Travancore; and different dates may be specified for different new
banks. [11][3A. Change or Name of a Subsidiary Bank (1)
The Central
Government after consulting the State Bank and the Reserve Bank may, by
notification in the Official Gazette direct that the name of any subsidiary
bank shall, with effect from such date as may be specified in this behalf, be
changed to any other name and thereupon any reference 10 that subsidiary bank
in this Act or any other law for the time being in force or in any contract,
instrument or document shall be construed as a reference to that bank by its
new name. (2)
The change
in the name of a subsidiary bank under sub-section (1) shall not affect any
rights or obligations of that bank or render defective any legal proceedings by
or against it, and any legal proceedings which might have been continued or
commenced by or against that bank by its former name may be continued by or
against it by its new name.] (1)
Every new
bank shall be a body corporate with perpetual succession and a common seal and
shall sue and be sued in its name. (2)
The body
corporate constituting each of the new banks shall consist of the State Bank
and other shareholders, if any, for the time being of the new bank. (3)
Every new
bank shall carry on the business of banking and other business in accordance
with the provisions of this Act, and shall have power to acquire and hold
properly, whether movable or immovable, for the purposes of its business and to
dispose of the same. (1)
The head
office of each of the new banks shall be at such place as the Central
Government may, by notification in the Official Gazette, from time to time,
specify. (2)
Every new
bank shall maintain as its branches all branches of the corresponding bank in
existence immediately before the appointed day, and shall not establish any new
branch or discontinue any branch except in consultation with the State Bank and
with the approval of the Reserve Bank. [12][6. Authorised capital of new bank (1)
Subject to
the provisions of this Act, the authorised capital of every new bank shall be
rupees five hundred crores. (2)
The
authorised capital of every new bank shall be divided into shares of one
hundred rupees each or of such denomination as the new bank may, with the
approval of the State Bank, decide. (3)
Every new
bank may issue the certificates of shares of equivalent values of such
denomination as the new bank may, decide, with the approval of the State Bank,
in accordance with the procedure as may be prescribed and every shareholder of
the new bank shall be entitled to have the certificate of shares of equivalent
value of such denomination. (4)
Notwithstanding
anything contained in sub-section (1), the State Bank may, [13][in consultation with the Reserve Bank and with the approval of the
Central Government], authorise a new bank to increase or reduce its authorised
capital.] (1)
On the
appointed day, the issued capital of a new bank shall consist of such amount
divided into fully paid-up shares of hundred rupees each, as the State Bank
may, with the approval of the Reserve Bank, fix. [14][(1A) Notwithstanding anything contained in sub-section (1), the issued
capital of a new bank shall, consist of such amount as the State Bank
may, [15][in consultation with the Reserve Bank and with the approval of the
Central Government], fix, and shall be divided into fully paid-up shares of
such denomination in accordance with sub-section (2) of section 6.] (2)
All shares
in the issued capital of a new bank shall, on the appointed day stand allotted
to the State Bank. (3)
The State
Bank shall, as soon as may be, after the determination, if any, by the
Tribunal, of the amount of compensation payable in respect of an existing bank,
consider whether any increase in, or reduction of, the issued capital of the
corresponding new bank as fixed under sub-section (1), by way of adjustment, or
transfer from or to, the reserves of such bank, or in any other manner, is
necessary or expedient and may, thereafter with the approval of the Reserve
Bank, direct that bank to increase or reduce its issued capital. (4)
[16][A new bank may from time to time, [17][with the approval of the State Bank and the Central Government in
consultation with the Reserve Bank], increase, whether by [18][public issue or rights issue] or by preferential allotment or private
placement in accordance with the procedure as may be prescribed, its issued
capital by issue of equity or preference shares. (5)
The issued
capital of a new bank shall consist of equity shares or equity and preference
shares: 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. (6)
A new bank
may, [19][with the approval of the State Bank and the Central Government in
consultation with the Reserve Bank], increase from time to time by way of
issuing bonus shares to existing equity shareholders, its issued capital in
such manner as the State Bank, [20][in consultation with the Reserve Bank and with the approval of the
Central Government], direct. (7)
No increase
or reduction in the issued capital of a new bank shall be made in such a manner
that the State Bank holds at any time less than fifty-one per cent. of the
issued capital consisting of equity shares of new bank. (8)
A new bank
may accept the money in respect of shares issued towards increase in issued
capital in installments, make calls and forfeit unpaid shares and re-issue
them, in the manner as may be prescribed.] (1)
Every new
bank shall establish a reserve fund which subject to the provisions of
sub-section (3) of section 7 and of sub-section (2) of this section, shall. (a)
on the
appointed day, consist of sucii sum as the State Bank, with the approval of the
Reserve Bank, may determine; and (b)
after the appointed
day, consist of the sum aforesaid together with such further sums as may be
transferred to the reserve fund by the new bank out of its annual net profits
before declaring a dividend. (2)
The State
Bank shall, us soon as may be after the determination, if any, of the amount of
compensation by the Tribunal, in respect of an existing bank, consider whether
any increase in, or reduction of, the reserve fund of the corresponding new
bank, by way of adjustment, by transfer from, or to, any account, or towards
provision for bad and doubtful debts, depreciation of any assets or contin?gencies,
or for any other purpose, is necessary, and may, thereafter, with the approval
of the Reserve Bank, direct that bank to so increase or reduce its reserve
fund. On the constitution of a new
bank, all shares in the capital of the corresponding banks, where such
corresponding bank has a share capital, shall stand transferred to, and shall
vest in, the State Bank, free of all trusts, liabilities and encum?brances. (1)
Subject to
the other provisions contained in this Act, when a new bank is constituted, the
undertaking of the corresponding bank shall stand transferred to, and vest in,
the new bank. (2)
The
undertaking of the corresponding bank referred to in sub-section (1) shall be
deemed to include all rights, powers, authorities and privileges and all
property, movable and immovable, including cash balances, reserve funds
investments and all other interests and rights in, or arising out of, such
property and all books, accounts and documents relating thereto as may be in
the possession of that bank immediately before the appointed clay, and shall also
be deemed to include all debts, liabilities and obligations of whatever kind,
then existing of that bank. (3)
Without
prejudice to the other provisions contained in this Act, all contracts, deeds,
bonds, agreements, powers of attorney, grants of legal representation and other
instruments of whatever nature, subsisting or having effect immediately before
the appointed day and to which any existing bank is a party, or which are in
favour of that bank, shall be of full force and effect against or in favour of
the corresponding new bank, as the case may be and may be enforced or acted
upon as fully and effectually as if instead of the existing bank the
corresponding new bank had been a party thereto or as if they had been issued
in favour of the corresponding new bank. (4)
If, on the
appointed day, any suit, appeal or other legal proceeding of whatever nature by
or against an existing bank is pending, the same shall not abate, be
discontinued or be in any way prejudi?cially affected by reason of transfer to
the corresponding new bank of the undertaking of the existing bank, or of
anything contained in this Act, but the suit, appeal or other proceeding may be
continued, prosecuted and enforced by or against the corresponding new bank. (1)
Save as
otherwise provided in this Act, every employee of an existing bank in the
employment of that bank immediately before the appointed day, shall, on and
from that day become an employee of the corresponding new bank and shall hold
his office or service therein by the same tenure, at the same remuneration and
upon the same terms and conditions and with the same rights and privileges as
to pension, gratuity and other matters as be would have held the same on the appointed
day, if the undertaking of the existing bank had not been transferred to and
vested in the corresponding new bank and shall continue to do so unless and
until his employment in that bank is terminated or until his remuneration or
other terms and conditions of service are revised or altered by the
corresponding new bank under, or in pursuance of, any law, or in accord?ance
with any provision which, for the time being governs, his service: Provided that nothing contained
in this sub-section shall apply to an employee of the Bank of Patiala who holds
a civil post under the State of Punjab unless, prior to the appointed day, he
has inti?mated his consent to become an employee of the State Bank of Patiala
by notice in writing, given to the Government of that State through the Bank of
Patiala. (2)
Any person
who, on the appointed day, is entitled to, or is in receipt of a pension or
other superannuation of compassionate allowance or other benefit from an
existing bank or from any provi?dent, pension or other fund or from any
authority administering such fund, shall be entitled to be paid by, and to
receive from, the corresponding new bank or any provident, pension or other
fund or from any authority administering such fund, the same pension, allowance
or benefit, so long as be observes the conditions on which the pension,
allowance or benefit was granted, and if any question arises whether be has so
observed such conditions, the question shall be determined by the State Bank
and its decision thereon shall be final. (3)
For the
persons who immediately before the appointed day are the trustees of, or the
members of any authority administering, any fund constituted for the benefit of
the employees of an existing bank, there shall be substituted as trustees or
members such persons us the State Bank may, by general or special order,
specify. (4)
Notwithstanding
anything contained in the Industrial Disputes Act, 1947, or any other law or in
any agreement for the time being in force, the transfer from an existing bank
of the services of any officer or employee of that bank to the corresponding
new bank in terms of this section shall not entitle any such officer or
employee, to any compensation to which be would, but for this provision, have
been entitled under any such law or agreement, and no claim in respect of such
compensation shall be enter?tained by any Court, tribunal or other authority. (1)
If,
according to the laws of any country outside India, the provisions of this Act
by themselves are not effective to transfer or vest any asset or liability
situated in that country which forms part of the undertaking of an existing
bank to, or in, the corresponding new bank, the affairs of the existing bank in
relation to such asset or liability shall, on and from the appointed day,
stand, entrusted to the [21][managing director] for the time being of the corre?sponding new bank
and the [22][managing director] may exercise all powers and do all such acts and
things as are exercised or done by the existing bank for the purpose of
effectively winding up the affairs of that bank. (2)
The [23][managing director] of the corresponding new bank shall, in exercise of
the powers conferred on him by sub-section (1), take all such steps as may be
required by the laws of any such country outside India for the purpose of
effecting such transfer or vesting, and in connection therewith the [24][managing director] may either himself or through any person authorised
by him in this behalf, realise any asset and discharge any liability of the
existing bank and transfer the net proceeds thereof to the corresponding new
bank. (3)
Notwithstanding
anything contained in sub-section (1) or sub-section (2) on and from the
appointed day, no person shall make any claim or demand or take any proceeding
in India against any existing bank or any person acting in its name or on its
behalf except in so far as may be necessary for enforcing the provisions of
this section or except in so far as it relates to any offence committed by such
person. (4)
[25][For the purposes of this section, (a)
"Corresponding
new bank" means in relation to the Bank of Jaipur Limited, the institution
constituted under section 3 as the State Bank of Bikaner, (b)
"Existing
bank" includes the Bank of Jaipur Limited.] (1)
Every person
who and any State Government which immediately before the appointed day is
registered as a holder of shares in the books of an existing bank shall be given
by the State Bank such compensation in respect of the transfer to the State
Bank of the shares in the capital of that bank as is determined in accordance
with the principles contained in the First Schedule. (2)
The amount
of compensation to be given in accordance with the principles contained in the
First Schedule shall be determined in the first instance by the State Bank, in
consultation with the Reserve Bank, and shall be offered by it to all those to
whom compensation is payable under sub-section (1) in full satisfaction
thereof. (3)
If the
amount of compensation offered by the State Bank in terms of sub-section (2) is
not acceptable to any shareholder of an existing bank, such share-holder may,
before such date as may be notified by the Central Government in the Official
Gazelle, request the Central Government, in writing to have the mailer referred
to the Tribunal. (4)
If, before
the date notified under sub-section (3), the Central Government receives
request, in terms of that sub-section, from not less than one-fourth in number
of the shareholders, holding not less than one-fourth in value of the paid-up
share capital of the existing bank, the Central Government shall have the
matter referred to the Tribunal for decision. (5)
If, before
the date notified under sub-section (3) the Central Government docs not receive
requests as provided in that sub-section, the amount of compensation offered by
the State Bank, and where a reference has been made to the Tribunal, the amount
determined by it, shall be the compensation payable under sub-section (1) and
shall be final and binding on all parties concerned. (6)
Subject to
the provisions of the succeeding sub-sections, the amount of compensation shall
be paid, (a)
if the
shareholder has not applied for shares of the corresponding new bank in
accordance with the provisions of sub-section (7), by a cheque drawn on the
State Bank; and (b)
If he has
applied for share of the corresponding new bank in accordance with the
provisions of that sub-section, in shares of the corresponding new bank to the
extent of the value of such shares allotted to him and the balance by a cheque
drawn on the State Bank. (7)
Any
shareholder of an existing bank to whom compensation is payable under this
section may, before the expiry of three months from the date of the final
determination of the amount of such com?pensation under sub-section (5), or
such extended period as the State Bank may think lit in any particu?lar case to
allow, apply to the State Bank for the transfer to him of shares in the capital
of the correspond?ing new bank in lieu of such compensation or part thereof;
and for the purposes of such transfer, the value of each share of the
corresponding new bank shall be such as may be determined in this behalf by the
State Bank with the approval of the Reserve Bank. (8)
On receipt
of an application under sub-section (7) the State Bank shall issue to the corre?sponding
new bank a warrant, in the form specified in the rules made under this Act,
directing it to transfer in favour of the person specified in the warrant such
number of shares as may be allotted to the applicant in accordance with
sub-sections (9) and (10) out of the shares in the capital of that bank
standing allotted to the State Bank under the provisions of this Act, and the
corresponding new bank shall be bound to comply with such warrant. (9)
A
shareholder of an existing bank who has applied for shares in the capital of
the correspond?ing new bank shall be allotted. (a)
such number
of shares, having such total face value as would bear to forty-five percent, of
the issued capital of the corresponding new bank the same proportion as the
paid-up value of his shares in the capital of the existing bank in respect of
which be is paid compensation bears to the total paid-up capital of that bank;
and (b)
if the total
number of shares allotted under clause (a) to all applicants is less than
forty-five per cent, of the issue capital of the corresponding new bank, such
number of additional shares as the State Bank may deem fit having regard to the
provisions of this Act, the circumstances of the case and the desirability of
securing as wide a distribution of shares among as large 'a number of
shareholders as possible. Explanation. For the purpose of
determining the number of shares under this sub-section fractions of a share
shall be disregarded. (10)
Notwithstanding
anything contained in sub-section (9). an allotment of shares under that
sub-section shall not be made in such a manner that the State Bank holds at any
time less than fifty-five percent, of the issued capital of the corresponding
new bank. (11)
A warrant
issued by the State Bank under sub-section (8) shall not be liable to duty
under the Indian Stamp Act, 1899. (12)
Nothing
contained in this section shall affect the rights inter se between the holder
of any share in an existing bank, and any other person who may have an interest
in such share and such other person shall be entitled to enforce his interest
against the compensation awarded to the holder of such share, but not against
the State Bank. (13)
[26]For the purposes of this section, (a)
"Corresponding
new bank" does not include the State Bank of Patiala and means in relation
to the Bank of Jaipur Limited the institution constituted under section 3 as
the State Bank of Bikaner; (b)
"Existing
bank" includes the Bank of Jaipur Limited, but does not include the Bank
of Patiala.] (1)
The State
Government of Punjab in respect of the Bank of Patiala [27][***] and the Reserve Bank in respect of the Hyderabad Bank, shall be
given, by reason of the provisions of this Act or of the amendmerits contained
in Pan V or Part VII of the Third Schedule, such compensation by the State Bank
as is determined in accordance with the principles contained in the First
Schedule. (2)
The amount
of compensation to be given in accordance with the principles contained in the
First Schedule shall be determined in the first instance by the State Bank, and
shall be offered by it to the State Government of Punjab, [28][***], or the Reserve Bank, as the case may be, in full satisfaction of
the compensation payable under sub-section (1): Provided that in determining the
amount of compensation to be offered to the Suite Government of Punjab [29][***], the State Bank shall consult the Reserve Bank. (3)
If the
amount of compensation offered by the State Bank in terms of sub-section (2) is
not acceptable to the State Government of Punjab, [30][***] or the Reserve Bank as the vase may be, the State Government
concerned or the Reserve Bank, may, before such date as may be notified] by the
Central Government in the Official Gazette, request the Central Government to
have the matter referred to the Tribunal for decision, and where any such
request is received, the Central Government shall refer the mailer accordingly. (4)
If, before
the date notified under sub-section (3) the State Government of Punjab, [31][***] or the Reserve Bank as the case may be has not made any such
request, the amount of compensation offered by the State Bank, and where a
reference has been made to the Tribunal, the amount determined by it, shall be
the compensation payable under sub-section (1) and shall be final and binding
on all parties concerned. (5)
[32]The amount of compensation shall be paid by a cheque drawn of the
Reserve Bank. (1)
The Central
Government may for the purposes of this Act constitute a Tribunal which shall
consist of a Chairman and two other members. (2)
The Chairman
shall be a person who is, or has been, a Judge of a High Court or has been a
Judge of the Supreme Court and of the two other members, one, shall be a
person, who, in the opinion of the Central Government, has had experience of
commercial banking and the other shall be a person who is a chartered
accountant within the meaning of the Chartered Accountants Act, 1949. (3)
If, for any
reason, a vacancy occurs in the office of the Chairman or any other member of
the Tribunal, the Central Government shall fill the vacancy by appointing
another person thereto in accordance with the provisions of sub-section (2) and
any proceeding may be continued before the Tribunal so reconstituted from the
stage at which the vacancy occurred. (4)
The Tribunal
may for the purpose of determining any compensation payable under this Act.
