i i i the bankn~ g laws cal'1ei'jdmenx) bill, h"<t'78·· \' ' (lb'be/as in traduced in ipk s;3bha)l  1 page 6, 'g$st line 3, in sert the! marginal ci tat1on,-"10 of 11)49" 2 page 6, line 34,-" 1qr "c 1)" ~ "(1)" 3 page 12, aeainst line 48, in the marginal ci tation,-4 page 13, line 14,-:41 fo r " se c tjon " re ad " se c tions "  4a page ,-,:r,- line 2" for ~gist"'3tel ~ 'hagi te"' 5 page 1f), line 3,- -of fq:r h( 4) " ~ n( 2)'1 , page 18,-(1) aiainst line 5, losert tile marginal citat1on,-"21 of 1976" (ii) against line 7, omit tl-}e marginal citation,-"2 of 1976" 7 page 22, against l~e 38, insert the marginal citiation,-"23 of 1965" 8 page 28, line 33,-fq1: "it" ~ "its" 9 page 32, again st line 44, in the marginal ci tetion,-£qr "1940" ~ "1949" 10 page 38, l:1ne 11,-!q1: "se tcion " ~ "sa c tion " 11 page 43, line 27,~ fqr "the c 1 au se " ttaq "thi sci au se " 12 page 54, agadnst line 11) omit the marginal'citation,-" 1 of 1956" 13 page 55, against line 14, insert the marginal ci tation,-"14 of 1947" -14 page 55, in the margina~ heading to section 45,-fo r"re con s ti tu- " rs"ad "re con s ti tu tion ii 15 page 60, against line 2 from bottom, insert the marginal citation,-' "(z)" "1 of 1956"  1 &: cpa~ ~, line 1;-t ls2l "(x)" mad 17 page 67, line 15, -se ss,~(;m" !9r "succe ssi ve 18 page 67, line 19,-~ "succe s siva se ssion s" - "form" for "from" ~ new delhi, december 12, 1978  agrabayana 28, 1900 ( saka)  tile banking laws (amendment) bill 1978 arrangement of clauses chapter i p'reliminouy clausm1 short title  chapter ii amendments to the bankers' books evidence act, 18912 amendment of act 18 of 1891  chapter iii amendments to the reserve bank of hroia act, 19m3 amendment of section 45 4 amendment of section 45 i 5 insertion of new chapter after chapter iub 6 amendment of section 46b 7 amendment of section 58b 8 amendment of section 5se  chapter iv amendments to the banking regulation act, 19499 amendment of section 5 io substitution of "corresponding new bank" for "corresponding new bank constituted under section 3 of the :banking companies (acquisition and transfer of undertakings) act, 10'70" 11 change of name of "agricultural refinance corporation" 12 amendment of section 7 13 amendment of section 8 14 amendment of section lob 15 insertion of new section 10bb 16 substitution of new section for section loc 17 substitution of new section for section 18 18 amendment of section 19 19 amendment of section 20 20 amendment of sectio'l 22  clauses21 amendment of sections 24, 34a and 36ad 22 amendment of section 29 23 amendment of section 35b   ,> ~2" aiileaclmen1 of section 36ab 25 amendment of section 42 26 amendment of section 45 27 amendment of section 45a 28 amendment of section 45j 29 amendment of section 458 30 insertion of new part iiib -31 amendment of section 46 32 amendment of section 47 33 amendment of section 51 34 amendment of section 52 35 amendment of section 56  chapter v amendments to the state bank of india aer, 195536 insertion of new section 3sa 37 amendment of section 40 38 amendment of section 42 39 amendment of section 43 40 amendment of section 49 41 amendment of section 50  chapter vi amendments to the state bank of india (subsmiary ;ba1id) acr,: 1_42 insertion of new section 3sa 43 amendment of section 43 44 amendment of section 44 45 amendment of section 53 46 amendment of section 62 4'1 amemimentofsection 63  chapter vii amendments to the deposit insurance and cridrr guaranti& corporation acr, 196148 amendment of section 2 49 amendment of section 6 so amendment of section 11 51 amendment of section 13 52 amendment of section 32 53 amendment of· section 50   chapter viii aioandments to the banking companies (acquisition and transfd of undertakings) act, 1970 tiuusii54 amendment of section 3 55 insertion of new section 5a 56 amendment of section 9 57 amendment of section 10 58 amendment of section 19  chapter ix amamments to the regional rural banks act, 197859 amendment of section 19 60 amendment of section 20 61 amendment of section 30  a billfunhe?' to amend the bankers' books evidence act, 1891, the rese"" bank of india act, 1934, the banking regulation act, 1949, the state bank of india act, 1955, the state bank of india {subsidiary banks) act, 1959, the deposit insu'rance and oredvt guarrantee corporation act, 1961, the banking companies (acquisition and tran·<;fer of undertakings) act, 1970 and the regional rural banks act, 1976 be it enacted by parliament in the twenty-ninth yeqfl' of the republic of india as follows:- chapter i plmliminarys 1 this act may be called the banking laws (aroendmlllt) act, 1978 shert title  i 1 chapter ii ambndmbnts to the bankers' books evidencb a~, 1891z in the bankers' books evidence act, 1891,-(a) in section 2,-10 amend~ men1, at act 18 of 1891 (i) for clause (4), the following clause shall be substituted, namely:-, (4) "legal proceeding" means,-(i) any proceeding or inquiry in which evidence il or may be given i , , 1 (ii) an arbitration; and (iii) any investigation or inquiry under the code of criminal procedure, 1973, or under any other law for the time being in force for the collection of evidence, cod-ducted by a police officer or by any other person (not s being a magistrate) authorised in this behalf by a malistrate or by any law for the time being in force;'; (ii) in clause (8) the following shall be inserted at the end, namely:-"and where the copy was obtained by a mechanical or 10 other process which in itself ensured the accuracy of the copy a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the bank's business after the date on which the copy had been so prepared, a further certificate to that is effect"; (b) after section 7, the following section shall be inserted, namely:-'s in the application of sections 5, 6 and 7 to investigation or inquitjlreferred to in sub-clause (iii) of clause (4) of section 2 20 the order of a court or a judge referred to in the said sections shall be' construed as referring to an order made by an officer' of a rank not lower than a superintendent of police as may be specified in this behalf by the appropriate government ~r ot court to be eon-trued to be order made by apecifled oflleer expzanation-in this section, "appropriate government" 25 means the government by which the police officer or any other person conducting the investigation or inquiry is employed'  chapter iii ammdmen'l's to the reserve bank of india act, 1934amendmentof metlon 46 3 in section 45 of the reserve bank of india act, 1934 (hereafter in 30 2 of 1934 this chapter referred to as "the reserve bank act"), after sub-section (2) and before the explanation, the following sub-section shall be inserted, namely:- (3) if the bank appoints the state bank or any other bank a its agent, any payment required to be made into the bank or any billa 35 hundis or other securities required to be delivered into the bank, under any law or rule, ,regulation or other instrument having the force of law, may be delivered to or paid into the agency bank" 4 in section 451 of the reserve bank act,-(i) for clause (bb), the following clause shallbe 8ubstitutei, 40 namely:-amend_ 1mdt0f mc$lon 4it '(bb) "deposit" includes and shall be deemed always to have included any receipt of money by way or deposit or loan or in any other form, but does not include,-(i) amounts raised by wayof sure capital; 45 (ii) amounts contributed as capital by partners of a ftrm;   i 10 of 1'&4os1 (iii) amounts received from a scheduled bank or a c0-operative bank or any other ba1\king company 81 tleftned in ' 'iection 5 of the banking regulation act" ,1949; (iv) any amount received from,-(4) the development bank; s 8a of 1951 (b) a state financial corporation eltabli&hed under the state financial corporations act, 1951; (c) any financial institution specified in or under 18 of 1964 10 section 6a of the industrial development bank of india act, 1964; or (d) ·any other financial institution that may be specified by the bank in this behalf; (v) amounts received, in the ordinary eourse of business, by way of security deposit or dealership deposit; is (vi) any amount received from an individual or a finn or an association of individuals not being a body corperate, registered under any enactment relating to money lending which is, for the time being in force in any state; and (vii) any amount received by way of subscriptions in 20 r~ct of a conventional chit e:rplanation-"conventional chit" means a transaction, whether called a chit, chit fund, kuri or by any other name, by or under which a foreman en ters into an agreement with a specified number of subscribers that everyone of them hall 1s subscribe a certain sum of money in periodical instalments over a definite period and everyone of such subscribers shall, in turn, as determined by lot or by auction or by tender or in such other manner as may de provided for in the chit agreement, be entitled to the prize amount, that is to say, the 30 amount arrived at by deduction from 'out of the total amount subscribed at each instalment by all subscribers, the amount :which the subscriber has agreed to forego, and which is set apart under the chit agreement for payment of commission charged by the foreman or for rateable distribution among 35 the subscribers in terms of the chit agreement or for ,both;'; (ii) in clause (d), the words ", of which the capital subscribed by its partners exceeds one lakh of rupees" shall be omitted; (iii) in clause (e), lor the words "co-operative society or ftrm", the words "or co-operative society" shall be substituted 40 5 after chapter ilib of the reserve bank act, the following chapter shall be inserted, namely:- "chapter iilcintertion of new chapter after chapter iiib interpretation  45 prohibition of acceptance of deposits by unincorporated bodies 45r the words and expressions used in this chapter and defined  in chapter iiib shall have the meaninss respectively assigped to them therein  455 (1) no person, being an individual or a firm or an wdncorporated 8ss(iciation of individuals, shall, at any time, have deposit from more than the nwnber of depositors specified against each, in the table below:-deposits not to be accepted ih certain cases (i) individual -not more than ten depositors (ii) fill"m i  f'· -not more than ten depositors ,per partner and not more than forty depositon 10 in all \  (iio association of individuals -not more than ten depositors per indiviaual and not more than forty depositors in all t s (~) where at the commencement of the banking laws (amend-  ment) act, 1978 the deposits held by any such person are not in accordance with sub-section (1), he shall repay such of the deposits ; as shall fall due for repayment immediately after the commencement of that act so as to bring the number of depositors within tlie relative 20 limit specified in that sub-section explanation-where a deposit has been made by two or more persons, it shall, for the purposes of this section, be deemed to have it? been made by as many depositors as there aife number of persons '1 making such deposit 25 power to issue search-wiiirrants 45t (1) any court having jurisdiction to issue a search-warrant under the code of criminal procedure, 1973 may, on an application 2 of 1874: by an dfficer of the bank or of the state government authorised in this behalf stating his belief that certain documents relating to acceptance ~f deposits in contravention of the provisions of section 458 are 30 secreted in any place within the local limits of the jurisdiction of luch court, issue a warrant to search for such documents ·(2) such warrant shall be executed in the same way and shall hav,", the same effect as a search-warrant issued under the code of criminal procedure, 1973" 3s 2 of 1"'  6 in section 46b of the reserve bank act,-(i) in sub-section (2)-amendment of section f6d (a) for the word "five", the word "seven" shallqe subatituted; (b) the provisos shall be omitted; 40 (ii) after sub-section (2), the following sub-sections shall be inserted, namely:-"(3) loans and advances may be made under sub-section (2) only for the purpose of enabling a state co-operatlve bank' or a regional rural bank,-45 (a) to pay any dues it)  ' and promissory notes ~ect of bills of exchangt b ok pure ased or rediscounted by tbe a d under claus«! (2) of section 17 or loans and advances sr: e t~/tf by th~ bank under clauses (3b) and (4) of ion i or agricultural operations; &r 5 10  (b) to make to central co-operative banks or pri agncult~rijl credit societies loans or advances repayab~ the expiry of fixed periods not being less than fifteen months and not exceeding seven years from the date of making such loan or advance, by way of reimbursement of loans and ad~ances made by such co-operative banks or societies for agricultural operations or reimbursement of loans or advances granted for agricultural operations which have been con~erted into loans or advances repayable on expiry of fixe~ penods not bemg less than fifteeri months and not exceedmg seven years from the date of conversion (4) loans and advances may not be made under sub-section (2)  unless the bank fonns an opinion, that owing to drought, i' farrune or other natural calamities or owing to military operations ,or enemy actions-20 '(a) the state co-operative bank or the regional rural bank is unable to pay the said dues in time; or (b) making of the said loans or advances to central cooperative banks or primary agricultural credit societies it rendered necessary (5) no loan or advance shall be made under sub-section (2) unless such loan or advance is fully guaranteoo as to the repayment of the principal and payment of interest- (4) in the case of loans and advances to state cooperative banks, by the state government; and 30 (b) in the case of loans and advan<:es to regional rural banks by the sponsor bank" ''f~ 'in section 58b of the reserve bank act, after sub-seation (5) i the following sub-section shall be inserted, namely:-amendmentol section 58b 3s "(sa) if any person contravenes any provision of section 455, ~e shall be punishable with imprisonment for a term which may extend to two years, ,or with fine which may exltend to twice the aj'niltunt of deposit received by such person in coilitraventionof that section or rupees two thousand, whichever is more, or with both" "provided that in respect of any offence punishable under subsection (sa) of section 58b, a complaint in wrtting may also be ftled by an officer of the state government, generally or specially authorised in writing in this behalf by the state goverddlent," 9 in the banking regulation act, 1949 (hereafter in this chapter referred to as "the banking regulation act"), in section 5,-!t  ,  amendmentof aeetlon 5 (i) for clause (til), the following clauses shall be substi!hlted, s namely:-('\ , (a) "approved securities" means,-(i) securities in which a trustee may invest money under clause (0), clause (b), clause (bb), clause (c) or clause cd) of section 20 of the indian trusts act, 1882; 102 of 1882 (ii) such of the securities authorised by the central government under clause (f) of section 20 of the indian trusts act, 1882, 86 may be prescribed; 2 of 1882 (oa) "agricultural refinance and develqpijlent corporation" means the agricultural refinance and development corporation is constituted under section 3 of the agricultural refinance and development corporation act, 1963;'; 10 of 1963 (n) after clause (d), the following clause shall be inserted, namely: - '(dd) "corresponding new bank" means a corresponding new 20 bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970;'; 5 of 1970 (iii) clause (gg) shall be re-iettered as clause (gb), and before clause (gb) as 80 re-iettered, the follawing clause shall be inserted, namely:-2s '(ga) "industrial development bank of india" means the industrial development bank of india constituted undet1 section 3 of the industrial development bank of india act, 1964;'; 18 of 1964 , ,' (iv) after clause (j), the following clause shall be inserted,  ,"" jlamely:-30 '(k) "regional rural bank" means a regional rural bank established under section 3 of the regional rural banks act, 1976;'; 21 of 1976 (v) for clause (1), the following clause shau be substituted, namely:-35 2 of 1934 '(1) "reserve bank" means the reserve bank of india constituted 'under section 3 of the reserve bank of india act, 1934;'; 230t 1955 (vi) clause (nb) and clause (nc) shall be re-iettered as clause (nc) and clause (nd) respectively, and before clause (nc) as 80-re-lettered, the following clause shall be inserted, namely:-40 '(nb) "state bank of india'" means the state bank of india constituted under section 3 of the state bank of india act, 1955;' 5 of 1970 10 in the banking regulation act, for the words figures and brackets "corresponding new bank constituted under sectio~ 3 of the  banking companlies (acquisition and transfer of undertakings) act, 1970", wherever they occur, except in section 51, the words "corresponding new 5 bank" shall be substituted 11 in the banking regulation act, for the words "agri~tural refinance corporatiql'l", wherever 'they occur, the words "agricultural refinance and development corporation" shall be substituted substitution of "corresponding new bank" for "corres_ ponding, new bank constituted under section 3 at the banking companies (acquuition and transfer of undertakings) act, 1970" change of nameot "agricultural refinance corporation" - amendment of section 7 , 12 in section 7 of the banking regul8ition act, in sub--section (1), after 10 the words "shall use as part of its name", the words "or in connection with its business" shall be inserted amendment of section 8, is 13 in section 8 of the banking regulation act, for the proviso, the following proviso shall be sub$tuuted, namely:-"provided that this section shall not apply tq any such business as is specified in pursuance of clause (0) of sub--section (1) of section 6" 14 in section lob of the banking regulation act, in sub-section (1),-amendmertt of section· lob 20 2s 30 (i) for the words "shall have a chairman of its board of directors", the words "shall have one of its directors as chairman of its board of directors" shall be substituted; (ii) for the second proviso, the following proviso shall be substituted, namely: -' "provided further that nothing in /this sub-section shall apply to a banking company until the expiry of a period of three months from the date on which the aggregate of the outstanding deposits of such banking company becomes, at any time after the commencement 01 the act aforesaid, 'ten crores of rupees or more, and where the provisions of rt:his sub-section have become applicable to a banking company, such provisions shall continue to apply to such banking company, notwithstanding that the aggregate of the outstanding deposits of such ban1dng company has, at any time thereafter, fallen bejow ten crores of rupees"; (iii) in sub-section (5), 'the words "but shall continue in o1ftce until his successor assumes office" shall be omitted; (iv) after sub-seation (5), the following sub-~ction shall ~ :inserted, namely:-"(&a;) a chail1nan whose u,m of office has come to ,an~, either by reason of his resignation or by reuqp of expiry pfjbe period of his office;' shall, subjec't to !the apprqval of the reserve s bank, continue in office until his successor assumes office" 15 after section lob of the banking regulation act, the following sectiqll shall be inserted, namely:-i~ertlon of new section 10bb "lobb (1) where the office of the chairman of a banking company is vacant, the reserve bank may, if it is of opinion that the continua- 10 tion of such vacancy is likely to adversely affect the interests of the banking company, appoint a person, eligible under sub-section (4) of section lob to be so appointed, to be the chairman of the banking company and where the person so appointed is not a director :>f such banking company, he shall, so long as he holds such :lppointment, be is deemed to be a director of the banking company power of reserve bank to appoldt wtoletime chairman of banjdn« eompany (2) the chairman so appointed by the reserve bank shall be in ithe whole-time employment of the bankli,ng company and shall hold ofbee for sucl\"period not exceeding three years, as the reserve bank may specify, b~t shall, svbjectto the other provisions of this' act,be 20 eligible for reappointmel'l't (3) the chairman so appointed by the reserve bank shall draw hqn 'the banking company such pay and allowances as the reserve bank may determine and shall be removed from office only b'y the reserve bank :l 5 (4) save as otherwise provided in this section, the provisions ,pf section lob shall, as far as may be, apply to the chairman appointed by the reserve bank under sub·section (1) as they apply to a chairman appointed by the ba1lking company" 16 for section 10c of the banking regulation act, the following sec' 30 tion shall be s~tituted, namely:-"loc a chairman of a banking company (by whomsoev~r appointed) and a director of a banking company (appointed by the reserve bank under sectioo loa) shall ddt be required· to hold qualification shares in the