choose one or more persons having special knowledge or experience of any
relevant matter to assist it in the determinal ton of such compensation. (1)
The Tribunal
shall have the powers of a Civil Court while trying a suit under the Code of
Civil Procedure, 1908, in respect of the following matters, namely. (a)
summoning
and enforcing the attendance of any person and examining him on oath. (b)
requiring
the discovery and production of documents; (c)
receiving
evidence on affidavits; and (d)
issuing
commissions for the examination of witnesses or documents. (2)
Notwithstanding
anything contained in sub-section (1) or in any other law for the time being in
force, the Tribunal shall not compel the Reserve Bank, the State Bank or any
subsidary bank. (a)
to produce
any books of account or other documents which the Reserve Bank, the State Bank
or the subsidiary bank claims to be of a confidential nature; (b)
to make any
such books or document part of the record of the proceedings before the
Tribunal; or (c)
to give
inspection of any such books or documents to any party before it or to any
other person. (1)
The Tribunal
shall have power to regulate its own procedure. (2)
The Tribunal
may hold the whole or any part of its enquiry in camera. (3)
Any clerical
or arithmetical mistake in any order of the Tribunal or any error arising
therein from any accidental slip or omission may at any time be corrected by
the Tribunal either of its own motion or on the application of any of the parties. (1)
Save as
otherwise provided in sub-section (2) the shares of a subsidiary bank shall be
freely, transferable. (2)
Nothing
contained in sub-section (1) shall entitle the State Bank to transfer any
shares held by it in any subsidiary bank if such transfer will result in
reducing the shares held by it to less than [33][fifty-one per cent. of the issued capital consisting of equity shares]
of that subsidiary bank. [34][18A. Right of registered shareholder to nominate (1)
Every
individual registered shareholder of a subsidiary bank may, at any time,
nominate, in the prescribed manner, an individual to whom all his rights in the
shares shall vest in the event of his death. (2)
Where the
shares are registered in the name of more than one individual jointly, the
joint holders may together nominate in the prescribed manner, an individual to
whom all their rights in the shares shall vest in the event of the death of all
the joint holders. (3)
Notwithstanding
anything contained in any other law for the time being in force or in any
disposition, whether testamentary or otherwise, in respect of such shares where
a nomination made in the prescribed manner purports to confer on any individual
the right to vest the shares, the nominee shall, on the death of the
shareholder or, as the case may be, on the death of all the joint holders,
become entitled to all the rights of the shareholder or, as the case may be, of
all the joint holders, in relation to such shares to the exclusion of all other
persons unless the nomination is varied or cancelled in the prescribed manner. (4)
Where the
nominee is a minor, it shall be lawful for the individual registered as the
holder of the shares to make nomination to appoint, in the prescribed manner,
any person to become entitled to the shares in the event of his death during
the minority of the nominee.] [35][19. Restriction on voting rights No shareholder, other than the
State Bank, shall be entitled to exercise voting rights in respect of any
shares held by him in excess of ten per cent. of the issued capital of the
subsidiary bank concerned: Provided that the shareholder
holding any preference share capital in the subsidiary bank shall, in respect
of such capital, have a right to vote only on resolutions placed before such
subsidiary bank which directly affect the rights attached to his preference
shares: Provided further that no
preference shareholder shall be entitled to exercise voting rights in respect
of preference shares held by him in excess of ten per cent of the total voting
rights of all the shareholders holding preference share capital only.] Notwithstanding anything
contained in the Acts hereinafter mentioned in this section, the shares of a
subsidiary bank shall be deemed to be included among the securities enumerated
in section 20 of the Indian Trusts Act, 1882, and also to be approved
securities for the purposes of Insurance Act 1938, [36][***]. [37][(1)] Every subsidiary bank shall keep at its head office a register, in
one or more books, of the shareholders and shall enter therein the following particulars
so far as they may be available. (i)
the names,
addresses and occupations, if any, of the shareholders and a statement of the
shares held by each shareholder, distinguishing each share by its denoting
number; (ii)
the date on
which each person is so entered as a shareholder; (iii)
the date on
which any person ceases to be a shareholder; and (iv)
such other
particulars as may be prescribed. [38][Provided that nothing in this section shall apply to the shares held
with a depository.] [39][(2) Notwithstanding anything contained in sub-section (1), it shall be
lawful for a subsidiary bank to keep the register of shareholders in computer
floppies or diskettes or any other electronic form subject to such safeguards
as may be prescribed. (3) ? Notwithstanding anything contained
in the Indian Evidence Act, 1872(1 of 1872), a copy of, or extract from, the
register of shareholders, certified to be a true copy under the hand of any
officer of the subsidiary bank authorised in this behalf shall in all legal
proceedings, be admissible in evidence.] [40][21A. Register Of Beneficial Owners The register of beneficial owners
maintained by a depository under section 11 of the Depositories Act,
1996 shall be deemed to be a register of shareholders for the purposes of this
Act."] [41][No notice of any trust], express, implied or constructive, shall be
entered on the register of shareholders of a subsidiary bank or be receivable
by it in respect of its shares. [42]["Provided that nothing in this section shall apply to a depository
in respect of shares held by it as a registered owner on behalf of the
beneficial owners. Explanation. For the purposes
of section 21 section 21A and this section, the expression
"beneficial owner", "depository" and "registered
owner" shall have the meanings respectively assigned to them in clauses
(a), (e) and (j) of sub-section (1) of section 2 of the Depositories
Act, 1996] Every person holding office as
chairman, director, member of the Board of Management (including a member of a
local or advisory committee), managing director, general manager, manager
(other than manager of a branch), deputy managing director, deputy general
manager, assistant general manager or adviser, as the case may be, in an
existing bank (other than the Bank of Patiala), [43][and the hyderabad Bank] immediately before the ap?pointed day, shall be
deemed to have vacated that office on the appointed day, and notwithstanding
anything, contained in this Act or in any other law for the time being in force
or in any agreement or contract, such person shall not be entitled to any
compensation for the loss of office or for the premature termination of any
agreement or contract relating to his employment, except such pension, compensa?tion
or other benefit as the corresponding new bank, [44][or the Hyderabad Bank], as the case may be. may, with the approval of
the State Bank, grant to him, having regard to what be would have received it
this Act had not been passed and if his employment had ceased on the appointed
day in the ordinary course: Provided that nothing in this
section shall be deemed to prevent any person who has so vacated his office in
any of the said banks from being renominated or reappointed to any office in a
subsidiary bank in accordance with the provisions of this Act. (1)
The State
Bank may, from time to time, give directions and instructions to a subsidiary
bank in regard to any of its affairs and business, and that bank shall be bound
to comply with the directions and instructions so given. (2)
Subject to
any such directions and instructions, the general superintendence and conduct
of the affairs and business of a subsidiary bank shall, as from the appointed
day, vest in a Board of Direc?tors who may, with the assistance of the [45][managing director], exercise all powers and do all acts and things as may
be exercised or done by that bank. (3)
The Board of
Directors of a subsidiary bank shall, in discharging its functions under this
Act, act on business principles, regard being had to public interest. (1)
Subject to
the provisions of sub-section (2) the Board of Directors of a subsidiary bank
shall consist of the following. [46][(a) the Chairman for the time being of the State Bank, ex officio or an
official of the State Bank or of the subsidiary bank nominated by him as
Chairman, [47][in consultation with the Reserve Bank and with the approval of the
Central Government];] [48][(aa) the managing director appointed under sub-section (1) of section
29 or under section 32;] [49](b) one director, possessing necessary expertise and experience in the
matters relating to regulation or supervision of commercial banks, [50][to be nominated by the Central Government on the recommendation of the
Reserve Bank]; (c) not more than five directors to be nominated by the State Bank of
whom not more than three shall be officers of that bank: [51]Provided that any nomination of a director made by the State Bank under
this clause shall, except in so far as it relates to an officer of that bank,
be in consultation with the Central Government. I [52](ca) one director from among the employees of the subsidiary bank, who
arc workmen, to be appointed by the Central Government in the manner provided
in the rules made under this Act: (cb) one director, from among such of the employees of the subsidiary
bank as are not workmen, to be appointed by the Central Government in the
manner provided in rules made under this Act.] [53][(d) not more than three directors to be elected in the following
manner, namely. (i)
if the total
amount of holdings of the shareholders (other than the State Bank) of a
subsidiary bank is more than one per cent. of the total issued capital, and
equal to or less than sixteen per cent. of such capital, one director to be
elected, in the prescribed manner, by such shareholders and two directors shall
be nominated by the State Bank, or (ii)
if the total
amount of holdings of the shareholders (other than the State Bank) of a
subsidiary bank is more than sixteen per cent. of the total issued capital and
equal to or less than thirty-two per cent. of such capital, two directors to be
elected in the prescribed manner by such shareholders and one director shall be
nominated by the State Bank, or (iii)
if the total
amount of holdings of the shareholders (other than the State Bank) of a
subsidiary bank is more than thirty-two per cent. of the total issued capital,
all the three directors to be elected, in the prescribed manner, by such
shareholders: Provided that in case, the total
amount of holdings of the shareholders of a subsidiary bank (other than the
State Bank) is not more than one per cent. of the total issued capital, all
three directors shall be nominated by the State Bank and such directors shall,
for the purposes of this Act, be deemed to be directors elected under this
clause. Explanation. For the purposes of
this sub-section, the total amount of holdings of the shareholders (other than
the State Bank) whose names are on the register of shareholders of the
subsidiary bank three months before the date fixed for election of directors
shall be taken into account] (e) a director, if any, to be nominated by the Central Government [54][* *]. (2)
Notwithstanding
anything contained in clause (d) of sub-section (1), on the first constitution
of the Board of Directors, the directors referred to in the said clause shall
be appointed by the State Bank and the directors so appointed shall, for the
purposes of this Act, be deemed to have been elected within the meaning of the
said clause, (3)
[55][* * *] (4)
An officer
of [56][***] the State Bank may be nominated as a director of a subsidary bank
by virtue of his office. (5)
The
directors nominated under sub-section (2) shall retire at the expiry of one
year after the appointed day. (6)
Any
nomination or appointment of a director made by the State Bank under this Act
shall, except in so far as it relates to an Officer of that bank, be [57][in consultation with the Central Government]. [58][25A. Fit and proper status of an elected director (1)
The
Directors to be elected under clause (d) of sub-section (1) of section 25
shall- (a)
have special
knowledge or practical experience in respect of one or more of the following
matters, namely. (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, which would, in
the opinion of the Reserve Bank, be useful to the subsidiary bank; (b)
represent
the interests of depositors; or (c)
represent
the interests of farmers, workers and artisans. (2)
Without
prejudice to the provisions of sub-section (1) 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 (d)
of sub-section (1) of section 25 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. (3)
The Reserve
Bank may also specify in the notification issued under sub-section (2), the
authority to determine the fit and proper status, the manner of such
determination, the procedure to be followed for such determinations and such
other matters as may be considered necessary or incidental thereto. (4)
Where the
Reserve Bank is of the opinion that any director of a subsidiary bank elected
under clause (d) of sub-section (1) of section 25 does not fulfill the
requirements of sub-sections (1) and (2), it may, after giving to such director
and the subsidiary bank a reasonable opportunity of being heard, by order,
remove such director and on such removal, the Board of Directors shall co-opt
any other person fulfilling the requirements of the said sub-sections as a director
in place of the person so removed till a director is duly elected by the
shareholders of the subsidiary bank in the next annual general meeting and the
person so co-opted shall be deemed to have been duly elected by the
shareholders of the subsidiary bank as a director.] [59][25B. Power of Reserve Bank to appoint additional directors (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 subsidiary bank or its depositors,
it is necessary so to do, it may, from time to time and 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 subsidiary bank. (2)
Any person
appointed as additional director in pursuance of this section shall. (a)
hold office
during the pleasure of the Reserve Bank and subject thereto for a period not
exceeding three years or such further period not exceeding three years at a
time as the Reserve Bank may specify; (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 execution of the
duties of his office or in relation thereto; and (c)
not be
required to hold qualification shares in the subsidiary bank. (3)
For the
purpose of reckoning any proportion of the total number of directors of the
subsidiary bank, any additional director appointed under this section shall not
be taken into account.] (1)
A director
of a subsidiary bank [60][nominated under clause (b) or clause (c) or clause (e) of sub-section
(1) of section 25 or appointed under clause (ca) or clause (cb) of that
sub-section], shall hold office during the pleasure of the authority [61][nominating or appoint?ing] him. [62][(2) Subject to the provisions contained in section 25 a director
elected under clause (d) of sub?section (1) of that section shall hold office
for three years and [63][***], and shall be eligible for re-election: Provided that no such director
shall hold office continuously for a period exceeding six years. (2A) Subject to the provisions contained in section 25 and in
sub-section (1), a director nomi?nated under clause (c) and not being an
officer of the State Bank or a director appointed under clause (ca) or clause
(cb) or a director, not being an officer of the Central Government, nominated
under clause (e) of sub-section (1) of section 25 shall hold office for such term
not exceeding three years, as the Central Government may specify [64][***] and shall be eligible for re-nomination or reappointment, as the
case may be: Provided that no such director
shall hold office continuously for a period exceeding six years.] [65][(3)***] (1) A person shall be disqualified to be a director of a subsidiary bank,
if- (a) he holds the office of director, provisional director, promoter, agent,
or manager of any banking company or a banking company for the formation of
which a prospectus has been issued; or (b) he is a salaried officer of Government; or (c) he has been removed or dismissed from the service of Government or a
local authority or a corporation or a company in which not less than fifty-one
per cent, of the paid-up share capital is held by Government; or (d) he holds any office of profit under the subsidiary banks 1[other
than the office of the managing director]; or [66][(da) in the
case of a director appointed under clause (ca) or clause (cb) of sub-section
(1) of section 25, (i) he is not serving in the subsidiary bank or has not been serving in it
for a continuous period of at least five years; and (ii) he is of such age that there is a likelihood of his attaining the age of
superannuation during his term of office as a director; or] (e) he is, or at any time has been, adjudicated an insolvent or has
suspended payment of his debts or has compounded with his creditors; or (f) he is of unsound mind and stands so declared by a competent Court; or (g) he is, or has been, convicted of any offence which, in the opinion of
the Central Government involves moral turpitude; or (h) in the case of an elected director, be is not registered as a holder of
unencumbered shares in the subsidiary bank of a nominal value of al least one
thousand rupees: Provided that the disqualification mentioned in
clause (b) shall not apply to an officer of the Central Government, nominated
as a director under clause (e) of sub-section (1) of section 25; [67][Provided
further that in the case of a director appointed under clause (ca) or Clause
(cb) of sub?section (1) of section 25 the disqualification mentioned in clause
(d) shall not operate: Provided also that] in the case of a director
deemed to have been elected on the first constitution of the Board of Director,
the disqualification mentioned in clause (h) shall not operate for a period of
six months from his becoming such director. (2) No two persons who are partners of the same firm or are directors of the
same private com?pany or one of whom is an agent of the other or holds a power
of attorney from a firm of which the other is a partner may be directors of a
subsidiary bank at the same time. (3) The nomination or election, as a director of any person who is a member
of either House of Parliament or the Legislature of a State shall be void
unless within two months of the date of nomination or election as such
director, be ceases to be a member of Parliament or the Legislature of the
State, and if any director is elected or nominated as a member of Parliament or
the Legislature of a State, be shall cease to be a director as from the date of
such election or nomination, as the case may be. (4) Nothing contained in clause (d) of sub-section (1) shall be deemed to
preclude any person from being a director of a subsidiary bank by reason only
of his being a legal or technical adviser of that bank. (5) In this section, (a) "banking company" has the same meaning as in the [68][Banking
Regulation Act, 1949] (10 of 1949); (b) "manager" means the chief executive officer, by whatever name
called of a banking company: (c) "private company" has the same meaning as in the Companies
Act, 1956. If a director of a subsidiary bank. (a) is, or has become, subject to any of the disqualification mentioned in
section 27; or (b) resigns his office by giving notice in writing under his hand, in the
case of a nominated director to the State Bank, and in the case of an elected
director to the Board of Directors of the subsidi?ary bank, and his resignation
is accepted, or (c) is absent without leave of the Board of Directors for more than three
consecutive meetings thereof: (d) his seat on the Board of Directors shall thereupon become vacant: Provided that nothing in Clause (b) or Clause (c) shall
apply to a director referred to in clause (b) of sub-section (1) of section 25
or to a director, being an officer of the State Bank, nominated under clause
(c) or to a director, being an officer of the Central Government nominated
under clause (e) of that sub-section. [69][29.
Managing Director (1) The State Bank shall, after consulting the Board of Directors of a
subsidiary bank, [70][and the
Reserve Bank, and with the approval of the Central Government], appoint a [71][managing director]
for that subsidiary bank; Provided that in the case of the first appointment
of the [72][managing
director] no such consultation with the Board of Directors of the subsidiary
bank shall be necessary. (2) Subject to the general control of the Board of Directors, the day-to-day
administration and management of the affairs of a subsidiary bank shall vest in
the [managing director] and the [73]managing
director] shall exercise such other powers and perform such other duties as may
be delegated to him by the Board of Directors. (3) The [74][managing
director] of a subsidiary bank. (a) shall devote his whole time to the affairs of that bank: Provided that [75][managing
director] of the subsidiary bank may, [76][with the
approval of the State Bank and the Central Government in consultation with the
Reserve Bank], be a director of any other institution; (b) shall hold office for such term not exceeding four years and subject to
such conditions as the State Bank may, [77][in
consultation with the Reserve Bank and with the approval of the Central
Government], specify at the time of his appointment: (c) shall receive such salary and allowances as may be determined by the
State Bank [78][in
consultation with the Reserve Bank and with the approval of the Central
Government]. (4) The [79][managing
director] vacating his office shall be eligible for reappointment. (5) The State Bank may, [80][in
consultation with the Reserve Bank and with the approval of the Central
Government], for any sufficient reason, remove from office the [managing
director] of a subsidiary bank: Provided that no [81][managing
director] shall be removed from office unless be has been given an opportunity
of showing cause against such removal. A director of a subsidiary bank shall be paid for unending the meetings
of the Board of Directors or of any of its committees and for attending to any
other business of the subsidiary bank such fees and allowances as may be
prescribed; Provided that no fee shall be payable to the chairman of the State
Bank [82][or the managing director of the subsidiary bank]
or any other director who is a whole-time officer of the Central Government or
the Reserve Bank or the State Bank. (1)
The State
Bank may, [83][in consultation with the Reserve Bank and with the
approval of the Central Government], for any sufficient reason, remove from
office a director nominated under clause (c) of sub-section (1) of section 25
and not being an officer of the State Bank. (2)
The Central
Government may, in consultation with the State Bank, for any sufficient reason,
remove from office a director [84][appointed under clause (ca) or clause (cb) or
nominated under clause (e)] of sub-section (1) of section 25 and not being an
officer of the Central Government. (3)
Any director
elected under clause (d) of sub-section (1) of section 25 may be removed from
office. (a)
by the State
Bank, [85][in consultation with the Reserve Bank and with the
approval of the Central Government], if at the time of the removal there are no
shareholders other than the State Bank registered in the books, of the
subsidiary bank con?cerned; (b)
by a
resolution passed by a majority of the votes of such shareholders holding in
the aggregate not less than one-half of the share capital held by all such
shareholders; Provided that if the total amount of the holdings of all shareholders,
other than the State Bank, registered in the books of the subsidiary bank, on
the date of the resolution, is below five per cent of the total issued capital,
the resolution shall not have effect unless confirmed by the State Bank. (4)
No director
shall be removed from office under sub-section (1) or sub-section (2) unless be
has been given an opportunity of showing cause against such removal. 32. Appointment Of Another Person For Discharging The Duties Of 1[Managing
Director] During His Absence If the [86][managing director] of a subsidiary bank is
rendered incapable of discharging his duties by reason of infirmity or
otherwise or is absent on leave or otherwise in circumstances not involving the
vacation of his office, the State Bank may appoint another person to officiate
for the [87][managing director] until the date on which
the [88][managing director] resumes duty. (1)
Where any
vacancy occurs before the expiry of the term of office of a director of a
subsidiary bank [89][other than the managing director or a director
appointed under clause (ca) or clause (cb) of sub-section (1) of section 25 the
vacancy shall be filled. (a)
in the case
of a director nominated under clause (c) of sub-section (1) of section 25 not
being an officer of the State Bank, by nomination by the State Bank; (b)
in the case
of a director elected under clause (d) of sub-section (1) of section 25 by
election or where the proviso to that clause is applicable, by nomination by
the State Bank. Provided that where the duration of the vacancy in the office of an
elected director is likely to be less than six months, the vacancy may be
filled by the remaining directors by co-opting a person from amongst the
shareholders entitled to elect a director under clause (d) of sub-section (1)
of section 25 who is not disqualified under section 27; (c)
in the case
of a director nominated under clause (e) of sub-section (1) of section 25 not
being an officer of the Central Government, by nomination by the Government in
consultation with the State Bank. (2)
A person
nominated or elected or co-opted, as the case may be [90][under sub-section (1)] shall hold office for the
unexpired portion of the term of his predecessor. (3)
[91][Where any vacancy occurs before the expiry of the
term of office of a director appointed under clause (ca) or clause (ab) of
sub-section (1) of section 25, such vacancy shall be filled in accordance with
the said clause (ca) or, as the case may be, clause (cb), and the director so
appointed shall hold office for the period specified under sub-section (2 A) of
section 26.] [92][(1) The Board of Directors of a subsidiary bank
shall meet at such time and place and shall observe such rules of procedure in
regard to the transaction of business at its meetings as may be prescribed; and
the meeting of the Board of Directors may be held by participation of the
directors of the Board through video-conferencing or such other electronic
means, as may be presented, which are capable of recording and recognising the
participation of the directors and the proceedings of such meetings are capable
of being recorded and stored: Provided that the Central Government may in consultation with the
Reserve Bank, by a notification in the Official Gazette, specify the powers
which shall not be exercised in a meeting of the Board of Directors held
through videoconferencing or such other electronic means.] (2) [93][The Chairman of the Board of Directors of a
subsidiary bank] shall preside at every meeting of the Board of Directors of a
subsidiary bank and in his absence such one of the directors as may generally
or in relation to any particular meeting be authorised by the chairman in this
behalf shall preside; and in the absence of the chairman and also failing such
authorisation, the directors of the subsidiary bank present at the meeting
shall elect one from among themselves to preside at the meeting. Explanation. For the purposes of this sub-section, "absence from a
meeting" means non-attendance for any reason whatsoever at the meeting or
any pan of the meeting during which any business is transacted. [94][(3) All questions at the meeting of the Board of
Directors of a subsidiary bank shall be decided by a majority of the votes of
the directors present in the meeting or through video-conferencing or such
other electronic means and in the case of equality of votes, the Chairman of
Board of Directors of a, subsidiary bank or, in his absence, the person
presiding at the meeting shall have a second or casting vote."; (4) Where any of the directors specified in clauses
(a) and (b) of sub-section (1) of section 25 or any of the directors, being an
officer of the State Bank specified in clause (c) of that sub-section is unable
to attend any meeting of the Board of Directors of a subsidiary bank, and the
State Bank or any other such director as may be present at the meeting
considers that the State Bank would not be ad?equately or effectively
represented at such meeting by reason of the absence of any such, director, the
State Bank or the director present may give notice in writing to that
subsidiary bank-- (i)
that the
meeting should be adjourned to such date as may be indicated in the notice; or (ii)
that any
matter, action, step or proceeding proposed to be considered taken or carried
out at that meeting, should not be so considered, taken or carried out; or (iii)
that no
decision should be taken at that meeting on any such matter, action, step or
proceeding; (iv)
and that
subsidiary bank and its Board of Directors shall be bound to comply with such
notice and act accordingly. (5) A director of a subsidiary bank who is directly
or indirectly concerned or interested in any contract, loan, arrangement or
proposal, entered into or proposed to be entered into or made by or on behalf
of the subsidiary bank shall, at the earliest possible opportunity, disclose
the nature of his interest to the Board of Directors of that bank, and any such
director shall not be present at any meeting of the Board of Directors when any
such contract, loan, arrangement or proposal is discussed, unless his pres?ence
is required by the other directors for the purpose of eliciting information and
where any director is so required to be present, be shall not vote on any such
contract, loan, arrangement or proposal: [95][Provided that nothing contained in this
sub-section shall apply to such director by reason only of his being. (i)
a
shareholder (other than a director) holding not more than two per cent of the
paid-up capital in any public company as defined in the Companies Act, 1956, or
any corporation established by or under any law for the time being in force in
India or any co-operative society, with which or to which the subsidiary bank
has entered into or made, or proposes to enter into or make, a contract, loan,
arrangement or proposal; or (ii)
a director
of the State Bank or of any other subsidiary bank being a director under clause
(a) or clause (e) of sub-section (1) of section 25 or being an officer [96][of the State Bank nominated under clause (c)] of that
sub-section]; [97][or] (iii)
[98][an officer or other employee of the State Bank, or
any other institution, if be is the managing director appointed under
sub-section (1) of section 29 or under section 32; or (iv)
an officer
or other employee of the subsidiary bank if be is a director appointed under
clause (ca) or clause (cb) of sub-section (1) of the section 25.] (6) A copy of the minutes of every meeting of the
Board of Directors of a subsidiary bank, together with copies of all connected
papers, shall be forwarded to the State Bank [99][* * *] as soon as possible. (1)
There shall
be an executive committee in respect of a subsidiary bank consisting of such
directors as may be prescribed: Provided that if any such director being an officer of the State Bank
and nominated by that bank under clause (e) of sub-section (1) of section 25,
is for any reason unable to exercise his functions or to discharge his duties
in relation to the executive committee, the State Bank may depute any of its
officers to exercise all the functions and to discharge all the duties of such
director in relation to the executive committee whenever such director is so
unable to exercise his functions or discharge his duties and the officer so deputed
shall, for all purposes of this Act, in so far as it applies to the executive
committee, be deemed to be a director of the subsidiary bank. (2)
Subject to
any regulations made under this Act, the executive committee may deal with any
matter within the competence of the Board of Directors. (3)
A copy of
the minutes of every meeting of the executive committee of a subsidiary bank
shall be forwarded to the State Bank and be laid before the Board of Directors
of the subsidiary bank as soon as possible after the meeting. (4)
Without
prejudice to the powers of the executive committee, and subject to any
regulations made under this Act, the Board of Directors of a subsidiary bank
may constitute such and so many other committees, whether consisting wholly of
the directors or wholly of other persons, or partly of the directors and partly