banking company 35 substitution of new eection for  lon loc chairjdan and certai  directors not to be required to hold qualification shares  11 for sec~ion 18 of the banking reg\llation act,· the foll,o;wing section shall be substituted, namely:-substitution of new section for lection 18 cuh reserve '18 every banking company, not being a scheduled bank, shall mai~ in india by way of cslh reserve wiltb' ,itself or by way of balance in a current aqtount with the reserve bank, or by way of net 40  s26 of 1881 b411ance in current accounts ex in one ()r more of the said three ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in india and shall submit to >the reserve bank before the fifteenth day of every month a return showing the amount so held on friday of each week of the preceding month with particulars of its demand and time liabilities in india on each such friday, or if any such friday is a public holiday under the negotiable instruments act, 1881, at the close of business on the preceding working day explana:i<>n-in this section, and in section 24-jo (a) "liabilities in india" shall not include-(i) the paid-up capital or the reserves or any credit balance in the profit and loss account of the banking company; (ii) any advance taken from the reserve bank or from the industrial development bank of !ndia or frmn the agricultural refinance and development corporation; 20 (b) the aggregate of liahilities of a banking company to the sltate bank of india, a subsidiary bank, a corresponding new bank or a regional rural bank or another banking company or a co-operative bank or any other financial institution notified by the central government in this behalf, shall be reduced by the aggregate of the liabilities of all such banks and institutions to the banking company; (c) "net balance in current accounts" shall, in relation to a banking company, mean the excess, if any, of the aggregate of the credit balances in current account maintained by tha1 banking company wi th the state bank of inrlia or a 9ubs'idiary bank or a corresponding new bank over the aggregate cd the credit balances in current accoun't held by the z;aid banks with such banking company' 30 18 in section 19 of the banking re~lation act, for sub-section (1), the following sub-section shall be substituted, namely:-amendment of section 19 u (1) a banking company shall not form any suibsidiary company except a subsidiary company fonned foil' one or more of the following purposes, namely:·-35 (a) the undertaking of any' business which, under subgection (1) of !lection 6, it is pennissible for a banking comprmy to undertake, or (b) with the previous permission in writing of the reserve bank, the carryjng on of the business of banking exclusively outside india, or (c) fqf undertaking such other b~cqness, which the reserve bank may with the prior approval of the central government consider t~ be conducive to the spread of banking in india or to be otherwise useful or necessary in the public interest exp14naibiot1-for the purposes of section 8, a banking company shall not be deemed, by reason of its forming or having a subsidiary company, to be engaged indirectly in the business carried on by 8uchsubsidiary company" amendment of section 20 1, in section 20 of the banking regulation act, in sub-section (1), in s clause (b), for sub-clause (iii), the following sub-clause shall be substituted, namely:- (iii) any company (not being a subsidiary of the banking company or a company registered under section 25 of the companies act, 1956 or a government company) of which or the subsidiary or 10 1 of 1956 the holding company of which any of the directors of the banking company is a director, managing agent, manager, employee or guarantor or in which he holds substantial interest, or" zo in section 22 of the banking regulation act, in sub-section (l) ,-amendment of section 22 (i) after clause (b), the following clauses shall be inserted, 15 namely:- (bl) that the general character of the proposed management of the company will not be prejudicial to the public interest or the interests of its depositors; (b2) that the company has adequate capital structure and 20 earning prospects; (b3) that the public interest will be served by the grant of a licence to the company to carry on banking business in india;"; (ii) after clause (c), the following clause shall be inserted, namely:-2s "(d) any other condition, the fulfilment of which would, in the opinion of the reserve bank, be necessary to ensure that the carrying on of banking business in india by the company will not be prejudicial to the public interest or the interests of the depositors" 30  21 in the banking regulation act,-(1) in section 24,-amendment ·of sections 24 34aand 36ad (a) in sub-section (1), for the words "time and demand liabilities", the words "demand and time liabilities" shall be substituted; 3s (b) in sub-section (2a) ,-(i) in clause (a), after the figures and words 1125 per cent", the words and figures ", or such other percentage not exceeding 40 per cent as the reserve bank may, by notification in the official gazette, specify," shall be inserted; 40 (ii) for, clause (b), the following clause shall be substituted, namely:-ii (b) in computing the amount for the purposes of clause (4),-(i) the deposit required under sub-section (2) of 45 section 11 to be made with the reserve bank by a banking company incorporated outside indiaj 5 (ill) any cash or balances maintained in india by - banking company other than a: scheduled bank with itself or with the reserve bank or by way of net balance in current account in excess of the aggregate of the cash or balance or net balance required to be maintained under section 18; (iii) any balances maintained by a scw;duled bank with the reserve bank in ejreess of the balance required to be maintained by it under section 42 qf the reserve bank of india act, 1934; 10 2 of 1934 (iv) the net balance in current accounts maintained in india by a scheduled bank; (v) any balances maintained by a region81 raral bank in call or fixed deposit with its sponsor bank, shall be deemed to be cash maintained in india·  · , , 21 of 1976 (c) in sub-section (2b) , the words and figures "established under section 3 of the regional rural banks act, 1976" !\hau be omitted; (d) in sub-section (3),-20 (i) for the words "time and demand liabilities", the words "demand and time liabilities" shall be substituted; and  26 of 1881 (ii) the words and figures "under the negotiable' instruments act, 1881," shall be omitted; (e) after sub-section (3), the following sub-sections shall be inserted namely:-2s '}o - (4) (a) if on any friday during a month or, if such friday is a public holiday, on the preceding working day the amount maintained by a banking company at the close of business on that day falls below the minimum prescribed by or under clause (a) of sub-section (2a), such banking company shall  be liable to pay to the reserve bank in respect of that day's i default, penal interest for that day at the rate of three pel' cent per annum above the bank rate on the amount by which the amount actually maintained falls short of the prescribed minimum on that day 35 40 (b) if the default occurs again on the next succee4ini friday or, if such friday is a public holiday, on the precediiij( working day, and continues on succeeding fridays or preceding working days, as the case may be, the rate oi penal· interest shall be increased to a rate of five per cent above the bank rate on each such shortfall in respect of that friday and each succeeding friday or preceding working day, if such friday is a public hotidayon which the default continues 45 (5) (a) without prejudice to the provisions of sub-section (3), the reserve bank may require a banking com~any ~o fu~­nish to it a return in the form and manner specified by it showing particulars of its assets maintain~ in accordance with this section and its demand and time liabilities in india, as at the close of business on each day during a month (b) without prejudice to the provisions of sub-section (4), 00 the taijure of a ban&ing company to maintain as on any day, 5 the amount so required to be mamtamed by or under sub-sect1on (2a) the reserve bank may, m respect 01 such de~u1t, requll'e the banking company to pay penal interest for that day as provided in clause ('11) of sub-section (4) and 1f the default cont1-nues on the next succeeding working day the penal interest 10 may be increased as provided in clause (b) of sub-section (4) for the concemed days (6) (a) the penalty payable under sub-section (4) and subsection (5) shall be paid within a period of fourteen days from the date on which a notice issued by the reserve bank demand-j 5 ing payment of, the same is served on the banking company and in the event of failure of the banking company to pay the same within such period, the penalty may be lev!ed by a direction of the principal civil court having jurisdiction in the area where an office of the defaultng banking company is situated, such 2 direction to be made only upon an application made by the 0 reserve bank in this behalf to the court (b) when the court makes a direction under clause (a), it shall issue a certificate specifying the sum payable by the banking company and every such certificate shall be enforceable 25 in the same manner as if it were a decree made by the court in a suit  (7) when under the provisions of clause (b) of su~section (4) penal interest at the increased rate of five per cent above the bank rate has become payable by a banking company, if 30 thereafter the amount required to be maintained on the next succeeding friday, or if such friday is a public holiday, the next preceding working day, is still below the prescribed minimum every director, manager or secretary of the banking company, who is knowingly and wilfully a party to the default, shall be 3s punishable with fine which may extend to five hundred rupees and with a further fine which may extend to five hundred rupees for each subsequent friday or the preceding working day, as the case may be, on whreh the default continues (8) notwithstanding anything contained in this section, if 40 the reserve bank is satisfied, on an application in writing by the defaulting banking company that the banking company had sufficient cause for its failure to· comply with the provisions of tub-section (2a) , the reserve bank may not demand the payment of the penal interest 45 24 of 1881 ~lanation-ln this section the expressjon "public holiday" means a day which is a public holiday under the negotiable instruments act, 1881'; (2) in sub-section (3) of section 34a and in sub-section (3) of section 36ad, the words and fi~res "established under section 3 of 50 the regional rural banks act 1976" shall be omitted 21 of 1976 lallllll  a la aectiod 28 of the banking regii]atton ad, after sub-section (3), the following sub-section shall be inserted, namely:--amendment of section 21 1 '1" "(3~ notwttbatandiltg anything to the goiltrary contained in ';" "  bilp a,action ("'~ of _tion 210 of the companies act ·1956 the ::5 fi18riod to which tile profit ad leas account relates ahell in the' case of a banking company, be the period ending with the iast working day of the, year immediately preceding the year in which the nual g~al mee~g is  held" (' d 1 10 23 in section 35b of the banking regulation act,-amend-;(t) in su~section (1) , in clause (a), after the words clany ment of proviiio~,relating· to", the words "the maximum permissible numaection her ,afcurectors, or" shall be inserted; 3gb (ii) in sub-section (2), for the words and figures ('provisions of section 310", the words and figures "provisions o,f sections 269, 310" shall be substituted; is (iii) after sub-section (2), the following sub-section shall be mtlerted', namely:-10119l5e 20  (81) nothinr containtri in section 198 of the companies act, 1956 shall apply to a banking company and the provisions er sub-section (1) gtsection - and of hection 387 of that act shall, in so far as' they are applicable to a banking c01d@&dy, have effect as if no reference to section 198 aforesaid had been !!lade in' the said provisions it 24 in:aeotion 3mb of, the banking regulation act, in sub-section 2s the provis~shall be omitted <n , amea4,,, m_ at,~: sec:tiiiw :' hab "i • tn sec'tion 42 o~ the banking regulation act,-'(i) for the words and figures "sections 460, 464 and 465", the word and figures "section 460" shall be substitute?; ,,' '; ,(ii) , the words "or with the appointment of a committee of 30 t, i "inspection" shall be omitted  26 in section 45 of the banking regulation act,-(a) in sub-section (5), ill clause (i) ,--amendment of sediea& 3s :  (i) in the ftrst proviso; for the words "as ate applicable": in the two places where they occur, the words "as arc, at the time of such pay~ent 01' grant, applicable" shall be substituted; (ii) atter the' second proviso, the following proviso shall be inserted, namely:-4" "provided also that any slu:h doubt or d,iiference shall be referred to the reserve bank before the expiry of a period of three years from the date of the payment or grant referred to in the first proviso·;"; (b) in sub-section (8), the following shall be inserted at the end, namely:-"including the trustees or other persons managing, or connected in any other manner with, any provident fund or other fund maintained by any such company or the transferee bank"; s (c) in sub-section (9), for the words "on and from such date as may be specified by the central government in this behalf", the words "on and from the date of the coming into operation of the scheme" shall be substituted; (d) in sub-section (15), for the words and figures "any other 1'0 banking institution notified by the central government under section 51", the words "a subsidiary bank or a corresponding new bank" shall be substituted; (e) after sub-section (15), the following expl~tion shall be inserted, namely:-'s "erplanation-references in this secti'on to the terms and conditions of service of an employee shall not be construed u extending to) the rank and rstatus of such employees" 2'1 in section 45a of the banking regulation act, for the fli1jn "1898", the figures "1973" shall be substituted 20 amendmf!ll1tof st'ction 45a 28 in section 45j of the banking regulation act, for the ftlul'll "1'898,", wherever they occur, the figures "1973," shall be substit':lted amendmc;tlt of section 45j 29 in section 455 of the banking regulation act, for the woro aajendmelbt of aectjen 468 "chief presidency magistrate or the district magistrate", wherever they occur the words "chief metropolitan magistrate or the chief judicial 25 magistrate shall be substituted 30 after section 45x of the banking regulation act, the following part shall be inserted, namely:-insertion of new part fiib  "part liib provisions relating to certain opbrations or banking companiib30 45y the central government may, a1iter consultation with the reserve bank and by notification in the official gazette, make rules specifying the periods for which-(a) a banking company shall preserve its books, accounts and other documents; and 35 power of central government to make rules far the preaervatlon of recorda (b) a banking company shall preserve and keep with ltalf different instruments paid by it s retum of paid instru; menta 1;0-customers ez (1) where a banking company is required by its customer to return to him a paid instrument before the expiry of the period specifted by rules made under section 45y, the banking eompany shan not return the instrument except after makjing and keeping in its possession true copies of all relevant parts of such instrument, such copies being made by mechanical processes which in themselves ensure the accuracy of the copy (z) the banking company shall be entitled to recover from the lh customer the cost of making such copies of the instrument 10 explanation-in this section, "customer" includes a government department and a corporation incorporated by or under any law payment of depositors' money 45za (1) where a deposit is held by a banking company to the credit of ooe or more persons, the depositor or, as the case may be, 15" all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depos:tor ·or the death of all the depositors, the amount of deposit may be returned by the banking ·company 20 25 (2) 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 deposit, where a nomination made in the prescribed manner purports to confer on any person the right to receive the amount of deposit from the banking company, the nominee shall on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, in re---  lation :to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner 30 35 (3) where the nominee is a minor, it shall be lawful for the depositor making the nomination to appoint in the prescribed manner any person to receive the amount of deposit in the event  of his death during the minority of the nominee (4) payment by a banking company in accordance with the provisions of this section shall constitute a full discharge to the banking company of its liability in respect of the deposit: provided that nothing contained in this sub-section shall affect the right or claim which any person may have against the person to whom any payment is made under this section 45zb no notice of the claim of any person, other than the person ar persons in whose name a deposit is held by a banking notice of claim of other persons regardine deposits not receivable 45 ~ompany, shall be receivable by the banking company, nor shall _ ~e banking company be bound by any such notice even though '~sly given to it:  provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before a banking company, the banking com-' ,pany shall take ~e note of such decree, order, certificate or other authority 45zc (1) where any person leaves any article in safe custody 50 1 wttha banking company, such person may nominate, in the pres- ,crib!ec!' manner, one person to whom, in the event cyf the death of return of articleskept in safe \ the person leaving the artiic1$: 4n sale cus~, suc;h ~ may be returned by the banking company (4~ where the nglllinee is ,a mulql', it :smhbe ~w~6tr the person making thenojlllitl,auon to appoint in tbe prescribe4 jmiuler any person to rectnv8 the· ~le ~posiw io ~ e"{ent qf  death ~ dur~ the minotity qf the nq~ett 1 (3) the bankillg ·company sball, bellore t'etui'dbl • a" 'deles under this section to the noro,inee or the ,pei'sq~ apjil0inted ~der subsection (2), prepare, in ~uch manner ~ dlay b~ ~~~e4qy' the reserve bank from time to time, an inventory of the ~~ articles 10 which shall be signed by such nolj1inee or person and shan deliver a copy of the inventory so prepared to such nominee or pel"ioli (4) notwithstanding anything contained in any other law for the ,time being in foree or bl any diapoait4on, whe~ taitamentary oro~ise, in respect of such vtiele, wlbne ·a damjaatloa made 15 m tlw prescribed dulilqef ~pol'ta t9 codfer  on ad)' )mdi01l the rigbtto recei~ ute ar~le from ~ bsmkjqg ,»q>aqy, th~ -omi-~ litball, on the death ot the penon leaving ~ ami~o il\,ssfe custody, become entitled to th~ mujal at be ,",ucle to ·'~l_clu­sion of all other persons, unless the nomination is varied 01' cancelled 20 in the prescribed manner: provided that notllmg con~e<;l in this section shall ~~t the notice of claims of other persons regarding articles not receivable release of cod-tent of safety lockers ~igpt «;u' claim which any j)9rbod may have ~~t tbepellklq to whom the artiqle is ratumad in pu,r~uanoe) ot this su~n, 45zd no notice of the claim ,of any ,pemollotber than the lper- 25 son or persons in whose name any article is held br a ~jng compady in safe custody, sh~ be ~vable by ~he nnking com-'pany, nor shall the banking company be 'bound by anylbucbddtice even though expj'essly giyen to it: proviqed that where any decree order~ certificate or other 30 authority  from a court of competent juriadi~ relating to auch article is woduced before a b~ing comp~y', tae ba~ng ~any shall take due note of such d~ee,ordar, ~tibte or f:)u1er authority 45ze (1) where an individuaj is th~' sale hirer of a l~k~ from a 35 banking company, whether such loc1~er is located in the ~afe de~t ,' vault crf such banking company ·or elsewhere, such individual'may , nominate one person to whom, id' the event of the death of such individual, the banking c()mpany may give access to the leek·and liberty to remove the contents of the locker  40 (2) where my such locker is hired from a banking company t, ~ two or more individuals joifttly, and, under the eon  act of hire, the locker is to be operated· under, the joint signatures of· two or  diiil"e of such hirers, su,eh bkers may nomtnate one or more persons to whom, in the event of the death of such joint 'hire!