of other persons, as it deems fit, to exercise such powers and perform such
duties as may, subject to such conditions, it any, as the Board of Directors
may impose, be delegated to them by the Board of Directors. [100][35A. Super session of Board of Directors in
certain cases (1)
[101][Where the Central Government, on the
recommendation of the Reserve Bank and in consultation with the State Bank] is
satisfied that in the public interest or for preventing the affairs of a
subsidiary bank being conducted in a manner detrimental to the interest, of the
depositors or the subsidiary bank or for securing the proper management of the
subsidiary bank, it is necessary so to do, [102][the Central Government may], for reasons to be
recorded in writing, by order, supersede the Board of Directors of the
subsidiary 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)
[103][The Central Government in consultation with the
Reserve Bank may], on super session of the Board of Directors of the subsidiary
bank under sub-section (1), appoint, 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)
[104][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 subsidiary 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 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 subsidiary bank, or by a resolution passed in
general meeting of the subsidiary bank, shall, until the Board of Directors of
the subsidiary bank is reconstituted, be exercised and discharged by the
Administrator appointed by [105][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 subsidiary bank. (5)
[106][The Central Government in consultation with the
Reserve Bank may] constitute 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 referred to in sub-section (5) shall meet at such times and places
and observe such rules of procedure as may be specified by [107][the Central Government]. (7)
The salary
and allowances payable to the Administrator and the members of the Committee
constituted under sub-section (5) by [108][the Central Government] shall be such as may be
specified by [109][the Central Government] and be payable by the
concerned subsidiary 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 subsidiary bank, shall call the
general meeting of the subsidiary 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 subsidiary bank has been reconstituted. (1)
A subsidiary
bank shall, if so required by the State Bank, act as agent of the State Bank at
any place in India for (a)
paying,
receiving, collecting and remitting money, bullion and securities on behalf of
any Gov?ernment in India; and (b)
undertaking
and transacting any other business which the Reserve bank may, from time to
time, entrust to the state Bank. (2)
The terms
and conditions on which any such agency business shall be carried on by the
subsidiary bank on behalf of the State Bank shall be such as may be determined
by the State Bank, after consultation with the subsidiary bank and with the
approval of the Reserve Bank, (3)
[110][*****] [111][36A. Subsidiary Bank To Act As Agent Of The
Reserve Bank (1)
A subsidiary
bank shall, if so required by the Reserve Bank, act as agent of the Reserve
Bank at all places in India, where it has a branch, for (a)
paying,
receiving, collecting and remitting money, bullion and securities on behalf of
any Government in India; and (b)
undertaking
and transacting any other business which the Reserve Bank may from time to time
entrust to it. (2)
The terms
and conditions on which any such agency business shall be carried on by the sub?sidiary
bank on behalf of the Reserve Bank shall be such as may be agreed upon. (3)
If, no
agreement can be reached on any matter referred to in sub-section (2) or if a
dispute arises between a subsidiary bank and the Reserve Bank as to the
interpretation of any agreement be?tween them, the matter shall be referred to
the Central Government and the decision of the Central Government thereon shall
be final. (4)
A subsidiary
bank may transact any business or perform any functions entrusted to it under
sub-section (1), by itself or through any agent approved by the Reserve Bank. [112][(1) Subject to the other provi?sions contained in
this Act, a subsidiary bank may carry on and transact the business of banking
as defined in clause (b) of section 5 of the Banking Regulation Act,
1949, and may engage in one or more of the other forms of business specified in
sub-section (1) of section 6 of that Act.] (2) The Central Government may, after consultation
with the Reserve Bank and the State Bank, by order in writing. (a)
authorise
subsidiary bank to do such other forms of business as the Central Government
may consider necessary or expedient; (b)
direct that
any form of business as is mentioned in the order shall be carried on subject
to such restrictions, conditions and safeguards as may be specified therein; or (c)
prohibit a
subsidiary bank from carrying on or transacting any form of business which, but
for this clause, it is lawful for the subsidiary bank to engage in. (3) ? Save as
otherwise provided in sub-section (2), a subsidiary bank shall not engage in
any form of business other than that referred to in sub-section (1). (1)
A subsidiary
bank may, with the approval of the State Bank, and shall, it the Reserve Bank,
in consultation with the State Bank, so directs, enter into negotiations for
acquiring the business, including the assets and liabilities of any other
banking institu?tion. (2)
The terms
and conditions relating to such acquisition, if agreed upon by the Board of
Directors of the subsidiary bank concerned and the directorate or management of
the banking institution con?cerned and approved by the Reserve Bank, shall be
submitted to the Central Government for its sanction and that Government may by
order in writing (hereafter in this section referred to as the order of sanc?tion)
accord its sanction thereto. (3)
Notwithstanding
anything contained in this Act or any other law for the time being in force or
any instrument regulating the constitution of the banking institution
concerned, the terms and conditions as sanctioned by the Central Government
shall come into effect on the date specified by the Central Government in this
behalf in the order of sanction and be binding upon the subsidiary bank and the
banking institution concerned as well as upon the shareholders (or, as the case
may be, proprietors) and creditors to that banking institution. (4)
If for any
reason the terms and conditions cannot come into effect on the date specified
in the order of sanction, the Central Government may fix another suitable date
for that purpose. (5)
On the date
on which the terms and conditions as aforesaid come into effect, the business
and the assets and liabilities of the banking institution concerned as covered
by the acquisition shall, by virtue and in accordance with the provisions, of
the order of sanction stand transferred to, and become respectively the
business and the assets and liabilities of the subsidiary bank concerned. (6)
The
consideration for the acquisition of the business and the assets and
liabilities of any bank?ing institution under this section may, if so agreed
upon, be paid either in cash or by allotment of shares in the capital of the
subsidiary bank concerned or partly in cash and partly by allotment of shares,
and the subsidiary bank may, for the purpose of any such allotment, increase,
subject to the other provisions contained in this Act relating to the increase
of capital, the capital of the subsidiary bank by the issue of such number of
shares as may be determined by the subsidiary bank. (7)
Any business
acquired under this section shall thereafter be carried on by the subsidiary
bank in accordance with the provisions of this Act subject to such exemptions
or modifications as the Central Government may, by notifications in the
Official Gazette, make in this behalf in consultation with the Reserve Bank; Provided that no such exemption or modification shall be made so as to
have effect for a period of more than seven years from the date of acquisition. (8)
Notwithstanding
anything contained in the Industrial Disputes Act, 1947, or in any other law or
in any agreement for the time being in force on the acquisition of the business
and the assets and liabilities of any banking institution under this section,
no officer or other employee of that banking institution shall be entitled to
any compensation to which be may be entitled under that act or that other law
or that agreement, and no claim in respect of such compensation shall be
entertained by any Court, tribunal or other authority if on his having accepted
in writing an offer of employment by the subsidiary bank concerned on the terms
and conditions proposed by it be has been employed in accordance with such
terms and conditions. (9)
The Central Government
may. if it considers necessary or expedient in the case of any banking
institution in relation to which an order of sanction has been made under this
section, appoint, whether before or after the coming into effect of the terms
and conditions relating to the business and the assets and liabilities of that
banking institution, a suitable person to take over the management of that
banking institution for the purposes of winding up its affairs and distributing
its assets, and the expenditure incurred in connection with such management
(including the remuneration of the person so appointed and his staff, if any)
shall be paid out of the assets of the banking institution or by the subsidiary
bank concerned as the Central Government may direct. (10)
Simultaneously
with the appointment of a suitable person, under sub-section (9) or immedi?ately
thereafter, the Central Government shall issue directions to be followed by
that person in the management of that banking institution for the purposes
aforesaid and thereupon. (a)
the
provisions of the Companies Act, 1956. or the [113][Banking Regulation Act, 1949] or any other law for
the time being in force or any instrument having effect by virtue of any such
Act or law in so far as they are inconsistent with such directions shall cease
to apply to, or in relation to that banking institution: (b)
all persons
in charge of the management, including any person holding office as manager or
director, of the banking institution, immediately before the issue of such
directions, shall be deemed to have vacated their offices as such; and (c)
the person
appointed to take over the management of the banking institution shall in
accordance with those directions, take all such steps as may be necessary to
facilitate the winding up of its affairs and the distribution of its assets. (11)
The Central
Government, when satisfied that nothing further remains to be done in order to
wind up the affairs of the banking institution concerned may, by order in
writing, direct that as from such date as may be specified therein, the banking
institution shall stand dissolved and thereupon any such direction shall have
effect notwithstanding anything to the contrary contained in any other law. (12)
No action
under this section shall be questioned on the ground merely of any defect in
the constitution of any banking institution in relation to which such action
has been taken or in the constitu?tion of its Board of Directors or in the
appointment of any persons entrusted with the management of its affairs. (13)
The
provisions of this section shall apply in relation to the acquisition by one
subsidiary bank of the business including the assets and liabilities of another
subsidiary bank as they apply in relation to the acquisition by a subsidiary
bank of the business including the assets and liabilities of any other banking
institution. (14)
In this
section, "banking institution" includes any individual or any
association of individuals (whether incorporated or not. or whether a
department of Government or a separate institution), carrying on the business
of banking. [114][38A. Arrangement With Subsidiary Banks On
Appointment Of Directors To Prevail (1)
Where any
arrangement entered into by a subsidiary bank with a company provides for the
appointment by the subsidiary bank of one or more Directors of such company,
such provision 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 subsidiary bank in pursuance of the arrangement as
aforesaid. (2) Any Director appointed as aforesaid shall. (a)
hold office
during the pleasure of the subsidiary bank and may be removed or substituted by
any person by order in writing of the subsidiary 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. A subsidiary bank shall cause its books to be closed and balanced [115][as] on the thirty-first day of [116][March] [117][or such other date in each year as the Central
Government may, by notification in the official Gazette, specify]. [118][Provided that with a view to facilitating the
transaction from one period of accounting to another period of accounting under
this 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 in
respect of the concerned years.] (1)
After making
provision for bad and doubtful debts, depreciation in assets, equalisation of
dividends, contribution to staff and superannuation funds and for all other
matters for which provision is necessary by or under this Act or which are
usually provided for by banking companies, a subsidiary bank may, out of its
net profits, declare a dividend. (2)
The rate of
dividend shall be determined by the Board of Directors of the subsidiary bank
concerned. (3)
Nothing in
this section shall be deemed to preclude the payment of interim dividends in
such manner and to such extent as may be prescribed. [119][40A. Transfer of unpaid or unclaimed dividend to unpaid dividend
account (1)
Where, after
the commencement of the State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2007, a dividend has been declared by the subsidiary 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 subsidiary 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...................................... (Name of the subsidiary
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 the subsidiary bank before the
commencement of the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2007, remains unpaid at such commencement, the subsidiary 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 the subsidiary 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 subsidiary 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).] (1)
Subject to
the provisions of section 42, the accounts of a subsidiary bank shall be
audited by an auditor duly qualified to act as an auditor of companies under
sub-section (1) of section 226 of the Companies Act, 1956, who shall
be appointed by the State Bank, with the approval of the Reserve Bank. (2)
The auditor
shall receive such remuneration as the State Bank may fix. (3)
No director
or officer of a subsidiary bank shall be eligible to be its auditor during his
continu?ance in office as such director or officer. (4)
The auditor
shall be supplied with a copy of the annual balance sheet and profit and loss
account, and a list of all books kept by the subsidiary bank, and it shall be
the duty of the auditor to examine the balance sheet and profit and loss
account with the accounts and vouchers relating thereto, and in the performance
of his duties, the auditor. (a)
shall have,
at all reasonable times, access to the books, accounts and other documents of
that subsidiary bank; (b)
may, at the
expense of that subsidiary bank, employ accountants and other persons to assist
him in investigating such accounts: and (c)
may, in
relation to such accounts, examine any director or any officer of that
subsidiary bank. (5)
The auditor
shall hold office for such term not exceeding one year as the State Bank may
fix at the time of its appointment; and if any vacancy arises before the expiry
of the term of an auditor, the vacancy may be filled by the State Bank, with
the approval of the Reserve Bank. (6)
The auditor
shall on relinquishing office be eligible for reappointment. (7)
The auditor
shall make a report to the State Bank upon the annual balance-sheet and
accounts of the subsidiary bank and in every such report, be shall state. (a)
whether in
his opinion, the balance sheet is a full and fair balance sheet containing all
the necessary particulars and is properly drawn up so as to [120][exhibit
a true and fair view] of the affairs of that subsidiary bank, and in case be
has called for any explanation or information, whether it has been given and
whether it is satisfactory; (b)
whether or
not the transactions of that subsidiary bank which have come to his notice have
been within the competence of the bank; (c)
whether or
not the returns received from the offices and branches of that subsidiary bank
have been found adequate for the purpose of his audit; (d)
whether the
profit and loss account shows a true balance of profit or loss for the period
covered by such account; and (d)
any other
matter which be considers should be brought to the notice of the State Bank, (e)
whether the
profit and loss account shows a true balance of profit or loss for the period (f)
any other
matter which he considers should be brought to the notice of the State
Bank. [121][Explanation 1. For the purposes of this Act, (a)
the
balance-sheet shall not be treated as not disclosing a true and fair view of
the affairs of the subsidiary bank, and (b)
the profit
and loss account shall not be treated as not showing a true balance of profit
or loss for the period covered by such account, merely by reason of the fact
that the balance-sheet or, as the case may be, the profit and loss account,
does not disclose any matters which are. by the provisions of the Banking
Regulation Act, 1949, read with the relevant provisions of this Act, not
required to be disclosed. Explanation
2. For the purposes of this Act, the accounts of the subsidiary bank shall not
be deemed as having not been properly drawn up on the ground merely that they
do not disclose certain matters if. (i)
those
matters are such as the subsidiary bank is, by virtue of any provision
contained in the Banking Regulation Act, 1949, read with the relevant provisions
of this Act, or any other Act, not required to disclose, and (ii)
the
provisions referred to in clause (i) are specified in the balance-sheet and
profit and loss account of the subsidiary bank or in the auditor's report.] (8)
The auditor
shall forward a copy of the audit report to the subsidiary bank and to the
Central Government. (9)
Without
prejudice to the foregoing provisions, the Central Government may, at any time,
appoint such number of auditors as it thinks fit to examine and report on the
accounts of a subsidiary bank, and the auditors so appointed shall have all the
rights, privileges and authority in relation to the audit of the accounts of
the subsidiary bank which an auditor appointed by the State Bank has under this
section. If, on the
appointed day, any appointment of an auditor made by, or in respect of, an
existing bank, [122][or
the Hyderabad Bank], as the case may be, is subsisting, the State Bank may, on
or after such day, cither confirm the appointment in accordance with the
provisions of this Act, subject to such modifications of the terms and
conditions of the appointment, as if may deem necessary, or terminate the
appointment, and may, if it so terminates the appointment, fix such
remuneration as appears to it to be reasonable having regard to the wink
already done, functions discharged, or duties performed by the auditor
concerned. (1)
A subsidiary
bank shall furnish to the State Bank [123][the
Reserve Bank and the Central Government] (a)
[124][within three months from the 31st day of [125][March]
[or the date notified under section 39. as the case may be.] as on which its
books are closed and balanced], its balance sheet, together with the profit and
loss account and the auditor's report, and a report by the Board of Directors
on the working [126][and
activities] of the subsidiary bank during the period covered by the ac?counts;
and (b)
any other
information relating to the affairs and business of the subsidiary bank which
the State Bank or the Reserve Bank may require. [127][Provided that the Reserve Bank may, after consultation with the State
Bank, extend the said period of three months by such further period, not
exceeding three months, as it may think fit.] (2)
[128][The balance-sheet and profit and loss account of the subsidiary bank
shall be signed by persons holding the office of the chairman, managing
director, and a majority of the other directors of the subsidiary bank in
office.] (3)
[129][The Central Government shall cause the auditor's report and the report
by the Board of Directors on the working and activities of the subsidiary bank
to be laid, as soon as may be after they are received, before each House of
Parliament, [130][*
* * * *]. (1)
A general
meeting (Hereinafter referred to as an annual general meeting) of a subsidiary
bank shall be held [131][in
each year] at the place where the head office of the subsidiary bank is situate,
and any other general meeting may be convened by the Board of Directors at any
time. [132][Provided that such annual general meeting shall be held before the
expiry of six weeks from the date on which the balance-sheet, together with the
profit and loss account and auditors's report, is under sub-section (1) of
Section 43, forwarded to [133][the
State Bank, the Reserve Bank or the Central Government], whichever date is
earlier.] (2)
The
shareholders present at an annual general meeting shall be emitted to [134][discuss
and adopt the balance sheet] and profit and loss account of the bank concerned,
made up to the previous 31st day of [135][March] [136][[137][or
the date notified under section 39, as the case may be,] the report of the
Board of Directors on the working [138][and
activities] of that bank for the period covered by the accounts and the auditor?s
report on the balance sheet and accounts. (3)
Nothing
contained in this section relating to an annual general meeting shall apply in
relation to a subsidiary bank if, as on the previous 31st day of [139][March] [140][or
the date notified under section 39. as the case may be.] all the shares in the
issued capital of that bank arc held by the State Bank. For the
purpose of facilitating the full and effective transfer of the undertaking of
an existing bank in accordance with the provisions of this Act or in order to
remove any difficulty which in the opinion of the Central Government has arisen
or is likely to arise in connection with such transfer, the Central Government
may, in consultation with the Reserve Bank, give such directions to any existing
bank or the State Bank us appear to it to be necessary and the said bank or the
State Bank, as the case may be, shall comply with such directions. (1)
The State
Bank may, in relation to any existing bank [141][***],
at any time before the appointed day, (a)
depute one
or more persons to watch the proceedings at any meeting of the Board of
Directors, any committee or other body of the bank; require the bank to give an
opportunity to the person or persons so deputed to be heard at such meetings
and also require such person or persons to send a report of such proceedings to
the State Bank; (b)
require the
Board of Directors, any committee or other body of the bank to give in writing
to any person specified by the State Bank in this behalf, at his usual address,
all notices of, and other communications relating to, any meeting of the Board
committee or other body, as the case may be; (c)
appoint one
or more persons to observe the manner in which the affairs of the bank or of
its offices or branches are being conducted and make a report thereon; and (d)
require the
bank to furnish the State Bank, within such time as may be specified by the State
Bank with any statement or information relating to the business or affairs of
the bank including copies of the proceedings of any meeting of the Board of
Directors any committee or other body, of the bank. (2)
If a person
deputed by the State Bank to watch the proceedings of any meeting of the Board
of Directors, any committee or other body, as the case may be, gives notice in
writing to the bank that such person considers that any action, step or
proceeding proposed to be taken or curried out by the bank will be detrimental
to the State Bank or to the bank itself, such action, step or proceeding shall
not be taken or carried out by the bank unless and until the Suite Bank
approves in writing of such action step or pro?ceeding. (3)
[142][***] (1)
Without
prejudice to the other provisions contained in this Act, the State Bank may, at
any time, cause an inspection to be made by one or more of its officers of any
existing bank, [143][or
the Hyderabad Bank.] (2)
It shall be
the duty of every person who is or has at any time been a director, officer or
other employee of a bank which is inspected under sub-section (1), to produce
to any officer making the inspection, all such balances, books, accounts,
securities and other documents in his custody or power and to furnish the said
officer with any statements and information relating to the affairs of the bank
as the said officer may require of him within such time as the said officer may
specify. (3)
If any
person. (a)
fails,
within the stipulated time, to produce any balance, book, account, security or
other document or to furnish any statement or information which under
sub-section (2) it is his duly to produce or furnish, or to answer any question
relating to the business of the bank under inspec?tion which is asked by an
officer making the inspection, or (b)
in any
document or information required or furnished or while answering any question
put to him, willfully makes a statement which is false in any material
particular, knowing it to be false, or willfully omits to make a material
statement. he shall be punishable with imprisonment for term which may extend
to three years and shall also be liable to fine. (1)
A subsidiary
bank may accept any subsidies offered by the State Bank to meet. (a)
the cost of
the whole or any part of any specific programme of development undertaken by
that subsidiary bank with the approval of the State Bank; and (b)
such losses
or expenditure as may be approved by the State Bank, with the consent of the
Reserve Bank. (2)
For the
purposes of the [144][Income
tax-Act, 1961], any subsidy received by a subsidiary bank under sub-section (1)
shall not be treated us income, profits or gains of the subsidiary bank. (1)
Notwithstanding
anything contained in any of the other provisions of this Act, or in any other
law or in any contractor service or other document, no appointment made or
promotion, increment in salary, pension or allowance or any other benefit
granted to any person by an existing bank [145][***]
after the 10th day of Feb., 1958, and before the appointed day, which would not
ordinarily have been made or granted or which would not ordinarily have been
admissible under the rules or authorisations of the said banks or of any
provident, pension or other fund in force before the 10th day of February,
1958, shall have effect or be payable or claimable from the subsidiary bank
concerned, or from any provident, pension or other fund or from any authority
administering any such fund, unless the State Bank has, with the approval of
the Reserve Bank, by a general or special order, confirmed the appointment,
promotion or increment or has directed the grant of the pension, allowance or
other benefit, as the case may be. (2)
Where any
officer or other employee of an existing bank [146][***]
has re?ceived any amount by reason of such appointment, promotion or increment
or any such pension, allow?ance or other benefit-as is referred to in
sub-section (1). which has not been confirmed or sanctioned by the State Bank
under that sub-section, such officer or other employee shall be bound to refund
such amount to the subsidiary bank concerned, and that bank shall be entitled
to take all such steps as may be necessary for recovering such amount. (3)
Where any
managing director, general manager or manager, deputy managing director or
deputy general manager or other employee of an existing banker [147][***]
has, after the 10th day of February, 1958, and before the appointed day, been
paid any sum by way of compensation or gratuity. the subsidiary bank concerned
shall be entitled to claim a refund of any sum so paid if the payment is not
confirmed by the State Bank by a general or special order. (4)
Nothing in
this section shall apply to, or in relation to, any officer or other employee
of the Bank of Patiala, who does not become an officer or other employee of the
State Bank of Patiala under the provisions of section 11. (1)
A subsidiary
bank may, subject to such limitations and conditions as may be prescribed,
appoint such number of officers, advisers and employees as it consid?ers
necessary or desirable, for the efficient performance of its functions and on such
terms and condi?tions us it may deem fit. [148][(1A) The officers, advisers and employees of the subsidiary bank
concerned shall individually or jointly, or with other officers, advisers and
employees in a committee exercise such powers and perform such duties as may,
by general or special order, be entrusted or delegated to them by the Board of
Directors or its Executive Committee.] (2)
For the
removal of doubts, it is hereby declared that the officers, advisers and
employees of a subsidiary bank, in whatever capacity engaged, shall not be
deemed to be officers, advisers or employees of the State Bank for any purpose,
unless otherwise provided in the contract or agreement of service of any such
officer, adviser or employee. [149][50A. Bonus (1)
No officer,
adviser or other employee other than an employee within the meaning of clause
(13) of section 2 of the Payment of Bonus Act. 1965] of a subsidiary
bank shall be entitled to be paid any bonus. (2)
No employee
of a subsidiary bank, being an employee within the meaning of clause (13)
of section 2 of the Payment of Bonus Act, 1965, shall be entitled to
be paid any bonus except in accordance with the provisions of that Act. (3)
The
provisions 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 Industrial
Disputes Act, 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.] Notwithstanding
anything to the contrary contained in any other law for the time being inforce,
a subsidiary bank may establish and maintain super annuaton pension, provident
or other funds for the benefit of its officers or employees or the dependants
of such officers or employees or for the purposes of the subsidiary bank, and
grant super annuation allowances, annuities and pensions payable out of any such
fund. (1)
A subsidiary
bank shall observe, except as otherwise required by law, the practices and
usages customary among bankers, and in particular, it shall not 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 that bank to divulge such
information. (2)
Every
director, auditor, adviser officer or other employee of a subsidiary bank
shall, before entering upon his duties, make a declaration of fidelity and
secrecy as in the form set out in the Second Schedule: [150]"(3) Nothing contained in this section shall apply to the credit
information disclosed under the Credit Information Companies (Regulation) Act,
2005.". Provided
that any declaration made under sub-section (2) of section 35 of the State Bank
of Hyderabad Act shall be deemed to be declaration made to the Hyderabad Bank
under this sub-section. (1)
Every
director of a subsidiary bank shall be indemnified by that bank against all
losses and expenses incurred by him in, or in relation to, the discharge of his
duties except such us are caused by his own willful act or default. (2)
A director
of a subsidiary bank shall not be responsible for any loss or expense caused to
the bank by the insufficiency or deficiency of the value of, or title to, any
properly or security acquired or taken on behalf of the bank or by the insolvency
or wrongful act of any customer or debtor or by anything done in, or in
relation to, the execution of the duties of his office or otherwise than for
his willful act or default. (3)
"[Where
the State Bank nominates any of its officers as director of a subsidiary Bank,
such director 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 discharge of his duties as director or anything in relation thereto.] (1)
No actor
proceeding of the Board of Directors of a subsidiary bank shall be questioned
on the ground merely of the existence of any vacancy in, or defect in the
constitution of, the Board. (2)
All acts
done by any person acting in good faith as a director of a subsidiary bank
shall, notwithstanding that be was disqualified to be a director or that there
was any other defect in his appoint?ment, be deemed to be valid. Subject to
the provisions of this Act and unless the Central Government by notification in
the Official Gazette, otherwise, directs, on and from the appointed day, the
provisions of the Companies Act 1956, and the [151][Banking
Regulation Act], 1949, shall not apply to an existing bank in so far as the
said provisions impose any obligation on, or require anything to be done by,
any such bank. The State
Bank of Patiala [152][***]
shall be entitled to recover in the same manner as an arrear of land revenue
any moneys due in respect of loans or advances made before the appointed day by
the Bank of Patiala [153][***]