- or 4s bir'tf$,the· banking company play live, joidt1y, with the nrviving ~~ hirer 0: joint pjrera, as thec4ie ~ be 8caesa:to the lcdckat)ed t  ub~ torexuove the ~~,ot suw11~ (3) every nomination under sub-eection (1) or su~tion :(2) shall be made in the prescribed manner " so <') tme banking company abell;' 'before· permittmg the -r~va1 of qte mn,tents of &l\y locker· by arrynomillee or jomtly"by  any d~ee and ~vor 88 afoirelaid,prepue, ill luck 1n'8ftfter:h' mq  i ,," ·dk~~ :by the re$ervt bank from time to time, an inventory ,~ ij)ecoqtents qf the locker w~h , • 11 be sigp,ed by 'iuchnominee ,<9l" pnt~ by tjuchnomijlee ~d survivors and shall ~¥efi a copy ,qf",tqe mventory 80 pfep~red ~ such nominee or ~ee and 5 !, '~ivoj!" j i ' (5) on the llemcwal gf dle·lcontents of any looker :by any nomi-nee or jointly by any nominee and survivors as atbresaidthe liability of the banking dompany in relation to ithe oomeb_ of the locker shall stand discharged 10  ,(6) no suit, prosecution or ,other legal proceedulg shall lie agltilst' a b,ankmg company for' any damage caused, or likely to be caused, for stlowing access to any locker, and liberty to remove the ,cl>~~·of such lockttr, in p~rsual'1ce of the provisions of sub-section (1), or sub-section (2), as the case may be 45~ no notice of the claim of any ;persoll other than hirer or 1$ ""hw!~ % " l~~ke;r ahali be rece~vab1e by a ban~g company nor  ~: ,shall ~}je: pfu,lking cf>ll1paoype boluld by;,~ ~ch notice even ~~ e~px'essly ~ven to it: , notice of claims 01 other persons regarding aafel7 lockers not receivable r] rzlwi4eci tilat wbere any decree, order, certificate or other ~ from a court of competent jurisdiction, i, relating to the 2,ol,s)qiier 01' its, oontents is produced ·,before the banking company, the banking company shal:l ~ake due note of such,decree, order, certificate or~thr au&hority!' 31 in section 46 of the banking regulation act, for sub-section (4), tjite fotlowtng sub-section shall be substituted, namely:-amendment of eection 48 2$ "(4) if any other provision of this act is contravened or if any default is made' in-, (i) complying with any requirement of this act or of any order, rule or direction made or condition imposed thereunder, or 30 (ii) complying with any term, or any other provision conkmtd in,lldy such order, rule or (lirection, or 'i) c:arryjng out the terms of, or the obligations under, at liqbqle sanctioned under su~tion (7)' of section 45, , 'penen guilty of such contravention or' ·default shall be punish-35 a~ w~t4 fine which mb3 extend to two thousand l~' adci where a contravention or default is a continlling one, with al' ~,flde which may extend to one hundred rupees for every day '8fter"the ~t, dul4ng '!which the eonll'avelmioll  or defalllt, oontinues" ~ ill, section 47 of the bankini~tion act, f~" the'~w,ords "no 4~ ~~~)pie~ :to ~t of a presicl~nc¥ magistrate or a ma~w at the amendmentof section 47 ftj:st~aa,s",tbe werds "ng court other than that of ~ ~~litan magistrate' or a judicial magistrate of the first class or,ajly ~1j1i superiqr thereto" shall be svb~tuwd, 33 section 51 of the bankijlg ~ul~un act ,hall t~e ~num~ered 81 4~ ;su,~~~n i (l~ of t~at se(:tiop, andt ,;~ (4) in sub-section (1) as so re-numbered,-'''' i j  " ,,,)!~r,,, r)! ~o?tot ·tbe~res"aqd word "4' to _,~",tbe ,a,undj letters {,tl '  ' "{if{ to 4wi 46 to 48!' ahan ,be subttuted, (ii) for the words, ftgures and brackets "or any eorresponding new bank constituted under section 3 of the banking com- patties (acquisition and transfer of undertakings) act, 19'10 or a regional rural bank estabjished under section 3 of the regional rural banks act, 1976, or any other banking institution ftotlfted s by the central government in this behalf", the woi'ds ,"or any corresponding new bank or a regional rural bank or any subsidiary bank" shall be substituted; (iii) in the proviso,-(a) in clause (0), for the words "general manaaer", the 10 words "managing director" shall be substituted; (8) for clauses (b) and (c), the following clauses shall be substituted, namely:-"(b) ngthing contained in sub-clause (iii) of clauae (b) at sub-section (1) of sec~ion 20 shall apply to any 15 bank referred to in sub-section (1), in so far as the said sub-clause (iii) of clause (b) precludes that bank from entering into any c()lj)mitment for grilhting oy loan or j advance to or on behalf of a company (not being a gov- ernment company) in which not less than forty per cent 20 of the paid-up capital is held (whether singly or taken together) by the central government or the reserve bank or a corporation owned by that bank; and (c) nothing contained in section 46 or in section 47a shall apply to,-2 (i) an officer of the central government or the 5 reserve bank, nominated or appointed as director of the state bank of india or any corresponding new bank or a regional rural bank or any subsidiary bank or banking company, or (ii) an officer of the state bank of india or a 30 corresponding new bank or a regiobal ruril bank or a subsidiary bank nominated or appointed as director of any of the said banks, not being the bank of which he is an officer, or of a banking company"; (b) after sub-section (1) as so re-numbered, the following sub- 35 section shall be inserted, namely:-f:j" i 'i, ;,1 "(2) references to a banking company in any nue or direction relating to any provision of this act referred to in jubsection (1) shall, except where such rule or direction provided otherwise, be construed as referring also to the  state bank (1)40 india, a corresponding new bank, a regional rural bank and e" subsidiary bank" u in section 52 of the banking regulation act,-(a) sub-aection (3) shall be omitted; !,' ji (b) after sub-section (4), the following sub-sectton shall be 45 inserted, namely:-ii (5) every rule made by the central government under this act shall be laid, as loon as may be after it u!made, before each house of parliament, while it is in btiiiclll,'" a total i"~ 5 ~od 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 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 modification or annulment shall be without prejudice to the ,validity of anything previously done under that rule" 10 ii 'in" section 56 of the banking regulation act,-amelbdment of ( f section ') or clause (f), the following clause shall be substituted, i ~ name y:-'(f) for section 7, the following section shall be substituted, iwnely:-use of word "bank", "'banker" or "banking" 20 ' "7 (1) no co-operative society other than a co-operative bank shall use as part of its name or in connection with its business any of the words "bank", "banker" or "banking" and no co-operative society shall carry on the business of banking in india unless it uses as part of its name at least one of such words (2) nothing in this section shall apply to--(a) a primary credit society, or (b) a co-operative society formed for the protection of the mutual interests of co-operative banks or cooperative land mortgage banks, or (c) any co-operative society, not being a primary credit society, formed by the employees of-(!) a banking company or the state bank of india or a correspnndin8 new bank or a subsidiary bank of such banking company, state bank of india or corresponding new bank, or ' ,  35 (ii) a co-operative bank or a primary credit society or a co-operative land mortgage bank, in so far as the word "bank", "banker" or "banking" appears as part of the name of the employer bank, or as the case may be, of the bank, whose subsidiary the employer bank is" "; (ti) after clause (f), the following clause shall be inserted namely:-40 '(ti) in section 8, for the proviso, the fiollowing proviso shall ,be substituted, namely:-"provided that this section shall not apply-4s (a) to any such business as aforesaid which was ld the course of being transacted on the commencement of the banking laws (amendment) act, 1978 so however that the said business shall be completed befnl'lt the ~xpfry of one year from such commencement or ')' \ ,;,~'l ' , ,(iii) efter c~ (ii), the following clauaeshall be inserted, ~y:- '(fii) in section 9, for the seeond pr:ovis1t, the fbuowing pro-5 ·/;tl~ shaij be aubstituted; namely::--"provided farther that j '1nthe case' of a primary 6-edit society whieh 'beeomes' a:' cptinutry·t 'c~tive bank after the commaacement of ~ ;badking 1iiaw5(~dialent)/ am, 1978, the period of seven years shall commence from the 10 day it so becomes a primary do-operative bank: provided also that the reserve bank may ii1 any particular ease, extend' the' aforeeaid r}lft'iod of· ~ years by such period as it may consider necessary where it is satisfied tha,t ,su~h extension would be in the interests of the deposi- is  to,rs of the co-operative b~"'~ (i~' in'~lbuge (g)', for the figures >ami 1~··'tob, ioc", the ft~~ aria letters "1~, lobb; loc" shall be stlbst1tti~t1; (t1> for clause (j), the following clause shell jle substituted, namely:-20 '(j) for section 18, the following sec~qjl shall be sub6tituted, namely::-cae reserve i " "18 e\l"ery ~pt"rative bank; not bettlgi a' state co-operative bank for the time beb\gflk'lu&d in ,the 'semftd schedule to the reserve bank of india act, 1984 (hereinafter referred to as a 2s 2 ot 193  "scheduled state co-operative bank"), shalt maintain in india, by way of cash reserve with itself or in current aceount opened with the rserveballk or the state c()ooperatlve bank of the state c:oncemed or by way of net balance in ~urrent accounts, 0,1", in the ease of·al'rima~ ~opera1ivebailk, with the central co-opera-~ tive bank of the district ,(-odcer,~ ·or in, one or more or such ways, a sum equivalent to at least three pe'r cent of the total of its"demand ilnd"titne liabilities in irtdib, and shall submi!t to the retjenre"lmnk b~;:lt'e th" flfteenth day of every month a return showing the amount so held on friday of each week of the pre- 35 eeding month wtth particulars of its demand and time liabilities, in india on eben slxhfriday, or, if any such friday is a public holiday under the negotiable instruments act, 1881, at the close 28 of 1881 of business on the pre~edin~ working day e3:planation-in this section, and in sedtion ~--40 , (a)' "liabilttte~ in ltl8ia" shall nbt inalu&;-(i) the paid-up capital or the reserves' or any credit belanee in, the , profit and 1088 iccount,of the co-operative bank; ', (ii) any advance taken from a state government, 45  tile ~serve bank the indll~tria1 development bank of ~ or' the aericuttural l\efblance and development cal'porationj 5 (iii) in the case o£ a state or central co-operative bank, also any deposit of money with it representing the reserve fund or any part thereof maintained with it by any other co-operative society within its area of operation, and in the case of a central co-operative bank, also an advance taken by it from the state co-operative bank of the state concerned; 10 :u" (iv) in the case of a primary co-operative bank, also any advance taken by it from the state cq-operative bank of the state conce-rned or the central co-operative banja of the district concerned; i '" (v) in the case of any co-operative bank, which has granted an advance against any balance maintained with it, such balance to the extent of the amount outstanding 1n respect of such advance; and (vi) in the case of any co-operative bank, the amount of any advance or other credit arrangement drawn and availed of against approved securities; 20 30 (b) the aggregate of the liabilities of a co-operative bank to the state bank of india, a subsidiary bank, a corresponding new bank or a regional rural bank or a banking company or any other financial institution notified by the central government in this behalf shall be reduced by the aggregate of the liabilities of all such banks and institutions to the co-operative bank; (c) any cash with a co-operative bank or any balance held by a co-operative bank with another bank, shall not, to the extent such cash or such balance represents the balance in, or investment of, agricultural credit stabilisation fund of such co-operative bank, be deemed to be cash maintained in india; 35 (d) "net balance in current accounts" shall, in relation to a co-operative bank, mean the excess, if any, of the aggregate of the credit balances in current account maintained by that co-operative bank with the state bank of india or a subsidiary bank or a corresponding new bank, over the aggregate of the credit balances in current account held by the said banks t ' b ks'" with such co-opera lve an ; ; (tji) for clause (m), the following clause shall be substituted, namely:-i (m) in section 20a, in sub-section (1),-- of 1958 (i) the words and figures unotwithstanding anything to the contrary contained in section 293 of the companies act, 1956" shall be omitted; 45 (ii) in clause (a), for the words "any of its directorb", the words "any of its past or present directors" shall be sub-~tuted;'; , "  " (vii) for clause (0), the following clause shall be subs,tituted, diidely:-'(0) in section 22,-(i) for bub-section (2), the following sub-section shall be substituted, namely~-5 "(2) every co-operative society carrying on business as a c~peratjve bank at the commencement of the banking laws (application to co-operative societies) act, 1965 shall before the expiry of three montbs from such 23 of ~ commencement, every co-operative bank which comes 10 into existence as a result of tbe division of any other c0-operative society, or the amalgamation of two or more cooperative societies carrying on business in either case sa a co-operative bank or banks - the commencement of the b8i"kfng laws (application to co-operative societies) 15 act, 1965 or at any time thereafter shall before the expiry of three months from its so coming into existence, every primary credit society which becomes a primary co-operative bank after such commencement shall before the expiry of three illdnths frqlll the date on which it so zo becomes a primary co-operative bank and every c0-operative society other than a primary credit society shall before commeneing banking business in india, apply in writing to the reserve bank for a licence under this aection: 25 provided that nothing in clause (b) of sub-section (1) shall be deemed to prohilhit-(i) a co-operative society carrying on business as a co-operative tank at the commencement of the banking laws (application to co-operauve societies) 30 act 1965' or 23 of 1966 , , (ii) a co-operative bank which has come into existence as a re'sult of the division of any other cooperative society, or the amalgamation ofi two or more co-operative societlies carrying on business, in 35 either case, as a co-operative bank or banks at the commencement of the banking laws (application to co-operative societies) act, 1965 or at any time thereafter; or (iii') a primary credit society which becomes a 40 primary co-operative bank after such commencement, from carrying on banking business until it is gran,ted a licence in pursuance of this section or is, by a notice fnl writing, notified by the reserve bank that the licence 45 cannot be granted to it"; ,, i (ii) in sub-section (3) clause (c) shall be omitted;'; '(17iii) for elallse (q), ~he following clause shall be substituted; namel,:-'(q) in section 24,-5 (i) in sub-section (1), the words "after the expiry of two years from the commencement of this act" shall be omitted; ,(ii) for sub-sections (2) and (2a) , the following subsecbons shall be substituted, namely;-"(2) in computing the amoun,t for the purposes of sub-section (1) ,-10 2 of 1930& (a) any balances maintained in india by a ~ operative bank in current account with the reserve bank or by way of net balance in current account", and in the case of a scheduled state co-operative bank, also the balance required under section 42 of the reserve bank of india act, 1934, to be so maintained; (b') any balances maintained by a central cooperative bank with the state co-operative bank of the state concerned, and 20 (c) any balances maintained by a primary cooperative bank with the central co-operative bank of the district concerned or with the state co-operative bank of the state concerned, shall be deemed to b~ cash maintained in india 2s 23 of 1963 30 " i jv (4::a) (a) notwithstanding anything contained in subsection (1) or in sub-section (2), after the expiry of two years frqlil the commencement of the banking laws (application to co-operative societies) 'act, 1965, or ot such further period not exceeding one year as the reserve bank, having regard to the interests of the co-operative bank concerned, may think fit in any particular case to al1)w-(' (i) a scheduled state co-operative bank, in addi" tiqn to the average daily balance which it is, or may be, required to maintain under section 42 of the reserve bank of india act, 1934, and 3s 2 of 1934 40 4s (ii) every other co-operative bank, in addi,tion to the cash reserve ~hich it is reqlrired to maintaid under section 18, shall maintain in india in· cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which shall-not at the close of business on any day be less ~han twenty-five per cent, or such other percentage not exceeding forty per cent, as the reserve bank may, by notification in the official gazette, specify of the total of its demand and time liabilities in 1ndia; (h) in computing the amount for the purpose ot clause (a), the following shall be deemed to be cash maintained in india, namely:-(i) any cash or balances maintained in india by a c\;roperati ve bank, other than a scheduled state co- s operative bank, with itself or in current account with the reserve bank or with the state co-operwtive bank of the state concerned, or by way of net balance in current accounts and, in the case of a primary co--operative bank, also any balances maintained with 10 the central co-operative -bank of the district concerned, in excess of the aggregate of the cash or balances required to be maintained under section 18; (ii) any balance maintained by a scheduled state co-operative bank with the reserve bank in excess 15 of the balance required to be maintained by it under section 42 of, the reserve bank of india act, 1934; 20t 1934-(iii) any net balance in current accounts erplanation-for the purposes of this sub-section-(a) approved securities, or a portion thereof, 20 representing investment of agricultural credit stabilization fund of a co-operative bank shall not be , deemed to be unencumbered approved securities; (0) in case a co-operative bank has taken an advance against any balance maintained with the 25 state co-operative bank of the state concerned or with the central co-operative bank of the district concerned, such balance to the extent to which it has been drawn against or availed of shall not be deemed to be cash maintained in india"; 30 (iii) in sub-section (6), in clause (a), for the words "fourteen days", the words "thirty tlays" shall be bub~t:u~t~d·': - "0-(i%) after clause (q), the following clause shall be inserted, 1ullj1ely: -'(qq) after section 24, the following section shall be inserted, 35 namely:-power to exempt "24a without prejudice to the provisions oil section 53, the reserve bank may, by notification in the ofticial gazette, declare that, for such period and subject to such conditions as may be specified in such notification, the whole or any 40 part of the provisions of section 18 or section 24, as may be specified therein, shall not apply to any co-operative bank or class of co-operative banks, with reference to all or any of the omees of such cp~operative bank or banks, or with reference to the whole qr any part of the assets and liabilities of such co-operative bajnk or banks"'; 4s  (x) in clause (w) relating to the modincation ot section 15- , ,(a) in sub-clause (i), for item (b), the following item shall be substituted, namely: _ ' , , (b) the following ,proviso shall be insetted at the end, namely:-s 10 "provided that the reserve bank may, jf it considers it necessary or expedient so to do, cause an inspection to be made of a primary co-operative bank under this sub-section by one or more officers of a state co-operative bank in the state in which such primary co-operative bank is registered" '; (b) sub-clause (iii) shall be re-numberei as sub-clause (w), and before sub-clause (iv) as so re-numbered, the following subclause shall be inserted~ namely:-'(iii) after sub-section (4), the following sub-section shall be inserted, namely:-20 "(4a~ without prejudice to 'the provisions of subsection (4), the reserve bank may, if it considers it necessary and expedient so to do, supply a copy of the report on any inspection to the state co-operative bank and the registrar of co-operative societies of the state in which the inspected bank is registered" 'j (xi) for clause (z), the following clause shall be substituted, namely:-'(z) in section 36, in sub-section (1), clause (b) shall be omitted, and for clause (d), the follqwing clause shall be substituted, namely:-, (d) at any time, if it is satisfied that for the re-organisa-~ ' ¥o~ or expansion of, co-operative credit on sound lines it is necessiil'y so to do, by an order in wrijting and on such terms atrdconditions as may be specified therein,-3s (i) depute one or more of its officers to watch the proceedings at any meeting of the board of directors of the co-operative bank or of any other body constituted by it require the co-operative bank to give an opportunity to the officers so deputed to be heard at such