and. the provisions of any law relating to such recovery as were applicable to
that bank before the appointed day shall continue to apply to the State Bank of
Patiala [154][***],
in respect of such recovery after the appointed day. No provision
of law relating to the winding up of companies shall apply to a subsidiary bank
nor shall it be placed in liquidation, save as provided in this Act or by order
of the Central Government and in such manner as the Central Government may
direct. Notwithstanding
anything contained in this Act or in any other law for the time being in force
or in any contract or other instrument an existing bank shall, on such date as
the Central Government may, by notification in the Official Gazette, specify in
this behalf, stand dissolved. [155][59. Construction Of References to Existing Banks (1)
For the
purposes of sections 45, 49.55, 58 and the First Schedule, the expression
'existing bank' shall include the Bank of Jaipur Limited. (2) Except as
otherwise provided in any general or special order made by the Central
Government any reference in any law, other than this Act, or in any contract or
other instrument. (a)
to an
existing bank, shall be construed as a reference to the corresponding new bank; (b)
to the Bank
of Jaipur Limited, shall be construed as a reference to the State Bank of
Bikaner.] Any powers,
duties or functions conferred, imposed or entrusted by this Act on, or to, the
Reserve Bank, shall be exercised, or performed by the Governor of the Reserve
Bank or, in his absence, by a Deputy Governor nominated under sub-section (3)
of section 7 of the Reserve Bank of India Act, 1934, or by such
officer or officers of the Reserve Bank in respect of such matters and subject
to such conditions and limitations as the Governor of the Reserve Bank may
specify. (1)
No suit or
other legal proceeding shall lie against the Central Government, the Reserve
Bank or the State Bank or any officer of the Central Government, the Reserve
Bank or the State Bank for any damage caused or likely to be caused by anything
which is in good faith done or intended to be done in pursuance of this Act. (2)
No person
shall have any right, whether in contract or otherwise, to any compensation for
any loss incurred or any damage caused by reason of the operation of, or
anything done in pursuance of, the provisions contained in sections 46 and 47. (1)
The Central
Government may, by notification in the Official Gazette. [make rules to provide
for all matters for which provision is neces?sary 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
rules may provide for. (a)
the terms
and conditions of service of the Chairman, members and staff of the Tribunal; (b)
the manner
of and the procedure for payment of compensation (including allotment of shares
in lieu of compensation under this Act, including the requirements subject to
which the pay?ment shall be made: (c)
the
determination of the persons to whom compensation shall be payable in all cases
including cases where shares have been held by more than one person, or where
they have been trans?ferred before the appointed day, bill the transfer has not
been registered or where the share?holder is dead; (d)
the
circumstances under which claims for payment of the said compensation from
persons claiming through or under a shareholder may be entertained; (c) the requirements
to be complied with before receipt of the said compensation by a shareholder,
whose share certificate has been lost, destroyed, mutilated or stolen. (e)
the
requirements subject to which information regarding the payment of the said
compensation may be granted or refused and the conditions subject to which such
information may be given. (f)
[the manner
of appointment of a director under clause (ca) or clause (cb) of sub-section
(1) of section 25, and all other matters connected therewith or incidental
thereto.] (3)
[Every rule
made under this section 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 com?prised 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 session aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should
not be made, the rule shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such medication
or annulment shall be without prejudice to the validity of anything previously
done under that rule.] [156][63. Power of subsidiary banks to make regulations. (1)
The Board of
Directors of a subsidiary bank may, after consultation with the State Bank and
the Reserve Bank and with the previous approval of the Central Government, by
notification in the official Gazette, make regulations not inconsistent with
this Act and the rules made thereunder, to provide for all matters for which
provision is necessary or expedient for the purpose of giving effect to the
provisions of this Act or any other law for the time being in force. (2)
In
particular, and without prejudice to the generality of the foregoing power,
such regulations may provide for. (a)
the powers
and duties of the managing director of the subsidiary bank; (b)
the fees and
allowances which may be paid to directors or others for attending any meetings
of the Board of Directors or of its committees (including the executive
committee) or other committees or for attending to any other work of the
subsidiary bank; (c)
the time and
place at which, and the manner in which the business of the Board of Directors
of the subsidiary bank shall be transacted and the procedure to be followed at
the meetings thereof; (d)
the
constitution of the executive committee of the subsidiary bank and the
conditions and limitations subject to which the executive committee may
exercise its powers and the procedure to be followed at the meetings thereof; (e)
the
formation of any other committees, whether of the Board of Directors of the
subsidiary bank or otherwise, and the delegation of powers and functions of the
Board to such committees and the conduct of business in such committees; (f)
the nature
of shares of the subsidiary bank, the manner in which, and the conditions
subject to which, shares may be held and transferred and generally all matters
relating to the rights and duties of shareholders; (g)
the
procedure for issuing the certificates of shares; (h)
the procedure
with respect to increase, whether by public issue or rights issue or by
preferential allotment or private placement, the issued capital by issue of
equity or preference shares; (i)
the manner
of acceptance of share money in instalments, the manner of making calls and the
manner of forfeiture of unpaid shares and their re-issue; (j)
the
maintenance of share registers, and the particulars to be entered in such
registers in addition to those specified in sub-section (1) of section 21, the
safeguards to be observed in the maintenance of the register of shareholders on
computer floppies or diskettes or any other electronic form, the inspection and
closure of the registers and all other matters connected therewith; (k)
the manner
in which every individual registered shareholder nominate, an individual to
whom all his rights in the shares shall vest in the event of his death under
sub-section (1) of section 18A; (l)
the manner
in which, the joint holders may nominate an individual to whom all their rights
in the shares shall vest in the event of the death of all the joint holders
under sub-section (2) of section 18A; (m)
the manner
in which nomination is varied or cancelled under subsection (3) of section 18A; (n)
the manner
in which every individual registered as the holder of the shares to make
nomination where nominee is a minor to appoint, any person to become entitled
to the shares in the event of his death during the minority of the nominee
under sub-section (4) of section 18A; (o)
the holding
and conduct of elections under this Act and the final determination of doubts
or disputes regarding the qualifications of candidates for election or
regarding the validity of elections; (p)
the manner
in which general meeting shall be convened, the procedure to be followed
thereat and the manner in which voting rights may be exercised; (q)
the manner
in which notices may be served on behalf of the subsidiary bank upon
shareholders or other persons; (r)
the payment
of dividends including interim dividends; (s)
the
delegation of powers and functions of the Board of Directors of the subsidiary
bank to the managing director or directors or officers or other employees of
that bank; (t)
the
conditions and limitations subject to which the subsidiary bank may appoint
officers, advisers and other employees and fix their remuneration and other
terms and conditions of service; (u)
the duties
and conduct of officers, advisers and other employees of the subsidiary bank; (v)
the
establishment and maintenance of superannuation, pension, provident or other
funds for the benefit of the officers or employees of the subsidiary bank or of
the dependants of such officers or employees or for the purposes of the
subsidiary bank, and the granting of superannuation allowances, annuities and
pensions payable out of any such fund; (w)
the conduct
and defence of legal proceedings by or against the subsidiary bank and the
manner of signing pleadings; (x)
the
provision of a seal for the subsidiary bank and the manner and effect of its
use; (y)
the form and
manner in which contracts binding on the subsidiary bank may be executed; (z)
the
conditions and requirements subject to which loans or advances may be made or
bills may be discounted or purchased by the subsidiary bank; (za) the conditions subject to which loans or advances may be made by
the subsidiary bank to its directors or officers or the relatives of such
directors or officers or to companies, firms or individuals with which or with
whom such directors or officers or relatives are connected as partners,
directors, managers, servants, shareholders or otherwise; (zb) the persons or authorities who shall administer any pension,
provident or other fund constituted for the benefit of the officers or
employees of the subsidiary bank or their dependants or for the purposes of
that bank; (zc) the circumstances in which the specific approval of the State Bank
shall be required to the grant of loans and advances or investment of funds by
the subsidiary bank or to any contract, arrangement or proposal entered into or
proposed to be entered into by the subsidiary bank; (zd) the preparation and submission to the State Bank and the Reserve
Bank of statements of programmes of activities and financial statements of the
subsidiary bank and the periods for which, and the time within which such
statements and estimates are to be prepared and submitted; (ze) generally, for the efficient conduct of the affairs of the
subsidiary bank. (3)
All
regulations made under this section shall have effect from such earlier or
later date as may be specified in the regulations. (4)
Every
regulation shall, as soon as may be after it is made under this section by the
Board of Directors of a subsidiary bank, be forwarded to the Central Government
and that Government shall cause a copy of 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 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.] [Repeated by
Repealing and Amendment Act, 1964 (52 of 1964), Section 2 and Sch. 1
(29-12-1964.)] Nothing in
this Act shall be deemed to affect the provisions of section 35 of
the State Bank of India Act, 1955. THE FIRST SCHEDULE (Sec sections 13 and 14) PRINCIPLES OF COMPENSATION 1.
A. The
compensation to be given by the State Bank shall in the case of the Hyderabad
Bank, [157][or
the Bank of Patiala], be an amount equal to the value of the assets of that
bank as on the day immediately before the appointed day, computed in accordance
with the provisions of Part 1 of this paragraph less the total amount of
liabilities thereof computed in accordance with the provisions of Part II of
this paragraph. B. The total compensation to be given by the State Bank in respect of
the transfer of the shares in the capital of the existing banks, other than the
Bank of Patiala to the persons (including any State Government) who,
immediately before the appointed day, are registered as holders of shares in
the books of each of these banks shall, in each case, be an amount equal to the
value of the assets of that bank as on the day immediately preceding the
appointed day in relation to the corresponding new bank, computed in accordance
with the provisions of Part 1 of this paragraph less the total amount of liabilities
thereof computed in accordance with the provisions of Part II of this
paragraph. PART I Assets For the
purposes of this paragraph, assets means the total of the following. (a)
the amount
of cash in hand and with the Reserve Bank and the State Bank (including foreign
currency notes which shall be converted at the market rate of exchange). (b)
the amount
of balances with any other bank, not being the Reserve Bank or the State Bank,
whether on deposit or current account, and money at call and short notice,
balances held outside India being converted at the market rule of exchange:
Provided that any balances which arc not realisable in full shall be deemed to
be debts and valued accordingly. (c)
the market
value us on the appointed day of any securities, shares, debentures, bonds and
other investments, held by the bank concerned: Explanation.
For the purposes of this clause, (i)
securities
of the Central and State Governments (other than the securities specified in
sub-clauses (ii) and (iii) of this Explanation) maturing tor redemption within
five years from the appointed day shall be valued at the face value or the
market value whichever is higher; (ii)
securities
of the Central Government, such as Post Office Certificates and Treasury
Savings Deposit Certifi?cates and any other securities or certificates issued
or to be issued under the Small Savings Scheme of the Central Government, shall
be valued at their face value or the encashable value as on the appointed day.
whichever is higher; (iii)
where the
market value of any Government security such as the zamindari abolition bonds
or other similar security in respect of which the principal is payable in
installments, is not ascertainable or is, for any reason, not considered as
reflecting the fair value thereof or as otherwise appropriate, the security
shall be valued of such an amount as is considered reasonable having regard to
the installments of principal and interest re?maining to be paid, the period
during which such Installments are payable, the yield of any security ,issued
by the Government to which the security pertains and having the same or
approximately the same maturity, and other relevant factors; (iv)
where the
market value of any security, share, debenture, bond or other investment is not
considered reason-able by reason of its having been affected by abnormal
factors, the investment may be valued on the basis of its average market value
over any reasonable period; (v)
where the
market value of any security, share, debenture, bond or other investment is not
ascertainable, only such value, if any, shall be taken into account as is
considered reasonable having regard to the financial position of the issuing
concern, the dividend paid by it during the preceding five years and other
relevant factors: (d)
the amount
of advances (including loans, cash credits, overdrafts, bills purchased and
discounted), and other debts, whether secured or unsecured, to the extent to
which they are reasonably considered recoverable, having regard to the value of
the security, if any, the operations on the account, the reported worth and
respectability of the borrower, the prospects of realisation and other relevant
considerations; (e)
the market
value of any land or buildings; (f)
the total
amount of the premia paid, in respect of all leasehold properties, reduced in
the case of each such premium by an amount which bears to such premium the same
proportion as the expired term of the lease in respect of which such premium
shall have been paid hours to the total term of the lease; (g)
the written
down value us per hooks, or the realisable value, as may be considered
reasonable, of all furniture, fixtures and fittings; (h)
the market
or realisable value, us may be appropriate, of other assets appearing on the
books of the bank, no value being allowed for capitalised expenses, such us
share selling commission, organisational expenses and broker?age, losses
incurred and similar other items. PART II Liabilities 1.
For the
purposes of this paragraph, "liabilities" means the total amount, of
all outside liabilities existing on the appointed day and all contingent
liabilities which the subsidiary bank concerned may reasonably be expected to
be re?quired to meet out of its own resources on or after the appointed day. COMPENSATION PAYABLE TO
SHAREHOLDERS 2.