meetings and offer such advice on such matter as such officers may consider necessary or proper for the reorganisation and expansion of co-operative credit 01' sound lines, and also require such officer to send a rep"t of such proceedings to the reserve bank; i (ii) appoint one or more of its oftlcers to 0 the manner in which the a1f8lirs of the co-operatiw 011' its offices or branches ~are being cooducted ajji1 ' ' ' report thereon"';;  r:' (:ni) for clause (zc), the following clauae shall be substttuted, namely:-'(zc) in section 46,-(i) clause (iii) of sub-section (4) shall be omitted; (ii) in clause (4) of the erplanation" after the wofds 5 "includes a", the words "co-operajtive society" shall be inserted;'  chapter v amendments to the state bank of india ac:r, 195536 in the state bank of india act, 1955 (hereafter in this chapter ro 23 c1f 1955 referred to as "the state bank act"), after sectiolll 35, the following section shall be inserted, namely:-inlertion 01 new sectioil 8m arrangement with the state bank on appointmentol directors to prevail "35a (1) where any arrangement entered into by the state bank with a company provides for the appointment by the state bank of one or more directors of such company, such provision and is 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, adicles of association or any other instrument relating to the company, and any provision regard- 20 ing 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 state bank in pursuance of the arrangement as aforesaid (2) any direetor appointed as aforesaid shall-(4) hold office during the pleasure of the state bank and may be il"emoved or substituted by any person by order in writing of the state bank; (b) not incur any obligation or liabilitv'l}l·b· b  t' "t\j~u,s , 'to ,ijha e su ~ ',  - pi'· - his being a director or for anything don, -'~   l" ,_" ~~ in good faith in the discharge of hi'~ jties as a director 01 anything in relation thereto; h  -, it  (c) not be liable to retiremen' ~ rotation and shall not be taken into account for computtnp /dumber of directors hable 35 to sueh retirement" ' 3'7 in section 40 of the state bank' amend mentot lit!dion 40 " ~ (i) fot sub-section (1), the fol ig sub-section shall be lubstt· tuted, namely:-\ "(1) the state bank shall furnish to the central govern- 40 , ment and to the reserve bank its balance-sheet, together with \the profit and loss account anel the auditor8~ report and a report by the central board orr the working and aetlvtties of the state bank durina the period clvered bytheaecouna"; (ii) after sub-section (3), the following sub-sec:tion shall be inserted, namely:-"(4) the central government shall cause the auditors' report and the report on the working and activities of the state s bank to be laid, as soon 8s may be after they are received, 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 sessionsu - 38 in section 42 of the state bank act, in sub-section (2), after the 10 word "working", the words "and activities" shall be inserted amendmentol section 42 39 in section 43 of the state bank act, in sub-section (2), for the words "as may be", the words "as may, by general or special order, be" shall be substituted amendmentol section 403 40 in section 49 of the state bank act, after sub-section (2), the i s following sub-section shall be inserted, namely:-amendment of section 4e "(3) every rule made by the central government unqer this act shall be laid, as soon as may be after it is made, before each house of parliament while it is in session for a total period ofi thirty days which may be comprised in one session or in two or more 20 successive sessions, and if, before the expjry of the session immediately following the session or the successive sessions 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 fonn or be of no effect, amendmentof section 50 25 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 rule" '1 in section 50 of the state bank act, after sub-section {3), the following sub-section shall be inserted, namely:-30 "(4) every regulation shall, as soon as may be after it is made under ,this act by the central board, be forwarded to the central r: teec~~ and that government shall cause a copy of the same to be ·~;;-ea~h house of parliament while it is in session for a total period of thirty days, which may be comprised in one session or 3! in two~'-l&vre~essive sessions, and if, before the expiry of the sesslon 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 40 or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validiy  of anything previously done under that regulation"  chapter vi amlalbmjdmi'to 'i'ri: statj: bank of india (subsidiaj(y banks) a t, 1"938 of 1l1li 45 a in the state bank of india (subsidiary banks) act, 1959 jlereafter in thia chapter referred to as uthe subsidiary banks act"), in ,:bapter vi, insertiod 01 new aection 31a, after section 38, the following section shall be inserted, namely:-ci38a (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 5 be valid and effective notwithstanding anything to the contrary contained in the companies act, 1956, or in any other law far the 1 of 1956 arranpment with subsidiary banks on appoint mentof directtors to prevail 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, 10 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-is (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 20 in good faith in the di&charge of his duties as a director or any thing in relation thereto; (e) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement" 25 43 in section 43 of the subsidiary banks act,-amendmentof 1ecti0ll :i (i) in sub-section (1) ,-(a) in the opening paragraph, for the words "and the reserve bank", the words  , the reserve bank al"d !h: ~entral government" shall be substituted;  " 30 (b) for clause (a), the following clause shall be substituted,  namely: -, '\  ' '-\ " ci (a) it balan<:e-sheet, together with the profit and loss account and the auditor's report, and a report by the board of directors on the working and activities of the subsidiary 3s bank during the period covered by the accounts; and"; ' '," (ii) after sub-section (2) - the following subeeti-cm shan be ;" inserted, namely:-" "(3) the central government shall cause the auditor' re-: port and the report on the working and activities of the subsi 40 :~iary bank to be laid, as soon as may be after they are received, ~ore each house of parliament while it is in session fora total petiod of thirty days which may be comprised in one dsilod or hi two or more successive sessions" f4 in section 44 of the subsidiary banks act, in sub-section (2) amendafter the word "working" the words "and activities" shall be inserted ment of lection 44 45 in section 53 of the subeidiary banks act, after sub-section (2) the following sub-section shall be inserted namely:-amendment of section 53 5  (3) where the state bank nominates any of its ofdcers as director of a subsidiary bank, such director shall not incur any obligation ,of liability by reason only of his being a dire<:tor 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  ic)  in section 62 of the subsidiary banks act, for sub1ection (3) the following sub-section shall be substituted, namely:-amendmentol section 62 is 20 "  (3) :every rule made under' this section shall be laid, as soon as 'may be a1ter it is made, before each house of parliament, while it is in sesson, for a total period of thirty days which may be comprised in one session or in two or m:>re 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 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 modification or annulment shall be without prejudice to the validity of anything previously done under that rule "  - , in section 63 of the subsidiary banks act, after sub-section (3), the following sub-section shall be inserted, namely:-amendmentof section 68 25 , (4) every !l'egulation shall, as soon as may be after it is made under this act 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 r, ,35 perj~d 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 ~ ~(~~~:~ following the session or the su'ccessi~e sessions afo~esaid, " '~~ree in making any modification 10 the regulation or ~ houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be 91 aoeftet!t, 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  '"j"  chapter vii aiondudfts to the ~ insurance and credit guarawr' corporation act 1961amend mentof sectiori 2 &'1 of 1981 48 in ection 2 of the deposit insurance and credit gu~tee cor- poratlo1lact, 1961 ~hereaf~~ i~ this chapter referred to 8~the deposit ':+·lnit1tat1ee corporation aet ) ,-)jl "  (i) 'in clause (b), fo!l' the ~ords ~ tlgw-es c~:c-=cl~o:':! 45 and any other banking institution notified undersub ·d· b k" banking regulation act, 11,_" e wor an 1un  th cis t d· si lary an 10 of 1948 shan be,substituted; (ii) in clause (i),-(a) after the words "banking company", the words "or a corresponding dew banko, "shall be inserted and shaube deemed to have been inserted with effect from the 1st day of july, 1971; s (b) for sub-clause (i), the following sub-clauses shall be substituted, and shall be deemed to have been substituted with effect from the 1st day of july, 1971, name1y:- (i) a banking company referred to in clause (4) or clause (b) of sub-section (1) of section 13, or 10 (ia) a corresponding new bank to which the provisioo8 of clause (a) of sub-section (1) of section 13 apply, ol'''; (i1i) in clause (k), the words and figures co, and includes any banking institution notified under section 51 at the said act after such commencement" shall be omitted is 49 in section 6 of the deposit insurance corporation act-(a) in sub-section (2), after the word, brackets and letter ''clause (d) ", the words, brackets and letter "or clause (e)" shall be inserted; amendment of section 6 (b) in sub-iection (3), in the opening paragrapn alter the word" braekets and letter "clause (d) ", the words, brackets and le~r "or 20 clause (e)" shall be inserted; (c) after sub-section (4), the following sub-section shall be inserted, namely:-"(5) if a director nominated under clause (e) of subsection (1)-2s (a) becomes subject 1x>t any of the disqualiftcations mentioned in clauses (a) to (d) of sub-section (3); or (b) is absent without leave of the board for more than three consecutive meetings thereof, his seat shall thereupon become vacant" 50 in section 11 of the deposit insurance corporation act, the words ipd bgures "or as the case may be, after it is notified under section 51 of _ said act" shall be omitted amendment of section 11 ~, in section 13 of the dreplsit insurance corporatioll ad, in subsection, (2), the brackets and letter" (b)" shall be omitted , 35 amendment of lection 13 amendment of beetlod 32 52 in -:tion 32 of the deposit insurance corporatiob act, id ~b­section (2), lor the words "for not less than thirty ~1lhdol'e each houie 01 parliament as soon as may be after each such report is received 1»7 the central government", tbe words "as soon as may be after they are ; i : received, before each house of parliament while it is in session for a total period of thirty days which may be comprised in one session er in two or more successive seslions" shall be substituted 53 in section 50 of the deposit insurance corporation act, after sub-s seotien (a" the following sub-seetion slwl be inserted, namely:-amendmentot section: 10 15 "(4) every regulation shall, as soon as may be after it is made under this act by the board, 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 sesmn or in two or more successivp sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houles agree in makin~ any modification in the regulation, or both houses agree that the regulation should not be made, the regulation shall thereafter have eft'ed only in such modified form or be o~ no eft'ect, as the case may be: so, however, that any sue!! modifteation or annulment shall be without prejudice to t~e vaudity of anything previously done under that regulation"  chapter viii 20 amendments to the banking companim (acquismon and transfer of undertakings) acr, 19705011970 amendmentof section 3 h in the banking companies (acquisition and transfer of undertakinfnj) act, uno (hereafter in this chapter referred to as ''the bank nmionalilation act"), in section 3, in sub-section (5), for the words "one 25 or mare forms of business", the w:ords "one or more of the other forms of husiftess" shall be substituted 55 in the bank nationalisation act, after section 5, the following section shall be inserted namely:-"5a (1) where any arran~ement entered into by a corresponding new bank with a companv provides for the appointment by the cor-30 insertion of new section 5a arrangement with correspond_  __ ·~$a 35 in~ bank onap-p4'int-1lent of directors to prevail 40 respondin~ new bank of one or more directors (1f <'11ch company such pro~~ an~ ap'l:k1int~ent of di~ectors ~ade in pursuance theretec!il  ;,  ,~:,;jiiidtl!'and effective notwlthstanomg a,,,,thine: to ~he con-~ontained in the companies act 1956 or in anv other law for the time bein(! in force or in the memorandum articles of association (1r any other instrument relatincr to the company and any provi-~egailk mare qualification aile limit number n' c:hrectorship~ removal from officp of director!: aoo such like conditions contained m any such law or instrument aforesaid shall not apply to at"" dkeet-or appointed bv the et)nesp')nding new bank ill pursuance' of the arrangement as aforesaid (2) my director appointed a9 aforesaid shall-(a) hold oftice durin£! the pleasure of the corresponrlng new bank and may be rem(1ved or substituted bv any perso' by order in writing of the correspondin!! new bank; 45 (6) not incur any obligation ol" liability b~,:;1oft onlv of bis beine: a directnr or for anythin~ done or omhr- be done in "eod faitn in the discharge of his duties as r or or anything in relation theretoi (c) not be liable to retirement by rotatiod and shall not be taken into account for computing the number of directors liable to such retirement"  amedclmeat 01 mdion 956 in the bank nationalisation act, in section 9, sub  ection (5) shall be re-numbered as sub-section (6) and before sub-section (6) as so 5 re-numbered, the following sub-section and ezplgft4tion shall be inserted, namely:-'(5) on and from the date of coming into operation of a scheme made under sub-section (l) ,-(a) the scheme shall be binding on the corresponding new 10 bank or corporation or corporations or banking institutions, and also on the members, if any, the depositors, and other creddtors and employees of each of them and on any other person having any right or liability in relation to any of them including the trustees or other persons, managing or in any other ~er is connected with, any provident fund or other fund maintaided by any of them; (b) the properties and assets of the corresponding new bank or, as the case may be, of the banking institution shall, by virtue of and to the extent provided in the scheme, stand transferred 20 to, and vested in, and the liabilities of the corresponding new bank or, as the case may be, of the banking institution shall, by virtue of, and to the extent provided in the scheme, stand transferred to, and become the liabilities of, the corporation or cor- 2 porations brought into existence by reconstitution of the bank-5 ing institution or the corresponding new bank, as the case may be -e%pzanation-in this section, "banking institution" means a banking eompany and includes the state bank of india and a subsidiary bank' 30 57 in section 10 of the bank nationalisation act,- -,w "  amendment of ~on'lo(i) after sub-section (4), the fcllowing explanations shall  be inserted, namely:-\ "explanation i-for the purposes ofi this act,-  \ "\ "\ \, (a) the balance-sheet shall not be treated ai· not di~clos- 35 tng a true and fair view of' the affairs of the corresponding new bank, and (b) the' proftt and loss account shall not be treated as not showing a true balance of profit or loss for the period vered by such account, 40 mere! by reason of the fact that the balance-sheet or, as the  case m be the proftt and loss account, :does not disclose any matters  ch are, by the provisions of the banking regulation act, 1949, ad with the relevant provisions of this act 'or any 10 of 1940, other act, required to be disclosed  , 45 explanation ii-for the pu'l"poses of this act, the accounts of the corresponding new 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 corresponding new bank is, by virtue of any provision contained in the banking regulation act, 1949, read witfi the 'l'e1evant provisions of this act, or any other act, not required to disclose; and (ii) the provisions referred to in clause (i) are specified 10 in the balance-sheet and profit and loss account of the corresponding new bank or in the auditor's report"; (ii) after sub-section (7), the following sub-section shall be inserted, namely:-"(7 a) every corrt-sponding new bank shall furnish to the 15 central government the annual balance-sheet, the profit and loss account, and the auditor's report and a report by its board of directors on the working and activities of the bank during the period covered by the accounts"; (iii) in sub-section (8), for the words "for not less than thirty days 20 before each house of parliament as soon as may be after each such report is received by the central government", the words "as soon as may be after they are received 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" shall· 25 be substituted; (iv) after sub-section (r), the following sub-section shall be in~ serted, namely:-ii (9) without prejudice to the foregoing provisions, the central government may, at any time, appoint such number of audf-30 tors as it th:nks fit to examine and report on the accounts of a corresponding new bank and the auditors so appointed shall h~ve';a?:r~· • "1js  ~ts, privileges and authority in relation to the ~  ~~~counts of the corresponli~ng new bllnk which an a'i:jw]yf' appointed by the corresponding new bank has under 35 this section"  -  \ /1, \ \ i ',i '    j& in ~lfiiftro'hhe bank nationalisation act, after sub-section (3), tbe following sub-section shall be inserted, namely:-amend-ment ot section 19 45      "(if) every re~laflon shall as soon as may be after it is made under this act by the board of directors of a correstlonding new bank, be forwarded to the central government and that government s1aa11 cause a copy of the same to be laid before each house 01 parlia-,ment, while it is in session, for a total period of thirty days which maybe 'comprised in one session or in two or more successive sessions, and if,before the expiry of the session immediatelv following the session or the successive sessions aforesaid, both housrs agree in making any modification in the re~latfon or both houses ali{l'ee that the regulation should not be made the regulation sjl1jj                                                                           thereafter have effect only in such modified form or be of no erect, as the case may be; so, however, that any such modification or andulment shall be without prejudice to tbe validity of ~thing previous1y done under that regulation&>  chapter ix akmidmdts to nu: rbmenal ruiw banks ar:r, 1976 s21 of 19'16 5 • in section 19 of the regional rural banks act, 1978,-am~d­ment of iectioo 19 (i) in sub-section (1), for the words "central government", the words and figures c'reserve bank of india constituted under section 3 of the reserve bank of india act, 1934," shall 'tie substituted; 201 1934 (ii) in sub-section (2) for the words c'regionalrural bank may 10 fix with the approval of the central government" the words ''reserve bulk may, in consultation with the central government, flx" shall be substituted; - (iii) tn sub-section (4),-(a) in the openin~ para~aph, after the words c'shall make is 8 l'enorl to that bank", the words "and the central government" shall be fnserted; (b) in cllulle (e) after the wol'ds cto the notice of the re-2ional rural bank" the wol!ds cland the central government" shall be inserted 20 21 of 1976 6ft tn i':f>~tion 20 of thf' 're~onal rural banks act, 1976 the followfdl! proviso shall be inserted at the end, namely:-amendment of section 20 "provided that the central government mav, if it conslifers it necessarv so to do in any case extend, the saiet j)erfoet of slxtv days for the fumishine; of the renort by such further period or periods not 2s 21 of 1976 exceedfn~ sixty days in the aggregate" --81 section 30 of thp rellional 'rut'al bank!; art 1976 shalt be re-numbered lis sub-r~ction (1) thereof !'met rfter !rub-i':el'tion en as so re-numbered, the following inth-sedion !;hall be inserted, namelv:-amendment of lection 30 cc (z) everv rel1u1ation shllll as soon as may be after it i!ll ",ade 30 under thir act bv the bnard he forwarded to the central government and, thrt government shall ca11:'qe " cnmr of the same tf)bp lrid before each house of parliament whhe it i8 in session for a total ~od of thirty culys ",latch may be comprised in one session or in twoot' more ~ccessfve sessions and if before the expiry of the session immeff'at,]v 3s follow\nf! the !l!e!!rinn or thf' ~lcc9mive 8emtons afo1"esrff! both "oua-es agree in making any moduication in the rejtwation or both hourpi': agree that the resmlatjon sho~ld not be- made the rectulation· shan thereafter have effec:t onlv in such modhi@d fonn ot be of no effect as the ~se may be: so however that aftv such mnmfteatfon or an- 40 nulment, shall be without 1jreju~e to the valtdity of ~nyft\fnti· -previously do~ under tbat regulauoft"   sta±ement of objects and reasonsthe bill seeks to amend the bankers' books evidence act 1891 the reserve 'baftk 'of india act, 1934, the banking regulation act: 1949: the state bank of kldia act, 1955, the state bank of, india (subsidiary banks) act, 1959, the deposit insurance and credit guarantee corporation act, lt61, the banking companies (acquisition and trander of undertakings) act, 1970 and the regional rural banks act, 1m, in purswlllce of the recommendations of the banking commission and of the committee on subordinate legislation and also in the light of the experlenee gaibed in the administration of those ads the following are the !l'lol'ie important of amendments proposed in the biu:-(i) it is proposed to provide for the facility ~ nomination to a 'deposi'to'!", to nominate a person who could be paid, on the depoliter' death, the amount to the credit of the depositor's accounts likewise, the ilominee ~f a person who has kept articles in safe custody with the bankers or has hired a lockler will be able to get the articles kept in the bank's safe custody or locker in the event ofi the death of such a person the banks wi'n be required to keep an inventory of the articles returned to the persons concerned in the jii8lidier as may be directed by the reaerve bark flom time to time (ti) '!be scope of the purposes for which banks can form subsidiaries is being widened (iii) it is proposed to authorise the reserve bank of india to increase the liquidity ratio to be maintained in india by banks from 25 per cent up to a maximum of 40 per cent of the total demand and time liabilities of banks in india and also to empower the reserve bank to impose a penalty on banks which do not comply with 'the liquidity requirements of section 24 ofi the banking regulation act, 1949, on the lines of similar provision regarding mam'tedalloe of ,cashreaerves contained in section 42 of the reserve  buk of iadia act, it34 (w) seetlons 45r, 45s and 45t of new chapter iilc, sought to be fn8~ ;tr\eacs~rve bank of india act, 1934, provide that f' jio'1i1d!vidu!lt ar "bffii or ';m unincorporated association of individuals shan at any tiihe, have deposits from more than the specified iud!lber of deposrtbrs mentioned therein the officers <sf the reserve dank or the state governments, authorised in this behalf will have ~w:j'';'11 search warrant from a court so as to enable tnem to· enter into and search any premises suspected to be used for purpose» connected with the receipt of deposits in contravention of the provisions of the act and also to inspec:t and seize registers, books of accounts and other documents ~) provision is being made to empower the reserve bank to grant medium term loans from the national agricultural credit (stabillbation) fund to state co-operative banks by way of reimbursement of medium term conversion loans granted by the latter owing to drought, famine or other natural calamities, if the state co-opera:tive bank concerned has no due'3 in respect of the bllla of, exchange and promissory notes outstanding to the reserve sank " tbestabiliution fund is also proposed to be utilised for giving relief wherever crops are damaged on account of war or military operations with another country the period o~ repayment 'is proposed to be extended from five years to seven years (vi) it is proposed to amend the state bank of india act, 1955 and the state bank of india (subsichary banks) act, 1959 for laymg before each house of par~iament, as in the case of natonaliaed banks, the auditors' report and the annual report on the working of the activities of the banks (vii) the banking regulation act, 1949 is being amended-(a) to empower the central government to frame rules specifying the periods of the preservation of the various types of records, such as, books of accounts and documents required to be maintained as also of the different instruments paid by it; all (b) to provide that banks may return at the request of a customer a paid instrument before the prescribed preservation - period, only after making and keeping' in the bank's possession a true copy thereof made by mechanical processes ,(viii) the bankers' books evidence act, 1891 is being amended-(a) to provide that during police investigations it would be sufficient for a bank to produce before police authorities certified copies of relevant extracts from its books unless the production of copies is considered not adequate by an officer of a rank not lower than a superintendent of police; (b) to make it clear that if, the original documents are destroyed by a bank in the usual course of its business and documents have been microfilmed before such destruction, the positives of the films shall be admissible as evidence provided they are properly produced and proved in court (iz) it is further proposed to amend the state bank of india act, 1955, the state bank of india (subsidiary banks) act, 1959 and the banking companies (acquisition and transfer of undertakings) act, 1970 so as to provide a certain me~~1,ll'~, of protection to th~ directors nominated by such banks on i~ boarda of ~ompanies assisted by them against prosecution as a result of non-compliance with provisions, like, share qualification, age limit, n~ of directorships, removal from office, retirement by rotation, etc, contained in the companies act, 1956 or any other law or the memorandum or articles of association of the concerned unit (::) it is further proposed to include the usual provision for laying of rules and regulations made under acts before parliament in the banking regulation act, 1949, the state bank of india act, , ,)950, the st\lte bank o£ india (subsidiary banks) act, ;1969, the ~i!posit insurance and credit guarantee corporation act, 1961, the banking companies (acquisition and transfer of undertakings) am, 1970 and the regional rural banks act, 1976 2:' the ,notes on clauses explain in detail the various provisions cont:~ined in t'tje bill new dam; h 'm~ patel the 15th december, 1978 cztwse 2-this clause seeks to substitute clause (4) of aection 2 of the bankers' books evidence act, 1891 so as to amplify the deftnition of t4e term "legal proceeding" by including therein any investigation or inquiry under the code of criminal procedure, 1973, or under any other law for the time being in force for the collection of evidence conducted by a police officer ~r by any other person (not ~g a magistrate) autilq-psed in this behalf by a magistrate or by any law for the time being in force this clause also seeks to amend clause (8) of the said aection so as·to provide that a copy made from the original document by mechanical or other process insuring the accuracy of such copy, together with a certificate to that effect, as also a copy prepared from the origlnal docu· ment prior to the destruction of the original by a bank in the usual course of its business, together with a certificate to that effect, shall be admissible in 'evidence these amendments are based on the recommendations cd! the banking commission this clause further seeks to mcorporate a new section in the bankers' books evidence act, 1891, 10 88 to provide that the order of a court or judge for production and inspectiod of boob of the bank shall be construed as referring to an order made by an ojbcer of a rank not lower than a superintendent of police as may be apecifte4 ill ,this behalf by the government by which the police officer or any other person conducting the investigation or inquiry is employed cla1tse 3-under section 45 of the reserve bank of india act, 1934, the reserve bank may appoint any other bank, except the state b8dk or a subsidiary bank, as its agent only under the direction of the central government this clause seeks to amend this section permitting any payments required to be made into the reserve bank or in any bills, hudcii8 or other securities, required to be delivered into the reserve bank udder any law, to be delivered to, or paid into, the agency bank clause 4-this clause· seeks to amend section 451' of the reserve bank ()f,i\,\'liia p~~ so as to revise the existing definition of the terms ··dep tee\ i¥ • ~,  ~d make consequential amendments as a result ot the rr:s~ of' n~section 45s in the act vide clause 5 clause 5-this clause seeks to insert new sections 45r, 45s and 45t under new chapter iiie of the reserve bank of india act, 1934, 80 88 to prqvide th~t liq~dual or firm or ~ unincorporated association ot indivi~uals shall, at any time, have deposits from more, than the number at depositors mentioned therein it also seeks to vest m the oftlcers of the reserve bank or the state governments, authorised in this behalf, the power to obtain search warrants from a court so as to enable them to enter in to and sea~ch any premises suspected to be  used for the purpoml ~onnected with the receipt of deposits in contravention of these provisiodl, as also to j'nspect and seize any registers, books of accounts and docu· ments or any literature found therein such warrants shall be exeeu~ in the same way and shall have the same effect as a search warrant iiil1 tmder the code of criminal proce,dure i cz 6 ouse-thl' clause seeks to amend section 46b of the reserve bank s mew term loana from 1be at india act so as to empower it to grant um  national agricultural credit (stabilisation) fund to state c()-()perativa banks by way of reimbursement of medium term conversion loans granted by the latter owing to drought" famine -or other natural: calamities, it the state co-operative bank: concerned has no dues in respect 0' the bill ~  f'-e""imbe' and pi'o!rilildrr notes outstanding to the reserve bank the ~ stiiimliaitibn)1\m4 js also plioposed to, be utilised for giving relief whei'--(8vw c:ropa' are <lamased on account of military ~tions with ailother, -,:eotmtry: tile ,period 'of repayment of medjmn term loans sanctioaed to b' state "co-operatlve" banks is proposed to be extended from five ye8!l' io  en yeara' ,  ~ ,:, l, i 1·,,;gjaw~'7 gad 8~th,ese clauses seek to amend respectively smdon •• _d sectioll sse of the reserve bank of india act with a view to 1~:tor penalties for· contravening the provision ot new section 45s , qf iha~,act; n  ';,,' :~~¥se 9-th;if ,cia" seeks to amplify the existing definitions ,in sectioq'~ ~f the banking ,regulaiion act, 1949 of the term "approved 'iee\l ,ritieaf',lt;·a4o seeks to incorporate in that sectilon the c:leftaitions otthe ~ "agric~tural refinanoe and development corporation", "corne-1p9~g ~,bank", "iddwltrial development bank of india", "regional ~:~" ",~ bank", and "state bank of india" j-"<~, i" ; cl4~ jo-tlua clause js consequeatial to the inclusicm in seetiod' & g! the :s8nkingiwlgwation act, 1949, of a deftnition of the tend "con __ ponding new bank" ~1' i', ;~~ 11~~ clause i consequential to the' amendment made bj ~o1i '5' of th'e xgrl~fural' reft11ance corporation (ajnenamen~ act, '11m by' wtrlt-h'agrkditul-aj ~ftnanc'e corporation has been renamed sa ~tura1 'ftefininice and development corporation i  r~: ,'~ '\ '  ,'\,"  - clause 12-'rif1k clause 'seen to amend section 7 of the b~ begu-~ act, 1t49,so, as ,to clarifytberein that no, ~ otha': thm a :ntawng ,~~ shall ;use bl!ly of the words, piz "ba:&~,', ~ba~ or ~h~'''l'u'pari of itaname, or even in ~ wltn da busineae  ,czause,13-:tbis clause seeks to amend section 8 of the banking beau-:bluod: act/f9d~in pumurnce q1 the reconunendatlon of the banktdg com· ~oll' to"proviae'~al the provisions of the said section do not' btt the b~~which the 'central gov-emment may sp~1fy under section ",(t)(o) ~'iu; a'fortb''of busfuess'in which it is lawful tor a banlting compant f61-j~tli· '" , ',)ii ~ilo ,~ ~" cuz~·l4-this c18use'seeks:'to amend section lob of ' the banldbf ~~~~n, act;' r~; ~ as to ~ inapp1i~able' to' banks witli',depos1-r: 9f""lts 10 erores or less, the'mandatory provision' of tbts sectlatx'that eftl'j: ti~n~,,,c~~y ~~a~'have a ~hoie-tjme chairman this cla~''''  w pro~4~ that once the deposits of a bank have aggregated lb it crorei or'mo~e, it 'sha11always have such a w'hol~t1m'e chaitman eved" though its deposits may, rater, go below rs 10 crol'es this clarlj'furtliet' seeu to ppo'ritte 'that a chairman whose term at oftice bas coide" to- lid cd iacitertatn dlwll1s'la1lcea shall, aubject to the approval of the' b - ve bank, continue in office until his iuc~ 8yum81 omce  : " -!-,,,i , - i ~e 15-t~ elauee seeks to insert a new section lq~b, in :~ b~kin8' re~ation act, 1949,80 as to empower the reserve, ~d,k to, aq)_ pomt, pending agreement between the reserve bank and the' banking -company concerned, any person as the chairman of that bankiqgcpdij)any when the offlce of its chairman remains vacant fora,long ~ -an~ ,w~~, tnthe op~on of the reserve bank, the interests oi  the,said'lj~,cswl­pany are likely to be adversely affected hy ~the smd office $0' iemar~418' vacant  , r, (' cl4u1e 16-this clause seeks to substitute section' loe of ~e ,b~g regulation act, 1949, so as to provide that a chairn)an, ,of a bim~ cq~­rpany whether appointe~ by the banking company jtseu or br' thej~~~i:ve bank, shall not be required to bold any ;qualifi,catipn sbar:es in ~~e ~wt-1", company , - ~ ! i clause 17-this clause seeks to substitute section 18 'of the j~~ilkful regulation act, 1949, so as to provide, in accordance with the ~mmen dations of the banking commission in this behalf, tha,t the cash "serve which t!very nlon-scheduled banking company is required to l1)atn~l3fn in india shall be maintained by it only with )e reserve b~k a~4' not, with the reserve bank or the state bank or tndfa or ;my otlt~r ~abk notified by the central government in this behalf at the"s~llle tfm~: it , -,  ( ' i( seeks to introduce the concept of "net balance" for tbe purpose of atjrv ing at the amount of "balance in current account" whicq ,is to be ~reated a! liquid asset in terms of this provision, each bank will be requi1"e'd to work out the difference between the balance1l held by, it i~,\~ent aecount with the public sector banks and the balances whicry ,ther p~p,1fc sector banks mav have in current account with it and include in its liquid 9ss~ts only the ·~xcess if an:v of the former o,'er the latte~ th~ cllf\'l"le further seeks to modlfv the definition of tile tf'rm "liabilities in rn~na" ot'alrring in the "e:rplanati01l" below existing' section 18 dr n~e afo:~e­said act in respe~t of which minimum ('ash balances ,are' t, b~~atn­tained by everv banking comp~ny, not peint:r a scheduled bank !~ the ease of a bankin~ company not being" a scheduled bank, only ~he"eet ljl:lbflitv of that bank to th!' entir? ban~7in~ system, that is, after decftl(,-flon ~f tt\i ~r~~es 1ntained by it :"ith all ~th~r b~nks ~r~m it~ l!t'os~ in ', __ ~,:~' er hanks ~mn he deemed ~ be its !ni"'~llo/ to tors of'{'ftnks, 1 rposes of sections 18 and 24 of the s9f~ act hirers of safety  " the manner lau1le seeks to amenrl !'!edion 1!l of the tia!!kfl1lr under the said so as to ampur", in pursuance of the 'recomh:ten~li-,c~~~! the p ~ commission the sec"", of the gaid 1leot'llon "rfth a view t, enahl nt! t ~ 'banks to form lnlbm<li;)ri~~ for ~ar'1':vin'st ono"p',o!' mo~e' kinds of hu'line!>s which the'v tire permitted to enra~ \hi; ot' ~h1ch mliv be ('on-:1urive to, the 1lprnir'! (if bn"ki,,!! in tnrliq at present, -the l'o~er of the banks ir connncrl ot\h, to ""ormtion, elf subsidiartes for undertakinq; and executin~ tmlstc; ooministratio" r (')f 'ec:tates as ~tltor tru!':tees or· otherwise, the providin~ of sa"c rl('posit vault!':, ctr clcrtte 19-this clause seeks to pm~,a s(>cti~n 20(1) (h) nm~"'f thp bankin(! re!!ulation art, lr149 l'lo as to provl~e that a banjdn!{f·c9pm~iny ig pre~luded from ~antjn!:! nnv lo"lns ~r ~dvano:'e~,to ~sp~lij,i;llary or hnmln~ eompnnv eve''' when the b~nkin~ c(')mp~t1:v s dli1'ctt)t ,is only 4mter~ted in th; hclldjng compam"s ~\lb~ldiar;v qr ~ h~e bolding-hmpttny 'of the subsidiary as director, managing agent, manager, employee or guarantor or in which he holds substantial interests clmire 2o-this clause seeks to amend sub-s~tion (3) of section 22 ~ the banking regulation arl, 1949 so as to widen the scope of the matters which the reserve bank may consider before granting a licence  to a company 'to carry on banking business in india ' , clauae 21-th'is clause seeks to amend section 24 of the banking ~atton act, 1949, so as to em-power the reserve bank to incr~ase the llquid,ity ratio which the scheduled and non-scheduled banks nre required to tnaintain in india" from the present statutory minimum limit of 251 per cent to a maximum o~ 40 per cent of their total demand and time uabuites in india the cl~use also includes amendments consequehtial to the amendments proposed to section 18 of the act; vide clause 17 of the bill cl4use 22-this clause seeks to amend sectiop 29 of the banking ~lation act 1940, so as to clarify that the period soccified in subeect:lon (3) of section 210 of the companies act, 1956 relating to preparation of the balance-sheet and profit and loss account shall in the case ~ a banking company, be the period ending with 'the jast working day 01 the year immediately preceding the year in which its annual general m~ting is held cl4uae 23-this clause seeks to amend section 35b of the ;bjlnking regulation act, 1949 90 as to make the reserve bank's approval neccssny for any change in the maximum permissible number of directors of a banking company it a1s> seeks to remove the existing' dual control in regard to the managerial remuneration in the case of a banking c~m­'pany, one bv the reserve bank under section 35b of th  rankin[! re(l'il-jation act, 1949 and the other by the government of india in the cil"'cumstances mentioned in sub-section (4) of section 198 of the companies act,1956 cicmse 24-this clause seeks to amend secfl~i36ab of the bankiii~ regulation act, ,1949 so as to remove the limit on the number of adcli  tiona! directors which the reserve bank can appoint under that section ('lause 25-under section 464 of the companief act, h}56 as amend-- in 1980, the high court may' digpense with the appo1ntment f)f a committee of inspection thi,~ clause seek!': to " mdkl" t'nnsequential amendments to section 42 of the banking pegula~ion act, 1949 - clatme 2s-in additfon to making some textual changes in section:' 45 of the banking regulation act, 1949, this clause seeks to amend:' (i) sub-section (8) clf the aforesaid sectif)n !;o as to makr- it ('1(',, that the scheme of amalgamation of one banking company with any 1?ankfng institution shall also be binding on the tnlstces or other per-iods managing, or in any other manner connected with any ,provident fund or other fund maintained by any such company or the transf~ dank' ,  '"'" , j '(ii) sub·section (15) of the said section with a view to confldjda th@ scope of the definition of the tenn ''banking institution" to ail1 bankin,e!: company, state bank of india, a subsidiary bank or a corresponding new bank; and (iii) the said section by adding an e;rpozanation thereto 10 as to avoid a claim by an employee of the transferor bank that he should be ¢ven in the transferee bank the same "rank or status" as he had in the transferor bank at the time of amalgamation clatl8e's 27 and 28-these clauses seek to amend respectively section 45a and section 45j of the banking regulation act, 1949, 10 as to replace c the reference to code of criminal procedure, 1898, by a reference to the code of criminal procedure, 1973 clause 29-this clause seeks to amend section 45s of the ban1cidr regulation act, 1949 so as to replace the reference to chief presidency magistrate or the district magistrate by a reference to chief metrooolftan magistrate or the chief judicial magistrate respectively these ame'ndments are necesflitated by file corning into force of the code of criminal procedure, 1973 clause 30-this clause seek~ to insert new sections 45y, 46z 45za, 45zb 45zc, 45zd 45ze and 45zf in the" bankin'! re~tion act, int, based on the recommendations of the banking commission, so as-(i) to empower the central government to frame rules speelfyfn~ the periods of preservation of various types of records  such as books, accounts and documents required to be maintained by a bankinc! company as also of the different instruments paid by it (sec-tion 45y); '(ii) to enable a bnnk to return at the request of ii customer "(including government departments and ~atutory co~tiljns) a paid instrument, before the" prescribed preservation period, only after eout~kin--; and keeping in the bank's p:>ssession a true copy thereot in ~h~k" i processes (section 45z); tors'~s', pe er a bank to make' payment 'to the nominee of - hirers of safety 10 ount to his credit, in the event of the latter's death, !