Every
shareholder of an existing bank other than the Bank of Patiala shall be given
such amount as compensation as bears to the total compensation, in respect of
each of the said banks calculated in accordance with the provisions of
paragraph 1, the same proportion as the amount of the paid-up capital of the
share held by the shareholder hears to the total paid-up capital of that bank. CERTAIN DIVIDENDS NOT TO BE TAKEN
INTO ACCOUNT 3.
So separate
compensation shall be payable for any profits or any dividend an respect of any
period immediately preceding the appointed day for which, in the ordinary
course, profits would have been transferred or dividend declared after the
appointed day. THE SECOND SCHEDULE (See section 52). 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, auditor, adviser, officer or employee, us the cast may be) of the
State Bank of ??????????...... and which properly relate to the office or
position held by me in, or in relation to the said 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 State Bank of
??????????...... or to the affairs of any person having any dealing with the
said bank nor will I allow any such person to inspect or have any access to any
books or documents belonging to, or in the possession of the State Bank of??????????.....
and relating to the business of the said bank or to the business of any person
having any dealing with the said Bank. Here enter
the name of the subsidiary bank concerned. THE THIRD SCHEDULE (See section 64) Amendments
to certain enactments. [Repealed by the Repealing and Amending Act, 1964 (52 of
1964). section 2 and Schedule. I (29-2-1964).] Note.
Amendments made by the Schedule to the various Banking Laws have been
incorporated in the respective Acts. Statement of
Objects and Reasons - STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959
[REPEALED] STATEMENT OF OBJECTS AND REASONS 1.
The future
of certain major State-associated banks which tare owned in part by the State
Governments or with which such Governments have been closely associated has
been under consideration for some time. The question has recently been
comprehensively re-examined, with particular reference to the necessity for
making adequate and proper provision for the management of treasuries and
sub-treasuries in the areas served by these banks and the need for the
expansion of these banks in these areas; and the views of the banks themselves
have been ascertained. 2.
The
managements and shareholders of the Bank of Bikaner, the Bank of Indore, the
Bank of Jaipur, the Bank of Mysore and the Travancore Bank have agreed to the
proposal to reconstitute these banks as subsidiaries of the State Bank; and the
Governments, of Bombay and the Punjab as well as the Reserve Bank of India have
agreed to the reconstitution on similar lines of the State Bank of Saurashtra,
the Bank of Patiala and the State Bank of Hyderabad respectively. 3.
The scheme
for reconstitution provides for the transfer to and vesting in the State Bank
of India of the share capital of each of the eight banks which have accepted
the proposals. Compensation will be payable to the existing shareholders
(including a State Government or the Reserve Bank of India as the case may be)
on the basis of the excess of the assets over the liabilities, representing the
real value of the paid-up capital. Such compensation will be determined, in the
event of a dispute, by an impartial tribunal, in accordance with the principles
indicated in the Bill. 4.
Provision is
being made for minority shareholding, by private shareholders up to 45 per
cent. of the issued capital, in the erase of each of the reconstituted banks.
The management and administration of the reconstituted institutions will be
entrusted to Boards of directors on which the State Bank of India will be
adequately represented. The other provisions made in the Bill are generally
based on those contained in the State Bank of India Act, 1955. [1] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "(iv) in relation to me Saurashtra Bank, the date on
which the amendments to the Saurashtra State Banks (Amalgamation) Ordinance,
1950, take effect under Part V of the Third Sched?ule:" [2] Omitted by
the State Bank of India (Subsidiary Banks) Amendment Act, 2011 w.e.f.
01.06.2011 previous text was. "(ii) in relation to the State Bank of Indore, the
Bank of Indore, Limited;" [3] Omitted by
the State Bank of India (Subsidiary Banks) Amendment Act, 2011? w.e.f. 01.06.2011 previous text was. "(ii) in relation to the Bank of Indore, Limited,
the State Bank of Indore;" [4] Omitted by
the State Bank of India (Subsidiary Banks) Amendment Act, 2011 w.e.f.
01.06.2011 previous text was. "(ii) Bank of Indore, Limited;" [5] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "(i) "Saurashtra Bank" means the State
Bank of Saurashtra constituted under the Saurashtra State Banks (Amalgamation)
Ordinance, 1950;" [6]? Omitted by the State Bank of Saurashtra
(Repeal) and the State Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f.
01.06.2010 previous text was :- "and the Saurashtra Bank." [7] Inserted
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 20 w.e.f.
1-7-1974. [8] Heading of Chapter II substituted and clause (c) omitted by
the State-Associated Banks (Miscellaneous Provisions ) Act, 1962 (56
of 1962) Section 3 w.e.f. 14-12-1962. [9] Omitted by the State Bank of India (Subsidiary Banks) Amendment
Act, 2011 w.e.f. 01.06.2011 previous text was. (b) the
State Bank of Indore; [10] Heading of Chap. II substituted and clause (c) omitted by
the State-Associated Banks (Miscellaneous Provisions ) Act, 1962 (56
of 1962). Section 3 w.e.f. 14-12-1962. [11] Inserted by the State-Associated Banks (Miscellaneous Provisions)
Act, 1962 (56 of 1962), Section 3 w.e.f. 14-12-1962. [12] Substituted for the following by the State Bank of India
(Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) for the
following ; - "(1)
Subject to the provisions of this Act, the authorised capital of the State Bank
of Mysore and the State Bank of Travancore shall be rupees two crores each. and
the authorised capital of every other new bank shall be rupees one crore. (2) The
authorised capital of every new bank shall be divided into shares of one
hundred rupees each. (3)
Notwithstanding anything contained in this section, the State Bank may, with
the approval of the Reserve Bank, authorise a new bank to increase or reduce
its authorised capital; Provided
that where the authorised capital is so increased, the shares issued shall be
of the de?nomination specified in sub-section (2)." [13] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following :- "with
the approval of the Reserve Bank" [14] Inserted
by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No.
30 of 2007). [15]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following :- " with the approval of the Reserve Bank" [16]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(4) Without prejudice to the provision contained in
sub-section (3) a new bank may, with the approval of the State Bank and the
Reserve Bank, increase from time to time, its issued capital and the capital so
increased shall consist of fully paid-up shares to be issued in such manner as
the State Bank may, with the approval of the Reserve Bank, direct. (5) No increase or reduction in the issued capital of a
new bank shall be made in such a manner that the State Bank holds at any time
less than fifty-five per cent of the issued capital of that bank" [17]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following :- " with the approval of the State Bank and the
Reserve Bank" [18]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following :- " public issue" [19] Substituted
by the The State Bank of India (Subsidiary Banks Laws) Amendment Act, 2011 (Act
No. 17 of 2011) for the following :- " with the approval of the State Bank and the
Reserve Bank" [20]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following :- " with the approval of the Reserve Bank" [21] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f 1-7-1974. [22] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f 1-7-1974. [23] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f 1-7-1974. [24] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f 1-7-1974. [25] Inserted by the State-Associated Banks (Miscellaneous Provisions)
Act, 1962 (56 of 1962), Section 3 w.e.f. 1-1-1963. [26] Substituted for form sub-section (13) by the State Associated Banks
(Miscellaneous Provisions) Act, 1962 (56 of 1962), Section
3 w.e.f. 1-1-1963. [27] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "the [State Government of Gujarat] in respect of the
Saurashtra Bank" [28] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "the [State Government of Gujarat]" [29] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "or the [State Government of Gujarat]" [30] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "the [State Government of Gujarat]" [31] Omitted by
the State Bank of Saurashtra (Repeal) and the State Bank of India (Subsidiary
Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous text was :- "the [State Government of Gujarat]" [32]
Substituted for "State Government of Bombay" by the Bombay
Reorganisation (Adaptation of Laws on Union Subjects) Order, 1961 w.e.f.
1-5-1960. [33] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words "fifty-five
per cent, of the issued capital" [34] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [35] Substituted for the following by the State Bank of India
(Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) "19 - Restriction On Individual Holdings. (1) No person shall be registered as a shareholder in respect of any
shares in a subsidiary bank held by him, whether in his own name or jointly
with any other person, in excess of two hundred shares, or be entitled to
payment of any dividend on the excess shares held by him, or to exercise any of
the rights of a shareholder in respect of such excess shares otherwise than for
the purpose of selling them. Provided that nothing contained in this sub-section shall apply to (a) the State Bank; (b) a State Government; (c) a Corporation; (d) an insurer as defined in the Insurance Act, 1938 (e) a local authority. (f) a co-operative society; (g) a trustee of a public or private religious or charitable trust; (h) a
shareholder of an existing bank who is allotted any shares under sub-section
(9) of section 13; (2)
Notwithstanding anything contained in sub-section (1) no person referred to in
the proviso to that sub-section, other than the State Bank, shall be entitled
to exercise voting rights in respect of any shares held by such person [in
excess of one per cent.] of the issued capital Of the subsidiary bank
concerned." [36] Omitted by the Banking Laws (Amendment) Act, 2012 for the
following. "and
the Banking Companies Act, 1949 (10 of 1949)" [37] Renumbered by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [38] Inserted by Depositories Related Laws (Amendment) Act (8 of
1997) Section 6 (w.r.e.f. 15-1-97). [39] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [40] Inserted by Depositories Related Laws (Amendment) Act (8 of
1997) Section 7 (w.r.e.f. 15-1-97). [41] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words
"Notwithstanding anything contained in section. 19, no notice of any
trust" [42] Inserted by Depositaries Related Laws (Amendment) Act (8 of
1997) Section 8 (w.r.e.f. 15-1-97). [43] Substituted by the State Bank of Saurashtra (Repeal) and the State
Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010
previous text was:- "the
Hyderabad Bank and the Saurashtra Bank" [44] Substituted by the State Bank of Saurashtra (Repeal) and the State
Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010
previous text was:- "the
Hyderabad Bank or the Saurashtra Bank" [45] Substituted fur the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [46]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(a) the chairman for the time being of the State
Bank, ex officio;" [47]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following:- "with the approval of the Reserve Bank" [48] Inserted
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973). Section 22
w.e.f.1-7-1974. [49]? Substituted for the following by the State
Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(b) an officer of the Reserve Bank, to be nominated
by that Bank;" [50]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following:- " to be nominated by the Reserve Bank" [51] Inserted
by Banking Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act (66 of 1988), Section 18 w.e.f. 30-12-88. [52] Inserted
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973). Section 22
w.e.f.1-7-1974. [53]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(d) two directors to be elected in the prescribed
manner by the shareholders, other than the State Bank: Provided that if the total amount of the holdings of all
such shareholders registered in the books of the subsidiary bank three months
before the date fixed for election is below five per cent of the total issued
capital, or if there are no shareholders other than the State Bank registered
on the bonks of the subsidiary bank, the directors to be elected by the
shareholders shall be nominated by the State Bank and such directors shall, for
the purposes of this Act, be deemed to be directors elected under this
clause;" [54] Words
"in consultation with the State Bank" Omitted, by Banking Public
Financial Institutions and Negotiable Instruments Laws (Amendment) Act (66 of
1988), Section 18 w.e.f 30-12-88. [55] Omitted by
the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30
of 2007). Prior to omission the text was as follows: "(3) If, for any reason, a director of a subsidiary
bank nominated under clause (b) of sub-sec?tion (1) is unable to exercise his
functions or to discharge his duties as such director, the Reserve Bank may
nominate any of its officers to exercise all the functions and to discharge all
the duties of such director whenever be is so unable 10 exercise his functions
or discharge his duties, and the officer so nominated shall for all purposes of
this Act be deemed to be a director of the subsidiary bank." [56] Omitted
the words "the Reserve Bank or" by the State Bank of India
(Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007). [57]
Substituted by the The State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2011 (Act No. 17 of 2011) for the following:- " in consultation with the Reserve Bank" [58] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [59] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [60]
Substituted for portion beginning with words "if nominated "and
ending with "that sub-section" by Banking Public Financial
Instructions and Negotiable Instruments Laws (Amendment) Act (66 of 1988)
Section 19 w.e.f. 30-12-88. [61]
Substituted for "nominating", by Banking Public Financial
Instructions and Negotiable Instruments Laws (Amendment) Act (66 of 1988)
Section 19 w.e.f. 30-12-88. [62]
Substituted, by Banking Public Financial Instructions and Negotiable
Instruments Laws (Amendment) Act (66 of 1988) Section 19 w.e.f. 30-12-88.. [63] The
following words "and thereafter until his successor is duly elected"
are omitted by the Banking Companies (Acquisition and Transfer of Undertakings)
and Financial Institutions Laws (Amendment) Act, 2006, w.e.f. 16.10.2006. [64]? Omitted by the State Bank of India
(Amendment) Act, 2010 (Act No. 27 of 2010) w.e.f. 15.09.2010 for the following. "[and thereafter until his successor shall have been
duly appointed]," [65]
Sub-section (3) omitted, by Banking Public Financial Instructions and
Negotiable Instruments Laws (Amendment) Act (66 of 1988) Section 19 w.e.f.
30-12-88.. [66] Inserted by the State Bank Laws (Amendment) Act, 1973 (48 of
1973). Section 24 (1-7-1974). [67] Substituted for the words "provided further that," by
the State Bank Laws (Amendment) Act, 1973 (48 of 1973). Section 24
w.e.f.1-7-1974. [68] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words and figures
"Banking Companies Act, 1949" [69]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [70]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2011 (Act No. 17 of 2011) for the following. "and with the approval of the Reserve Bank" [71]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [72]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [73]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [74]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [75]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [76]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2011 (Act No. 17 of 2011) for the following. "with the approval of the State Bank and the Reserve
Bank" [77]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2011 (Act No. 17 of 2011) for the following. "with the approval of the Reserve Bank" [78]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2011 (Act No. 17 of 2011) for the following. "with the approval of the Reserve Bank" [79]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [80]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2011 (Act No. 17 of 2011) for the following. "with the approval of the Reserve Bank" [81]
Substituted for the words "general manager" by State Bank Laws
(Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [82] Inserted by the State Bank Laws (Amendment) Act, 1973 (48 of
1973), Section 25 w.e.f.1-7-1974. [83] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "with
the approval of the Reserve Bank" [84] Substituted for the words, brackets and letter "nominated under
clause (e)" by the State Bank Laws (Amendment) Act. 1973 (48 of
1973), Section 26 w.e.f.1-7-1974. [85] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "with
the approval of the Reserve Bank" [86] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [87] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [88] Substituted for the words "general manager" by the State
Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 21 w.e.f. 1-7-1974. [89] Inserted by the State Bank Lows (Amendment) Act, 1973 (48 of
1971), Section 27 w.e.f.1-7-1974. [90] Substituted for the words "under this section," by the State
Bank Lows (Amendment) Act, 1973 (48 of 1971), Section 27 w.e.f.1-7-1974. [91] Substituted for the words "under this section," by
the State Bank Lows (Amendment) Act, 1973 (48 of 1971), Section 27
w.e.f.1-7-1974. [92]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(1) The Board of Directors of a subsidiary bank
shall meet at such time and place and shall observe such rules of procedure in
regard to the transaction of business at its meetings as may be
prescribed." [93]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2007 (Act No. 30 of 2007) for the words "The chairman of the State
Bank". [94]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(3) All questions at a meeting of the Board of
Directors of a subsidiary bank shall be decided by a majority of the votes of
the directors present, and in case of equality of votes, the person presiding
at the meeting shall have a second or casting vote." [95]
Substituted for former proviso by the State-Associated Banks (Miscellaneous
Provisions) Act, 1962 (56 of 1962), S. 3(vii) 14-l2-1962. [96]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2007 (Act No. 30 of 2007) for the the words, brackets and letter "of the
Reserve Bank or the State Bank nominated under clause (b) or clause (c)" [97] Inserted
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 28
w.e.f.1-7-1974. [98] Inserted
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 28
w.e.f.1-7-1974. [99] Omitted
the words "and the Reserve Bank" by the State Bank of India
(Subsidiary Banks Laws) Amendment Act, 2007 (Act No. 30 of 2007) [100] Inserted by State Bank of India (Subsidiary Banks Laws) Amendment
Act, 2007 (Act No. 30 of 2007). [101] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "Where
the Reserve Bank, on the recommendation of the State Bank" [102] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank may" [103] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank may" [104] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank" [105] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the Reserve
Bank" [106] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank may" [107] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank" [108] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank" [109] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "the
Reserve Bank" [110] Sub-sections (3) and (4) omitted by the State-Associated Banks
(Miscellaneous Provisions) Act, 1962 (56 of 1962), Section 3.(viii)
w.e.f. 14-12-62. [111] Inserted by the Banking Laws (Amendment) Act, 1983 (1 of
1984), Section 49 w.e.f. 15-2-1984. [112] Substituted for sub-section(1) by the State Bank Laws (Amendment)
Act, 1973 (43 of 1973), Section 29 w.e.f. 31-12-1973. [113] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words and figures
"Banking Companies Act, 1949" [114] Inserted by the Banking Law, (Amendment) Act, 1983 (1 of
1984), Section 50 w.e.f. 15-2-1984. [115] Inserted by the State Bank Laws (Amendment) Act, 1973 (48 of
1973), Section 30 w.e.f. 31-12-1973. [116] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the word "December" [117] Substituted for words "in each year" by Banking, Public
Financial Institutions and Negotiable Instruments Laws (Amendment) Act (66
of 1988), Section 20 w.e.f..30-12-88. [118] Inserted by Banking Public Financial Institutions and Negotiable
Instruments Laws (Amendment) Act (16 of 1988) Section 20 w.e.f. 30-12-88. [119] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [120] Substituted for the words "exhibit a true unit correct view"
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 31
w.e.f. 31-12-1973. [121] Inserted, by the State Bank Laws (Amendment) Act, 1973 (48 of
1973), Section 31 w.e.f. 31-12-1973. [122] Substituted by the State Bank of Saurashtra (Repeal) and the State
Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was. "the
Hyderabad Bank or the Saurashtra Bank" [123]
Substituted for the words "and the Reserve Bank by the Banking Laws
(Amendment) Act, 1983 (1 of 1984) Section 51 w.e.f. 15-12-1984. [124]
Substituted for the words "within three months from the date on which its
accounts are closed and balanced" by the State Bank Laws (Amendment) Act,
1973 (48 of 1971). Section 32 w.e.f. 31-12-1973. [125]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2007 (Act No. 30 of 2007) for the word "December" [126] Inserted
by Act 1 of 1984, Section 51 w.e.f. 15-12-1984. [127] Inserted
by Act 48 of 1973 Section 32 w.e.f. 31-12-1973. [128]
Substituted for the following by the State Bank of India (Subsidiary Banks
Laws) Amendment Act, 2007 (Act No. 30 of 2007) "(2) The balance sheet and the profit and loss
account of a subsidiary bank shall be signed by the general manager and a
majority of the directors of the subsidiary bank." [129] Inserted
by Banking, Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act (66 of 1988) Section 21 w.e.f. 30-1-88. [130] Words
"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" omitted by
Banking Laws (Amendment) Act (81 of 1985), Section 3 w.e.f. 1-5-86, [131]
Substituted for the words "annually before the end of March" by the
State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 33 w.e.f.
31-12-1971. [132] Inserted,
by the State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 33 w.e.f.
31-12-1971. [133]
Substituted for the words "the State Bank, or to the Reserve Bank by the
Banking Laws (Amendment) Act, 1983, (1 of 1984), Section 52 w.e.f.15-2-1984. [134] Substituted
by the State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007 (Act No.
30 of 2007) for the words "discuss the balance sheet" [135] Inserted
by Banking, Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act (66 of 1998), Section 22 w.e.f .30-12-88. [136]
Substituted for the words "annually before the end of March" by the
State Bank Laws (Amendment) Act, 1973 (48 of 1973), Section 33 w.e.f.
31-12-1971. [137] Inserted,
by the Banking Laws (Amendment) Act, 1983, (1 of 1984), Section 52
w.e.f.15-2-1984. [138] Inserted,
by the Banking Laws (Amendment) Act, 1983, (1 of 1984), Section 52
w.e.f.15-2-1984. [139]
Substituted by the State Bank of India (Subsidiary Banks Laws) Amendment Act,
2007 (Act No. 30 of 2007) for the word "December". [140] Inserted
by Banking, Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act (66 of 1998), Section 22 w.e.f .30-12-88. [141] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was:- "or the
Saurashtra Bank" [142] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was:- "Explanation.
For the purposes of this section, "Board of Directors' in relation to the
Saurashtra Bank, means its Board of Management." [143] Substituted by the State Bank of Saurashtra (Repeal) and the State
Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010
previous text was:- "the
Hyderabad Bank or the Saurashtra Bank" [144] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words and figures
"Indian Income-tax Act, 1922" [145] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was:- "or the
Saurashtra Bank" [146] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was:- "or of
the Saurashtra Bank" [147] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was:- "or of
the Saurashtra Bank" [148] Inserted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) [149] Inserted by Baking Laws (Amendment) Act (64 of 1984), Section
3 w.e.f. 11-9-84. [150] Inserted vide Credit Information Companies (Regulation) Act, 2005 [151] Substituted by the State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2007 (Act No. 30 of 2007) for the words "Banking
Companies Act". [152] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was. "and
the Saurashtra Bank" [153] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was. "or the
Saurashtra Bank, as the case may be" [154] Omitted by the State Bank of Saurashtra (Repeal) and the State Bank
of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010 previous
text was. "or the
Saurashtra Bank, as the case may be" [155] Substituted for former Section 59 by the State-Associated Banks
(Miscellaneous Provisions) Act, 1962 (56 of 1962). Section
3 (ix) w.e.f. 1-1-1963. [156] Substituted by the The State Bank of India (Subsidiary Banks Laws)
Amendment Act, 2011 (Act No. 17 of 2011) for the following. "63.
Power of The State Bank to Make Regulations. [(1) The
Board of Directors of a subsidiary bank may, after consultation with the State
Bank and with the previous approval of the Reserve Bank, by notification in the
Official Gazette, make regulations not inconsistent with this Act and the rules
made thereunder, to provide for all matters for which provision is necessary or
expedient for the purpose of giving effect to the provisions of this Act or any
other law for the time being in force; (2) In
particular, and without prejudice to the generality of the foregoing power,
such regulations may provide for (a) the
powers and duties of the general manager of the subsidiary bank; (b) the fees
and allowances which may be paid to directors or others for attending any
meetings of the Board of Directors or of its committees (including the
executive committee) or other com?mittees or for attending to any other work of
the subsidiary bank; (c) the time
and place at which and the manner in which the business of the Board of
Directors of the subsidiary bank shall be transacted and the procedure to be
followed at the meeting thereof: (d) the
constitution of the executive committee of the subsidiary bank and the
conditions and limitations subject to which the executive committee may
exercise its powers and the procedure to be followed at the meetings thereof; (e) the
formation of any other committees, whether of the Board of Directors of the
subsidiary bank or otherwise, and the delegation of powers and functions of the
Board to such committees and the conduct of business in such committees; (f) the
nature of shares of the subsidiary bank, the manner in which and the conditions
subject to which shares may be held and transferred and generally all matters relating
to the rights and duties of shareholders; [(fa) the
procedure for issuing the certificates of shares; (fb) the
procedure with respect to increase, whether by public issue or by preferential
allotment or private placement, the issued capital by issue of equity or
preference shares; (fc) the
manner of acceptance of share money in installments the manner of making calls
and the manner of forfeiture of unpaid shares and their reissue;] [(g) the
maintenance of share registers, and the particulars to be entered in such
registers in addition to those specified in sub-section (1) of section 21, the
safeguards to be observed in the maintenance of the register of shareholders on
computer floppies or diskettes or any other electronic form, the inspection and
closure of the registers and all other matters connected therewith; (ga) the
manner in which every individual registered shareholder nominate, an individual
to whom ail his rights in the shares shall vest in the event of his death under
sub-section (1) of section 18A; (gb) the
manner in which, the joint holders may nominate an individual to whom all their
rights in the shares shall vest in the event of the death of all the joint
holders under sub-section (2) of section 18A; (gc) the
manner in which nomination is varied or cancelled under sub-section (3) of
section 18A; (gd) the
manner in which every individual registered as the holder of the shares to make
nomination where nominee is a minor to appoint, any person to become entitled
to the shares in the event of his death during the minority of the nominee
under sub-section (4) of section 18A;] (h) the
holding and conduct of elections under this Act and the final determination of
doubts or disputes regarding the qualifications of candidates for election or
regarding the validity of elections; (i) the
manner in which general meeting shall be convened, the procedure to be followed
thereat and the manner in which voting rights may be exercised; (j) the
manner in which notices may be served on behalf of the subsidiary bank upon
shareholders or other persons; (k) the
payment of dividends including interim dividends; (l) the
delegation of powers and functions of the Board of Directors of the subsidiary
bank to the general manager or directors or officers or other employees of that
bank; (m) the
conditions and limitations subject to which the subsidiary bank may appoint
officers, advis?ers and other employees and fix their remuneration and other
terms and conditions of service; (n) the
duties and conduct of officers, advisers and other employees of the subsidiary
bank; (o) the
establishment and maintenance of superannuation, pension, provident or other
funds for the benefit of the officers or employees of the subsidiary bank or of
the dependants of such officers or employees or for the purposes of the
subsidiary bank, and the granting of superannuation allowances, annuities and
pensions payable out of any such fund; (p) the
conduct and defence of legal proceedings by or against the subsidiary bank and
the manner of signing pleadings; (q) the
provision of a seal for the subsidiary bank and the manner and effect of its
use; (r) the form
and manner in which contracts binding on the subsidiary bank may be executed; (s) the
conditions and requirements subject to which loans or advances may be made or
bills may be discounted or purchased by the subsidiary bank; (t) the
conditions subject to which loans or advances may be made by the subsidiary
bank to its directors or officers or the relatives of such directors or
officers or to companies, firms or individuals with which or with whom such
directors or officers or relatives are connected as partners, directors,
managers, servants, shareholders or otherwise; (u) the
persons or authorities who shall administer any pension, provident or other
fund constituted for the benefit of the officers or employees of the subsidiary
bank or their dependants or for the purposes of that bank; (v) the
circumstances in which the specific approval of the State Bank shall be
required to the grant of loans and advances or investment of funds by the
subsidiary bank or to any contract, arrangement or proposal entered into or
proposed to be entered into by the subsidiary bank: (w) the
preparation and submission to the State Bank and the Reserve Bank of statements
of programmes of activities and financial statements of the subsidiary bank and
the periods for which, and the time within which such statements and estimates
are to be prepared and submitted; (x) the
person or persons in the State Bank by whom any powers, duties or functions
conferred, imposed or entrusted on or to the State Bank under this Act may be
exercised or performed; (y)
generally, for the efficient conduct of the affairs of the subsidiary bank. [(2A) All
regulations made under this section shall have effect from such earlier or
later date as may be specified in the regulations.] (3) All
regulations under this section, except the first regulations, shall be made in
consultation with the Board of Directors of the subsidiary bank concerned. [(4) Every
regulation shall, as soon as may be after it is [made under this section]
by the State Bank, be forwarded to the Central Government and that Government
shall cause a copy of 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 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 any?thing previously
done under that regulation.]" [157] Substituted by the State Bank of Saurashtra (Repeal) and the State
Bank of India (Subsidiary Banks) Amendment Act, 2009 w.e.f. 01.06.2010
previous text was:- "the
Bank of Patiala or the Saurashtra Bank"STATE BANK OF
INDIA (SUBSIDIARY BANKS) ACT, 1959 [REPEALED]
PREAMBLE