(;he manner presc under the said a celled in the pre ct a bank against any claim of the third party to the _'~y _1 deposit (sec ion '45zb); i (v) to enable a bank to return the articles kept by a person in the bank's safe custody to the nominee" or the person appointtid under sub-section (2) of new section 45zc in the event of the death of the person leavin~ the articl~ in safe custody after maldng inventory of th(' articles in the manner directed by th~ t~aer;e bank, the inventory being signed by the person rcccl': g ,e ar -cles (section 45zc); (vi) to protect a bank against any claim, to any articles, made ~ ther than the person who placed the article in l81e any person o· , ti custody with the banking company (sec on 45zd) - ,  (wi) to enable a bank to release the contents of a safety locker to the nominee or survivor of the hirer of such locker in the, event of -the 'death of the hirer, by making an inventory of the contents of a safety locker in the manner directed by the reserve bank, the inventory being signed by the nominee or the survivor as also to ~protect the bank against any liability for so releasing the contents ;   of the loeker (section 45ze); (~ii) to protect a bank against any claim to the conten,ts of safety locker, made by any person other than the hirer (or his nomi~ nee) of such locker who placed the articles in the safe custody with the baaking company (section 45zf) clause 31-this clause seeks to substitute sub-section (4) of section 46 of the banking regulation act, 1949, so as to make a failure to comply wtth any term eontained in, or condition imposed by any order rule or direction, and a failure to carry out the terms of an amalgamation sanc~ tioned, under section 45, as offences punishable under section 46 ' clause 32-this clause seeks to amend section 47 of the banking'regu-iation act 1949 eonsequent on the coming into force of the code of criminal procedure, 1973 clmue 33~tbis clause seeks to amend section 51 of the banking regutilubn act 80 as: (i) to make the prohibition contained in seetion 20 thereof against making advances to companies having acommon diredtor, inapplicable to advances by the public sector banks to companies in which the  central government or the reserve bank or a corporation owned by ,tluatbadkholds 40 per cent or more of the paid-up capital; (ii) to extend the statutory protection given by clause (c) of the proviso to sedion 51 thereof also to an officer who may be nominated on the board of a conesponding new bank 01' a regional rural bank or'of a' banking company an,l also to an officer of a corresponding ,!'lew bank or a regional rural bank or a subsidiary bank who ma~ be nominated on the board of another bal"y~_"~i, _ " ),'" '(iii) to provide that a nlle or direction made under the act shan also apply to the state bank of india any corresponding new bank, a regional rural bank and a subsidiary bank ouler amendments proposed to be made by this clause are of a con-sequential nature ,c14ue 34-this clause seeks to amend section 52 of the bankin~ regu-:1atlcn act, 1949, so as to provide fc"!r layinr, of rules made by 'the central -govemment under the aforesaid act before each house of parliament the ·ra:deftdment41lso'seeks to dispense with the ('on~ition of previous pubuca-·1jan ot the niles to be framed under this section clame 3'i-section5ft of the bankinj! regulation act, 1949, specifie! the modifications to certain sections of the act in their application to ·~rative ·banks this dause deals with the modifications of the tejevant sections as a result of the proposed amendments to the ~l1kjng htj1llatiqn mt ~ jm~t mocu1\clltion/j ~~~:  (i) the, proviso' proposed to be substituted for the ex:istin"j'ft'o-viio to section 8 (relating to prohibition of trading), providea thatl ~ period for completing any business referred to in that sectioll '\yiu de extended only up to the expiry of one year from the commencement of the amending legislation (ii) the proviso proposed to be substituted for the second pm--i viso to section 9 empowers the reserve bank to ex:tebd the period' of seven years for disposal of non-banking assets of a co-operative bank, if the reserve bank is satisfied that such extension wouldbe in the interests of the depositors of the co-operative bank (iii) a new section--section 24a-is proposed to be inaertacl' empowering the reserve bank to exempt, by notification, my eo , operative bank or class ot co-operative banks from· the appu~ , of the whole or any part of the provisions of section 18 or,section,'~ of the act with reference to all or any of the offices of such co-opera  tive bank or co-operative banks or with reference to the whole' ,o~ any part of the assets and liabilities of such co-operative bad&-«! co-operative banks and for such period and subject to such condi;tilqal as may be specified in the notification (iv) clause (d) of sub-section (1) of section 36 isproposecl to be substituted by a new clause which would enable the reserve ~ to depute one or more of its officers to watch the prcx:eedfugs at,~, meeting of the board of directors of a co-operative bank or to' appoint its officers to observe the manner in which the affairs of the co-operative bank or its offices or branches are conducted and make a report thereon clause 36-the clause seeks to insert a new section 35a in the state bank of india act, 1955, with a view to providin, certain pmtectmm\ to directors appointed by the state bank on the boards of companiea ~~ g1 it against prosecution as a result of noircomp~e withtbepro~ , ~ii'~,ad in the codl~ act, 1956, or any other law or the memorall4udi  or articles ot assoe~n further seeks to provide that such a ~tor iihall ~ld office during the pleasure of the state bank and may be jivdloved by it :i-itrther, such a director will not incur any, obligation or ~bruty b7 reason only of his being a director or for anything done or onutted to be cio:i1e in good faith in the discharge of his duty as a director   cl""~"" ~7~"""'inadditjon to rnakingsornetelttya!' changes m:lic'tiow-e of the state bank ollnaia act, 1955, this cllmse'seeb toamf!lmi't)~~ ~ 80 as: (i) to disperuiewithtbe period within which the accounts ofthe bank are to be submitt«ho the central government and the reierm bank'i and 1 (to to provide ,for laying before each house of p,liament tlw, auditais' report add the report on the woll'jqng and ~vi~ ot the state ,bank of india, as is done in the case of the nationalised hanks c101aose 38-the amendment to section 42 of the state bank of ~ act 1955 is consequential to the amendmenf prop0a4 te' 1ctioil- 4ft;! , , " " 11m ae$ bf clauae 87 g -czau,u 39-this clause seeks to amend section 43 of the state bank ciiilddia act, 1955, so as to empower the central board of the bank to delegate by general or special order the powers to the officers of the bank clauses 40 and 41-these clauses seek to amend section 49 and section 50 respectively of the state bank of india act, 1955, so as to provide for layidg of rules and regulations made under the aforesaid act before each howie of parliament ciase 42-this clause seeks to insert a new section 38a in the state - hank of india (subsidiary banks) act, 1959 (on the lines of new section 35a proposed to be inserted in the state bank of india act, 1955, by clause 36) with a view to providing certain protection to directors appointed bya subsidiary' bank on the boards of companies assisted by it against prosecution as a result of non-compliance with the provisions contained in the companies act, 1956 or any other law or the memorandum or articles of association it further seeks to provide that such a director shall hold office during the pleasure of the subsidiary bank and may be removed by it further, such a director will not incur any obligation or liabilliy 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 duty as a director clause 43-this clause seeks to make some verbal amendments to section 43 of the state bank of india (sub~diary banks) act, 1959 and also to pro\?ide for the auditors' report and the report on ,the working and activities of 8 subsidiary bank being laid bef~re each house of parliament clcute 44-the amendment to section 44 of the state bank of india (subsidiary banks) act, 1959 is consequential to clause 43 ciguie 45-1'his clause seeks to amend section 53 of the state bank of india (sublidiary banks) act, 1959, with a view to providing that the ofbcer nominated by the state bank 8s a director of its subsidiary bank iiha1l not incur any obligation or liability iby t'e~~y of hi~ hpiug 'a director or for anything done or omitted to be dol 10 good faith in the discbarge of his duty 88 a director ~  ~) , ~ (;taube, 46 crnd 47-these clauses seek to amend section 62 and section 63 respectively of the state bank of india (subsidiary banks) act, 1959, ao as ~ pl'ovide for laying of rules and regulations made ud'det ~~n<?re-i mid act before each howle of parliament clause 4b-this clause seeks to amend the definition of the term "blajring company" in clause (b) of section 2 of the deposit insurance iijd credit guarantee corporation act, 1961 by omitting the expression "and any other banking institution notified under section 51 of the banking regulation act, 1949" this clause also seeks to amend the definition of the term '"insured bank" in clause (i) of that section so as to include therein h8 corresponding new bank", with retrospective effect from the 1st july, 1971, since clause (1) of section 2, as substituted by t~e deposit \juurance corporation (amendment) act, 1968 which came m~o force from tbe 1st jwy, 1971 did not include a reference to correspondmg new »anki thii clause also mu,s 'amiitndmenta consequent on claus~ 33:~  c&cuse 49 this clause seeks to amend sub-section (2) of section 6 4»f the, d~t lnsura,nceand credit guarantee corporation act, 1961 mpi~ a vlew to providing that the additional directors appointed under ~iiqd &(1) (e) of the act shall hold office for a t~rm not exceeding four yeu;a as may be ~ecified by the central government further, it seeks  kio  amend iaub-section (3) of section 6 of the act so as to provide that - 4kecto,r nominated by central government under clause (e) of bub-mctiol) ~1,) ()f ~ction 6 shall not be capable of being nominated as a ,dir~tol' in the circumstances indicated in sub-section (3) it further seeks ~ insert a new sub-section (5) so as to provide that the seat of a direc- nominated under sub-section (1) (e) of section 6 shall become vacant in, ,speeided circumstances ,c1ause 5o-the amendment is consequential to clause 33 clause 51-this clause seeks to amend section 13 (2) of the deposit iuurauce and credit guarantee corporation act, 1961 so as to omit tqe nf,reqoe ~ clause (b) in that section on the ground that the proviaiolls of section 22 of the banking regulation act, 194e, are not appli-(_ie to the corresponding new bank vide section 51 of that act clause 52-this clause seeks to make textual changes in sub-section (,2) of sec,tion 32 of the deposit insurance and credit guarantee cor-,pqiation act, 1961   ciause sa-this clause seeks to amend section 50 of the deposit 1n8urance and credit guarantee corporation act, 1961, so as to provide ~r~1ng of regulations made under the aforesaid act before each house of parliament cla~e m-this clause seeks to make textual changes in sedtion 3 of the ~ companies (acquisition and transfer of undertakings) act, 1970 cwu3e 55-'i'his elause seeks to insert a new section sa in the banking companies (acquisition and transfer of undertakings) act, 1970 (on "rtlje_~esof new; sec~on 35a proposed, to be inserted in the state bank pf"lndiaact, 1955, by clause 36) with a view to providing certain pro-' tectiolli to~: ;"~'rppointed by a nat~onalised bank ail the ~ of ~~kg ~ by it against prosecution as a result of non-compliance with,f  provisions contained in the companies act, 1956 or any other 1a~~ the memorandum or articles of associati~n it further seeks to pr tlde that such a director shall hold office dunng the pleasure of the nationalised ~d may be removed by it further, such a director will  ~ • ----ty obligation 01' liability by reason only of his being a ci ~orrnything done or omitted to be done in good faith in the ause  to e of his duty as a director 'h co-~ clause 56-this clause seeks to insert a new sub-section in section 9 o! the banking companies (acquisition and trallsfer of unde~akings) act 1970 so as to specifically provide that a scheme made under section 9 (2) () f that act shall be binding on the creditors, depositors, emleo d ther persons affected by it this clause further seeks t;q ~ oyees ~ °definition of the term "banking institution" in the said ~rpora tha lines of definition in sub-section (15) of section 45 of the i7c'\iwon on e b 1ri n  l  tion act 1949 as proposed to be amended by clause 26 ~ni~"'-" clause 57-this clause seeks to introduce two "explanations" in section 10 of the banking companies (acquisition and transfer of undertakings) act, 1970 on the lines of the corresponding provisions in the companies act, 1956 dealing with the scope of the auditors' reports in the matter of certifying that the balance-sheet exhibits a true and fair view of the affairs of the nationalised bank concerned this clause further seeks to insert new sub-section (7a) in section 10 so as 'to rationalise the existing arrangements regarding the furnishing of ita 'annual balance-sheet and accounts together with the auditors' report and the annual report on its working and activities by each nationalised bank to the central government and to make textual changes in sub-seetion (8) of the said section it also seeks to insert new sub-section (9) in section 10 of the act so as to empower the central government to appoint, at any time, such number of auditors as it thinks fit to examine and report on the accounts of a nationalised ba~k clause sa-this clause seeks to amend section 19 of the banking companies (acquisition and transfer of undertakings) act, 1970 80 88 to provide for the laying of regulations made by the board of directbrs of a corresponding new bank under the aforesaid ac,t before each heuse of parliament cla1l8e 59-this clause seeks to amend sub-sections (1) and (2) of section 19 of the regional rural banks act, 1976 so as to vest, the power of approving the appointment of auditors of a regional rural bank and fixation of their remuneration, in the reserve bank instead of in the central government it further seeks to amend sub-section (4) of section 19 so as to provide that every auditor shall make a report also to the central government clause 60-this clause seeks to amend section 20 of the regional rural banks act, 1976, so as to empower the central government to grant extension up to a maximum of sixty days for furnishing the annual report and the balance-sheet, etc, to each shareholder of a regional rural bank clduse 61-this clause seeks to amend sectfon 30 of the 'beifonll aural banks act, 1976, so as to provide that regulae:~~~"'~~ under - aforesaid act shall be placed before each house of parn;; ~ clause 9 of the bill seeks to amend the definition of "approved se<!urltles" in section 5 of the banking regulation act, 1949, as meaning, inter alia, such of the securities authorised by the central government under clause <f) of section 20 01 the indian trusts act, 1882 as may be preserlbedby rules made by the central government under the banking regulation act, 1949 this is a matter of detail necessary for the effective administration of the statutory provisions relating 'to maintenance by banks of the requisite percentage of assets at present, every bank is required to maintain the liquidity ratio of not less than 25 per cent of the total of its demand and time liabilities under section 24 (2a) (a) of the banking regulation act, 1949 clause 21 vf the bill and clause 35, as applicable to co-operative societies, seek to amend that section so as to empower the reserve bank to increase the said raltio from the present statutory minimum limit of 25 per cent up to a limit not exceeding 40 per cent as may be '?ecified by the reserve bank in the notification clause 30 of the bill seeks to~' '-a new section 45y in the banking regulation act, 1949, which emr ers the central government, after consultation with the reserve b( ,to make rules specifying ·the periods for which banks shall pf--" !~r':;lnd keep their books of accounts and other documents as well ~ ,erent instruments paid by them different periods may lyt,y4ilpt,p ,l~d for different types of records, depending upon the nature of each record, and keeping in view the needs and practical difficulties of the banks, and usefulness in connection with tax and other regulatory proceedings it is not possible to visualise at this stage as to what should be the various minimum periods for preservation of various records this clause further seeks to insert new sections 45za, 45zc and 45ze in the banking regulation act, 1949, in pursuance whereof, the depositors of banks, persons leaving articles i in safe custody with banks, ami hirers of safety lockers from bnnk, are given the rip,'ht of nominaf'ion in the manner prescribed under rules made by the central government under the said act the nomination so made can also be varied or cancelled in the prescribed manner clause 35 of the bill seeks to insert a new section 24a as applicable to co-operative societies for empowering the reserve bank to exempt by notification, any co-operative bank or class of co-operative banks from the applicability of the whole or any part of the provisions of section 18 or section 24 of the act, with reference to all or any of 'the offices of such co-operative bank or co-operative banks or with reference to the whole or any part of the assets and liabilities of such c(\-operative bank or cooperative banks, and for such period and subject to such conditions as may be specified in the notification this is a matter relating to implementation of policy, in suitable cases clause 39 of the bill seeks to amend section 43 of the state bank of india act, 1955 so as to provide for delegation of powers to 'the ofticers of the ~ alae ,by ge~ or ~ial or4erama(ie by tm cen~,j39ard of the bank 1" i r  ,,, the matters in respect of which an authority is eb\powered io ~ any autbm'ieation, notification or order or to mallie rulei, rejlaq, wi matters of procedure and administrative detail it is ngtpfa_able" provide for them in the relevant enactment the delegation d mew'" tive power is, therefore, of a normal character (18 01' 1891) - - - - - deflnl· tiona z in this act, unless there is something repugnant in the subject or context-- - - - - (4) "legal proceeding" means any proceeding or inquiry in which evidence is or may be given, and includes an arbitration; - - - •• (8) "certifted copy" means a copy of any entry in the books of a bank together with a certificate written at the 'fodt of such copy t~t it is a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and ordlinary course of business, and that such book is still in the custody of the bank, such certificate being dated and subscribed by the principal accountant or manager qf the bank with his name and oftlclal title  - - - - -  errracts from the reserve{~an1t of india act, 1934 (2 of 19m) - • - • •9 of 1932 m in this chapter, unless the ~xt otherwise requires,-de1lni - - - ft!· - tiona  - 't)i (bb) "deposit" shall includ "d shali be deemed always to have included, any money rece~by a non-banking institution by way of deposit • qir'roml at in any other form, but shall not include almn:11its raised, by way of share capital, or contributed as capital by partners ot a firm; - - - - - (d) "firm" means a firm as defined in the indian parlnerslkip act, 1932, of which the capital subscribed by its partners exceeds one lath of rupees; (e) cellon-banking institution" means a company, cort>oration, co-operative society or firm - - - •• national agricul· tural credit (stablll  aation) fund (8b (1) - - - - (2) the amount in the said fund shall be applied by the bank only to the making to state co-operative banks or regional rural banks of loans and advances repayable on the expiry of fixed periods not being less than fifteen months and not exceedin!! five year~ from the date of maldllg such loan or advanee and on such terms and condftlons as may be specified in this behalf by the bank: provideii that no such loans or advances shall be made-(a) except for the purpose of enabling the state co-operatlve banks to pay any dues in respect of bills of exchange and promissory notes put'cha~~ or rediscounted by the bank under clause (2) of section 17 or loans or l1dvances millie to them bv thp bank undm' c}ute (4) of section 17, and unless fn the opfnlon of the bank, the state cooperative banks ate unable to pay such dues in tfme owing to drought, famine or other dlltural calamitfes; and (b) unless such loans and advances are fully guaranteed as to the repayment of the principal and payment of interest by the state government: provided further that no such loans or advances shall be made-' (a) e~ept f()r the purpose of enabling the regional rural banks to pay any dues in respect of bills of exchange and promissory notes purchased or re-discounted by the bank or loans and advances made to them by the bank under section 17 and unless, in the opinion of the bank, the regional rural banks are unable to pay such dues in time owing to drought, famine or other natural calamities, and cognizance of offences ('b) unless such loans and advances are fully guaranteed 88 to repayment of the principal and payment of interest by the sponsor bank - -  - - 58e (1) no court shall take cognizance of any offence punishable under this act except upon a complaint in writing made by an officer of the bank, generally or specially ~uthorised in writing in this behalf by the bank, and no court other than that of a metropolitan magistrate or a judicial magistrate of the- firlt class or a court superior thereto shall try any such offence - - - - - interpretation extracts from the bankin"g regulation act, 1949 - - (10 of 1¥9) - - - 5 in this act, unless there is anything repugnant in the subjert or context,-(4) "approved securities" means securities in which a trustee may invest mone-y under clause (4), clause (b), clause (bb), clause (c) or clause (d) of section 20 ot the indian trusts act, 1882; 2 of 1882 - - - - - (1) "reserve bank" means the reserve bank of india; - - - - - '1 (1) no company other th:m a banking company shall use as part of its name any of the words "bank", "banker" or "banking" and ~o company shall carry on the businessl of banking in india unless it \lsef; as part of its name at least one of such words - - - - - use of words "bank", "banker", "banking" or "banking company" prohibition of trading • notwithstanding anything contained in section 6 or in any contract, no banking company shall directly or indirectly deal in the buying or selling or bartering of goods, except in connection \\jth the realisation of security given to or held by it, or" engage in any trade, or buy, sell or barter goods for others otherwise than in connerlion with bills of exchange received for collection or negotiation or with such of its business as is referred to in clause (i) of sub-section (1) of section 6: provided lhat this section shall mt apply to any such business as aforesaid which was in the course of being transacted on the (lommencement of this act,· so however, th~ the sa~d business shall be completed before the expiry o~ one year fro)1l such commencempnt explanotion-for the purposes of this section, "goods" means every kind of movable property, other than acconable claims, stocks, shares, money, bullion and specie, and all instruments referred to in clause (a) of sub section (1) of section 6   -    18 of 1988banjua, compaoy to be managed by wholetime chairman lob (1) nothwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company in existence on the commencement of section 3 of the banking laws (amendment) act, 1968, or which comes into existence thereafter shall have a chairman of its board of directors who shall be entrusted with the management of the whole of the affairs of the banking company: provided that the chairman shall exercise his powers subject to the superintendence, control and direction of the board of directors: provided further that nothing in this sub-section shall apply to a banking company in existence on the commencement of the said section for a period at three months from such commencement -     (5) a chairman of the board of directors of a banking company may, by writing under his hand addressed to the company resign his office but shall continue in office until his successor asswnes office      loc any director or chairman apf>oi~ted by the reserve bank under section loa or section lob, as the calie may be, shall not be required to hold qualification shares in the ba,'king company chairman or director appointed by the reserve bank,not to be required to hold quallftcation sharel 18 every banking company, not being a scheduled bank, shall main-cash tain in india, by way of cash reserve with itself or in current account rebel've  2f of 1881~ned with the reserve bank or the ~tate bank of india or' any other bank notified by the central government in this behalf or partly in cash with itselt and partiy in such account or accounts, a sum equivalent to at least three per cent of the total of its time and demand uabilities in india, and shall subm!'t to the reserve bank before the fifteenth day of every month a return showing the amount so held on friday of each week of the preceding month with particular~ of its time and demand liabilities in india on each such friday, w, if any such friday is a public hollday under the negotiable instruments act, 1881, at the close of business on the preceding working day expltmation-in this section and in seetion 24, "liabilities in india" shall not include-(0) the paid-up capital or the reserves or any credit balance in the profit and loss account of the banking company; (b) any advance taken from the reserve bank or from the state bank of india or from the industrial development bank of india or from the agricultural refinance corporation or from any bank notified by the central government under clause (c) of the ezplaaatioa to sub-section (1) of section 42 of, the reserve bank of lnella act, 1934 2 of 1934 restriction on nature of subsidiary --panles 1 of 1958 restrictions on loana and advances 19 (1) a banking company shall not form any bubsidiary oqiiipuly except a subsidiary company formed for one or more 01 the foljt>wmg purposes, namely, the undertaking and executing of trusts, the undertaking of the administration of estates aspecutor, trustee or oleerwise, the providing of £ale deposit vaults or, with the prev~ous permisaioa:in :writing qf the reserve bank the carrying on of the buaioesa of baalwjg exclusively outside india, or such other purposes as are incidental to the busin~s of banking - - - - - • (1) notwitbatanding anything to the ccmtrary contained'in section 77 of·tale companies act, 1956, no bankingcompafty shall,-- - - - - (b) enter into y commitment for granting ·my loan or advance to or on behalf of-- - - - - (iiijaay compd1 ,(got being a subsidiary of 'rtke 'banking company or a oompady ltefi8te1'ed unciersecti:cijr 25 of the companies act, 1'956, w • gwenuraent oompany) ,of which any of 1 of 1956 the directors of the banking company is a director, managing agent, manager, employee or guarantor or in which he holds substantial interest, or ·  '    2z (1)·                            -                                              -                                                                 -                                                                                   - llcensin" otbank-in  cold-p~ •     (3) before granting any licence under this section, the reserve bank may require to be satisfied by an inspection of the books of the company or otherwise that all or any of the following conditions are fulfuled, namely:-•                              -                                               -                                                               -                                                                                -            (b) that the a1fairs of the company are not being, or are not      likely to be conducted in a manner detrimental to the interests of its      present or future deposited;             -                              -                                              -                                                               -                                                                                -     a (1) after the expiry mi two years troll} ,the comdl8lleement of tt1is -1, every bant:idgc~ aball maintain in lddia in cash, gold :or i1jdeilculdbered appr,ewd securities, valuec1 at ,a plioe not ejlleeedibg the ,c!1imei1t ijilarut price, an amoant wlaich s1:aan not at the ,close of ftaiaess main tenance of a rer-centage of anets 'oil any day be leis thad 29 per cent of the mtal of its time ad demand jiebll:ities in lndda e:rplanati<m-for the purposes of this section, "1,ulencumbel1!d approved securities" of a banking company shall include its a~v~d seeurities lodged 'with another institution for an advance or any o~her credit arrangement to the extent to which such securities have not been aawn against or availed of - - - - •• ~a) (41) notwithstandmg anything eematned m sll"~n (1) or in sub-section (2), after the upky of twog yean kom tbe cornence-88 of 1982 ~ent of the banking companies (amendment) act, 1962,--(i) a scheduled bank, in ·additi~n to the average «ally balance which it is, or m~ be, req~ to maintain under se<::1ion 4zaf the reserve bank of indi,8 act 193',and (u) every other banking company, in addition to the cash reserve which it is required to maintain under s~ion 18, ~au maintain in india in cash, gold or unencumbered approved securities valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than 25 per cent of the total of its demand add time liabilities in india; (b) in computing the amount for the purposes of clause (a),-(i) the deposit required under sub-section (2) of section 11 to be made with the reserve bank by a banking company incorporated outside india, and (ii) any cash or balances maintained in india by a banking company other than a scheduled bank with itself ot' in current account with the reserve bank or the state bank of india or with any other bank which may be notified in this behalf by the central government, in excess of the aggregate of the cash or balance or both required to be maintained ·~nder gec1tion 18, and 2 of 1934 (iii) any balances maintain i by a'scheauled bank with the reserve bank in excess of t~';'alance required to be maintained by it under section 42 of the serve bank of india act, 1934, and any balances in current accou t maintained in india bya scheduled bank with the state ban~ '0 india or with any other ballk whi~ may be notified in this behalf by the central government, shall be deemed to be cash maintained in india                               -                                                                                   -                                                              26 of 1881     (3) for the purpose of, ensuring compliance with the provisions of this section every banking company shall, not later than fifteen days after the end of, the month to which it relates, furnish to the reserve bank in the prescribed form and manner a monthly return showing particulars of its assets maintained in accordance with this section, and its time and demand liabilities in india at the close of busines5 on each friday during the month, or if any friday is a public holiday under the negotiable instruments act, 1881, at the close of business on the p!'e-ceding working day             -                             -                                                                                                             -                                                                                ma (1)                -                                                                  -                                                 -                                                             - produetion of docu-ments of conftdential nature & ot 1970 21 of 19'16 (,!) for the purposes of this section, "banking company" includes the ijldustrial development bank of india, the reserve bank, the state bank of india a corresponding new bank constituted under section 3 of the ba,pking companies (acqutbltion and transfer of undertakings) ad, 1970, a regional rural bank established under section 3 of the regional rural banks act, 1976, and any subsidiary bank  - - -  358 (1) in the case of a banking company-(0) no amendment o~ any provision relating to the appointment or re-appointment or termination of appointment or remuneration of a ehairman, a managing director or any other director, wholetime or otherwise or of a manager 01' a chief execuilive officei' by whatever name called, whether that provision be contained til the company's memorandum or articles of association or in an agreement entered into by it, or in any resolution passed by the company in general meeti"lg or by its board of directors shall have effect unless approved by' the reserve bank; -  '  - - - amendmentl of provi-_ionlrelating to appointments ofmanaging director', etc, lobe lubject to prevlou approval of the reierve bank ezplanotion-for the purposes of this sub-section any provision conferring any benefit or providing any amenity or perquisite, in whatever fonn whether during ofl' after the termination of the term of office of the chairman or the manager or the chief executive oftlcer by whatever name called or the managing director, or any other director, whole-time or otherwise, shall be deemed to be ,a provision relating to his remuneration ir - ~e (2) nothing contained in secti, , 1s 268 and 269, the proviso to subsection (3) of section 309, sectionl ·310 and 311 the proviso to section 387, and section 388 (in so far as ~tion 388 makes the provisions of aections 310 and 311 apply in relati 'to the manager of a company) of the companies act 1956, shall appl~? any matter in respect of ~hich the approval of the reserve bank has 1;(, be obtained under sub-1 of 1958, section (1)  ~  "  - - - - - power of relerve bank lo appoint addlttorial direeton mab (1) if the reserve bank is of opinion that in the interest of banking policy or in the public interest or in the interest's of the banking company or its depositors it is necessary so to do, it may, from time to time by order in writing, appoint with effect from such da~ as may be specified in the order; one or more persons to hold office as additional directors of the banking company: provided that the number of additional directors so appointed shrill not at any time exceed five or one-third of the maximum strength fixed for the board by the articles, whichever is less  - punishments for cert81n ac· tivitiel in relation to banking companjea mad (1)' - - - - - (3) for the  purposes of this section, "banking company" includes th, reserve bank, the industrial development bank of india the state bank of· india, a corresponding new bank constituted under section 3 of the bapkmgcompanies (acquisition and transfer of undertakings) act, 1970 a regional rural bank established under section 3 of the regional rural banks act, 1976, and any subsidiary bank - - -  - powerte dispenm with meetin •• of creditors, etc c notwithstanding anything to the contrary contained in sections 460, 464 and 465 of the companies act, 1956, the high court may, in the proceedings for winding-up a banking company, dispense with any meetings of creditors or contributories or with the appointment o~ a committee of inspection if it considers that no object will be secured thereby sufiicient to justify the delay and expense  - - - - - 45 (1) - - - - - (5) the scheme aforesaid may contain provisions for all or any of the following matters, namely:- [10] m c(i) the continuance of the services of all the employees o~ the banking company (excepting such of them as not being workmen within the meaning of the industrial disputes act 1947 are specifically mentioned in the scheme) in the banking company itself on its reconstruction or, as the case may be, in the transferee bank at the same remuneration and on ~he same terms and conditions of service, which they were gettin!1or as the case may be, by which they were being governed, imm~ately before the da1e of ',he qrder power of relerve bank to apply to central government tor buapension ot business by bankin company and to prepare acheme ot recoutituor ama18a mation o~ moratorium: ' _,(errrj provided that th~;;i a--- shall contain a provision that-i '  (-i)  thibanking company shall payor grant not later than the expiry of the period of three years from the date on which the scheme is sanctioned by the central government, to the said employees the same remuneration and the same terms and conditions of service as are applicable to employees of corresponding rank or status of a comparable banking company to be determined for this purpose by the reserve bank (whose determination in this respect shall be final); (ij) the transferee bank shall payor grant not later than the expiry of the aforesaid period of three years, to the sajd emplo-·yees the same remuneration and the same terms and conditions of service as are applicable to the other employees of corresponding rank or status of the transferee bank subject to the qualifications and experience of the said employees being the same as or equivalent to those of such other employees of the transferee bank: provided fiurthet that if in any case under clause (ii) of the first proviso any doubt or difference arises as to whether the qualification and experience of any of the said employees are the same as or equivalent to the qualifications and experience of the other employees of corresponding rank or status of the transferee bank the doubt or <jifference shall be referred to the reserve bank whose decision thereon shall be final; (8) on and from the date 01 the coming into operation of the bcbt!rne or any provision thereof, tile zteheme or such provision shall be binding or! the banking company or, 'as the case may be, on the transferee baj'lk and any other banking company concerned in the amaigamatio!) add also on all the members, depositors and other creditors and employees of each of those companies and of the transferee bank, and on any other person having any right or liability in relation to any of those companies or the transferee bank (9) on and from such date as may be specified by the central government in this behalf, the properties and assets of the banking company shall, by virtue of and to the extent provided in the scheme, stand transferred to, and vest in, and the liabilities of the banking company shall, by virtue of and to the extent provided in the scheme, stand transferred to, and become the liabilities of, the transferee bank  [10] m c(15) in thi£ section, "banking }nstitution" means any banking company and includes the state bank "~f india or any other banking institution notified by the central gover~ment under section 51   [10] m c gonzalez-garcia, m c gonzalez-garcia, mpart ilia to override other laws lof 1956 , 5 of 1908 5 of 189b 4sa the provisions of this part and are = 338 made thecuruder shall have effect notwithstanding anything inconsistent therewith contained in the companies act, 1958 or the code of civil procedure, 1908 or the code of criminal procedure, 1898, or any other law for the time being in force or any instrument having effect by virtue of any such law; but the provisions of any such law or instrument in so far as the same are not varied by, or inconsistent with, the provisions of this part or rules made thecuruder shall apply to all proceedings under this partw (1) the high court may, if it thinks fit, take cognizance of and try in a summary way any offence alleged to have been committed by any person who has taken part in the promotion or formation of the banking company which is being wound up or by any director, manager or ;officer thereof: provided that the otjence is one punishable under this act or under the companies act, 1956 1 of 1956 special provisions for t punillhing offences in relation to banking companies being wound up (2) when trying any such offence as aforesaid, the high court may also try any other offen{!e not referred to in subo66!ction ,(1) whfch i an offence with which the accused may, under the code of criminal procedure, 1898, be charged at the same trial (9) in any case tried summarily under sub-section (1), the high court-(a) need not summon any witness, if it is satisfied that the evidence of such witness will not 'be material; (b) shall not be bound to adjourn a trial for any pwrpose \u\lesi such adjournment is, in the opinion of the high court necessary m the interests of justice; ' 1898 (c) shall, before passing any sentence, record judgij?ellt embodying the substance of the evidence and also the parucuirrs speci-fied in section 263 ;of the code of criminal procedure, 1890, 80 far u that section may be applicable; and nothing contained in sub-section (2) of section 262 of the code of criminal procedure, 1898, shall apply to any such trial f 1898 ,956 1898 (4) all offences in relation to winding up alleged to have been committed by any person specified in sub-sectton (1) which are punishable under this act or under the companies act, 1956, and which are not tried in a summary way under sub-section (1) shall, notwithstanding anything to the contrary contained in that act or the code of criminal procedure, 1898 or in any other law for the time being in force, be taken cognizance of and tried by a judge of the high court other than the judge for the time being dealing with the proceedings for the winding up of the banking company if 1898 i (5) notwithstanding anything to the contrary contained in the code of criminal procedure, 1898, the h~~h court may take cognizan~e of any offence under this section ~itho~the accused being committed to it for trial nnd all such trials ~ __ be without the aid of a jury " - -;" ~  - - - - - 45s (1) for the purpose of enabling the official liquidator or the special officer appointed under sub-section (3) of section 37 to ~e into his custody or under his control, all property, effects and actionable claims to which a banking company, is or appears to be entitled, the official liquidator 'or the special officer, as the case may be, may request in writing the chief presidency magiltrate or the distriqi mllilstnte, within whose jurisdiction any property, books of account ,orotl docu--me!lts of such battjting company may be situate or be found, to 1akepossession thereof, and the chief presidency magistrate or the district magistrat~, as the case may be, shall, on such request being made to him,-chief presldency magistrate and district magistrate to assist omcial uqul datorin takinl charltof property of'b8t1ting compan)' ~ wwntt''p; (a) take possession of such property, books ofaccouftu or other docurnents and ' (b) forward them to the official liquidator or the special ofbcer· (2) where any such property and effects are in the possession of the chief presidency magistrate or the district magistrate, as the' oase may be iluch magistrate shrill, on request in writing beitlg made to 'bim by the official liquidator or the speclahnbcer referred to in !ll})aedion (l), sell such property snd effects and forward the net proceeds of the 181ello the official liquidator or the special officer: provided that such sale shall, as far as practicable, be effected by public auction (3) for the purpose of securing compliance with the provisions of stib-section (1), the chief presidency magistrate or the district magistrate may take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be necessary penalties (4) no act of the chief presidency magistrate or the district magistrate done in pursuance of this section shall be called in question in any court or before any authority - - - - - \ 46 (1) - - i - - (4) if any other provision of tl¥s act is contravened or if any default is made in complying with any ~uirement of this act or of any order, rule or direction made or condition, imposed thereunder, any person guilty of such c:mtravention or default sllan be punishable with fine which may extend to two thousand rupees, add where a contravention or default is a continuing one, with a further fine which may extend to one hundred rupees for every day during which the contravention or default continues - - - - - , cogni zanceot offences 47 no court shall take cognizance of any ofi'enl'e punishable under sub-section (5) of section 36aa or section 46 except upon complaint in writing made by an officer of the reserve bank generally or specially authorised in writing in this behalf by the reserve bank, and no court inferior to that of a pre9idency magtstrate or a magistrate of the first class shall try any such offence - - - - - 51 without prejudice to the provisions of the state bank of india appu-cation of certalr proviaiodb to the state bankot india and otherdotlftedbadd act, 1955, or any other enactment, the provisions of sections 10, 13 to 15, 23 ot 19t1tl 17, 19 to 21, 23 to 28, 29 [excluding sub-section (3)], 31, 34, 35, 35a, 36 [excluding clause (d) of sub-section (1)], 46 to 48, 50, 52 and 53 shall also applyi so far as may be, to and in relation to the state bank of india or any corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, or a 5 of 1970 regional rural bank established under section 3 of the regional rural banks act, 1976, or any other banking institution notified by the central 21 ot 1976 government in this behalf as they apply to and in relation to banking companies: provided that-(4) nothing contained in clause (c) of sub-section (1) of section 10 shall apply to the chairman of, the state bank of india or to a general manager of any subsidiary bank in so far as the said clause precludes him from being a director of, or holding an office in, any institution approved by the reserve bank; (b) nothing contained in section 19 shall apply to the holding by the state bank of india of shares in the capital of any such subsidiary bank; and (c) nothing contained in section 46 or in section 47a shall apply to any officer of the central government or the reserve bank or the state bank of india, nominated or appointed as director of the state bank of india, or any f>uch subsidiary bank or any other banking institution notified by the central government under this section sz, (1) - - - - -  181'1| power    ||----------|| central  || qovern-  || ment     || to       || make     || rules   |(3) all rules made under this s~tion shall be subject to the condition of previous publication, and the date to be specified under clause (3) of section 23 of the general clauses act, 1897, shall not be less than six months from the date on which the draft of the proposed rules was published: provided that in respect of the first occasion on which rules are made under this section (including the rules made for the first time on matters specified in secti'ons loa and 47a), the provisions of this sub-section shall not apply 56 the pro~~_~'f - act, as in force for the time being, shall apply to, or,,,~'  dllon to, co-operative societies as they apply to, or in relati'?l'l to, banking companies subject to the following modifications, -1i'iame1y:-- - - act to apply to cooperative 80cieties 8ubject to modification  (f) for section 7, the following section shall be substituted, namely:-ule of word "bank", "banker" er "banking" <7 (1) no co-operative society other than a co-operative bank shall use as part of its name any of the words "bank", "banker" or "banking" and no co-operative society shall ciu'i'j' on the business of banking in india unless it uses as part of its name at least one of such words (2) nothing in this section shall apply to-(ei) a primary credit society, or (b) a co-operative society formed for the protection of the mutual interests of co-operat~ve banks or co-operative' land mortgage banks; (e) any co-operative society, not being a primary credit society, formed by the employees of a banking company or the state bank of india or any other banking institution notified by the central government under section 51 or the employees of a subsidiary of such banking company or the state bank of india or, as the case may be, such banking institution'; (g) sections 10, loa, lob, loc and ion shall be omitted; - - - - - • (1), fo;r retion 18, tlle ff9uowing section shall de substituted, ~ely:-cash reserve 2 of i  26 of '18 every co-operative bank, not being a state co-operative bank for the wne being included in the second schedule to the reserve bank, of india act, 1984, shall maintain in india, by way of cash reserve with itself or in current account opened with the reserve bank or the state bank of india or the state cooperative bank of the state concerned or with any other bank notified by the central government in this behalf or, in the case of a primary co-operative bank, with the central co-operative bank of the district concerned or partly in cash with itself and partly in such account or accounts, a sum equivalent to at least three per cent of the total of its time and demand iiabwties in india, and shan submit to the reserve bank before the 15th day of every month it return showing the amount so held on friday of each week of' the preceding month with particulars o~ its time and demand liabilities in india on each such friday, or, i'f any such friday is a public holiday under the negotiable instruments act, 1881, at the ::lose of business on the preceding working day i exp14nat'ion-in this section and section 24, "liabilities in india" shall not include,-(a) the paid-up ca~tql or the reserves or any credit balance in the profit and loss accm'~ the co-operative bank; '"'"  2 of 1934 (b) any advance taken from a state government, the' reserve bank, the state bank of india, the industrial development bank of india, the agricultural refinance corporation or any 'bank notified by the central government under clause (c) of the explanation to sub-section (1) of section 42 of the reserve bank of india act, 1934; " (~) in the case of a state or central co-operative bank, also any deposit of money with it representing the reserve fund or any part thereof required to be maintained with it by any other co-operative society within its area of operation, and in the case of a central co-operative bank, also an advance taken by it from the state co-ope~ative bank of the state concerned; (d) in the case of a primary co-operative bank, a110 any advance taken by it from the state co-operative bank o~ the state concerned or the central co-operative bank of the district concerned;'; - - - - - (m) "in section 20a, in sub-section (1), the words and figures ·'notwtthstanding anything to the contrary contained in section 293 of the companies act, 1956," shall be omitted; :1-• -  - -  {~) in section 22- (i) for sub-sections (1) and (2), the following 8ub-lmctiom ,hall be substituted, narne1y:-" (l) save as hereinafter provided, no co-operativa society shall carryon banking business in india unleu-'i " (a) it is a primary credit society, or '('/'  ~~ i' ,  (b) it is a co-operative bank and holds a licence issued in that behalf by the reserve bank, subject to such conditions, if any , as the reserve bank may deem fit to impose: " ~98s provided that nothing in this sub-section shall apply to a co-operative society, not being a primary credit society or a co-operative bank carrying on banking business at the commencement of the banking laws (application to co-operative societies) act, 1965, for a period of one year from such eommedcement i i ~ ), ,r 1986 ,\  (2) every co-operative society carrying on business as a co-operative bank at the commencement of the banking laws (application to co-operative societies) act, 1963, shall before the expiry of three months from such commencement, every primary cret;!it society which becomes a primary co-operative bank pfter such commencement shall before the expiry of t,biee months from the date on which it so beco~, a 'primary ,co-operative bank and every co-~vr-8ociety other than a primary cltedit society shall <  - ' before commencing banking business in india, apply tn writ-:  ,t<' lng to the reserve bank for a licence under this section: provided that nothing in clause (b) of sub-section (1) 'shall be deemed to prohibit-,at i"" (i) a co-operative society carrying on business a8 a co-operative bank at the commencement oil the banking laws (application to co-operative societies) act, 1965 or (ii) a ccroperative bank which has come into existence as a result of the division of any other cooperative society or the amalgamation of other cooperative societies <,arrying on business in either case as a co-operative bank or banks at such commencement or (iii) a primary credit society which becomes a primary co-operative hank after such commencement, from carrying on banking business until it is granted a licence in pursuance of this section or is, by a notice in writing, notified by the reserve bank that the licence cannot be granted to it"; (u) in sub-section (3), clause (c) shall be omitted; - - - - - (fi) in section 24-(i) in subsection (1), the words "after the expiry of two jurs from thecommeacl!ementof this act," shall be omitted; (ii) for au:1>sections (2) and (2a), the following sub-sections shall be substituted, name1y:-"  (2) in computing the amount for the purposes of sub-88clion (1),-2 ot (4) any balances maintained in india by a co-operative bank in current account with the reserve bank or the state bank of india or with any other bank which may be notifted in this behalf by the central government, including in the cue of a sta,te co-operative bank, the balance required under section 42 of the reserve bank of india act, '1934, to be so maintained, (b) any balances maintained by a central co-operative bank with the state co-operative bank of the state concerned, and (e) any balances maintained by a primary co-operative bank with the central co-operative bank of the district concerned or with the state co-operative bank of the state concerned, ihall be deemed to be cash maintained in india i (2a) (a) notwithstar~ding anything contained in sub-section (1) or in sub-section (2), \after the expiry of two years from the commencement of the ban);ing laws (application to co-operative societies) act, 1965, or of stich further' period not exceeding one 23 of 1" year as the reserve bank, having regartl to the interests of the eo-op,eratlve bank concerned, may think fit in a  :> particulat case to allow,-(i) a state co-operative bank, in addition to the average daily balance which it is, or may be, required to maintain under section 42 of the reserve bank of india act, 1934, and 2 of , (ii) every other co-operative bank, in addition to the cash reserve which it is requited to maintain under section 18, shall maintain in india in cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than twenty-five per cent of the total' of its demand and time liabilities in india; (b) in computing the amount for the purpose of clause (a),-(i) any cash or balances maintained in india by a eooperative bank, other than a scheduled state co-operative bank, with itself or in current account with the reeerve bank or the state bank of india or with any otller bank which may be notified in this behalf by the central government and also any balances maintained with the state cooperative bank of the state concerned and, in the case of a primary co-operative bank, also any balances maintained with the central co-operative bank of the district concerned or with the state ~rative bank of the state concerned in excess of the aggregate of the cash or balances or both required to be maintained under section 18; and (it) arty balance maintaided by a scheduled state cooper'ative bank with the reserve bank in excess of the balance required to be maintained by it under section 42 of the reserve bank of india act, 1934, and any balances in current account maintained in india by a scheduled state co-operative bank with the state bank of india or with any other bank which may be notified by the central government, ihall be deemed to be cash maintained in india erpzanation-for the purposes of this sub-section,-(q) approved securities, or a portion thereof, representing investment of agricultural credit stabilization fund of a co'-opjerative bank shall not be deemed to be unencwd-bered approved securities; (b) balance with the state co-operative bank of the state concerned or with the central co-operative bank of the district concerned, or a portion thereof, representing investment of agricultural credtt stabilization fund of a c0-operative bank shall not be deemed to be cash maintained in india; }i (c) in case a co-ope~ e bank has taken an advance against any balance main, , ed with the state bank of india or with any other bank t, ,ell may be notifted in this behalf by the centralgp~nment or with the state co-operative bank q~ 'state concerned or with the central co-opjera-,,~ of the district concerned, such balance to the ,,,~,,"i ,  extent to which it has been drawn against or availed of shall not be deemed to be cash maintained in india"; - - - - - (w) in section 35,-(i) in sub-section (1),-- - - - - (b) the following proviso shall be inserted at the end namely:-"provided that the reserve bank may, if it considers necessary or expedient 10 to do, cause an inspection to be made of a primary co-operative bank under this sub-section by one or more officers of a state co-opetative bank in the state in which such primary co-operative bank carries on business and may, if it considers it necessary and expedient 90 to do, suwly a copy of the said report to the state co-operative bank or the regtatrar of co-operative societies of the state in which the impected bank is registered"; - - - - - (iii) the expl4nation shall be omitted; - - - - - teaj (~) in section", in sub·_uoft (1) clauses (b) and (d) shall b omit           -                           -                                        -                                                        '"                                                                        - (zc) in section 46, in clallse (a) of the ea"pla~ion, at~r the words ''in· cl1,ldes a", the words "co-operative society," shall be inserted; - - - - - '"  extracts from the state bank of india act, 1955 (23 of 1955) - '" - •return • balltncesheet, 6:1c:, of state bank maybe discussed at general meetinj 4g (1) the state bank shall furnish to the centrjll government and to the reserve bank within three months from the 31st day of december, as on which its books are closed and balanced its balance-sheet, together with the profit and loss account and the auditors' repprt on the working of the state bank during the period covered by the accounts: -provided that the central government may, after consultation with the reserve bank, extend the said period of three months by such further period, not exceeding three months, as it may think fit - '" '" '" '" 42 (1) '" '" '" - (2) th-: shareholders presem at an annual general meeting shall be entitled to discuss the balance-sheet and the profit and 10es  account of the state bank made up to the previous m&tday of december, the repori of the central board on the working of the st~te-bank for the pterlod c0-vered by the accounts and the auditors' report on the balimce-sheet and accounts  - - - - 43 (1) -  '" '" (2) the officers, advisers and employees of the state bank shall exercise such powers and perform such duties as may ~ entrusted or delegated to them by the centtal board - - - '" - state bank mayappoint oftlcera and othfitr employ-~ e~cts from me state bank of india (subsd)iaily banks) act, 1_ (38 of 1959) , - - - '  - c (1) a supsidiary bank shall furnish to the state b~nk ~d the beserver~-  returns to be turniahe4 bya nblidiary ltank (a) within three months from the 31~t day of december u on which its books are closed and balanced, its balance-sheet, together with the profit and lolls account alld the audi~r's report, ~ a report by the board of directors on the working of the subsidiary badt during the period covereq by the accounts; and ' - - - - ,  - '" '" - ' (2) the shareholders pi'eserit lit an annualgeneral meeting shall be e~tj~ed to discuss the balance-sh~t and profit and loss account of the bank concerned, made up to the previous 31st day of decc!luber, the report of the board of directors oq the working of that bank for the period covered by the accounts and the uditors' report on the balance-sheet and accounts i - - 12  (1) '" (3) all rules made under this thirty days before each house of are made, and shall be subject t power of central govern-dlent to mate rulee ction shall be laid for not less than rliament as soon as may be after they uch modifications as parliament may ey are so laid or the se~iqll iminema~(t d~ring the session in whi~ diately following  extllacts from 1'he deposit invrancz coitl!oitatlon act, 1961 (47 o~i)'" '" '" io '" '" ~; 2 in this act, unless the contex~therwise requires,-delhlitiom 9 '" '" --'" '" , ,i!?1 w~ki~~ company" means any company which transacts the """,j:njioe&6 of banking in india and incll,ldes the state ban~, a sub- sidiary banll and any other banking institution notifiefl under section 51 of the banking regulation act, 1949, but does not include the tamil nadu industrial investment corporation limited; exp~ion-any company which is eng~ged in the manufacture  of gpods or c~rries on any trade and which accepts de~ita of money from the public mtitfely for the pu~ of flnlulcidg u bulin("ss as such manufacturer or trader shall not be deetned to tradl8ct the business of banking within the meaning of this clause; '" '" '" '" '"  (i) "~, 'red 'bank" mean s a banking company or a regional rural  ·~n eligible co-opel'btive bank for the time being registered derthe pil'ovisions of this act and includes for the purposes of sections 16, 17, 18 and 21,-(i) a banking company referred to in clause (a) or clause ( b) of section 13, or (ii) a co-operativle blank referred to in clauae (a) or cla~ <,,> of secttan 1i3c, the registrat~op whereof has ~q cance~led under aection 13, or as the case may ~, under section 1ic; '" '"    (k) "new banking company" means a benking company which begins to transact the business of banking after the commencement ot this act under a licence' ii'an~ to it under section 22 of the, banking regulation act, 1949, and includes any banking institution noufted: under iection 51 of the said act a£fr such commencement; - - - - - 6 (1) - - - - - board of cilrecton (2) a director nominated under clause (b) or clause (c) of subsection (1) shall hold office during ~e pleasure of the authority nominating him and a director nominatedjtnder cl~ (d) of sub-section (1) shall hold office for such period rft exceeding four years as may be specified by the central governmellf (3) a person shall not be capa\fe of being nominated as a director under clause (d) of sub-section (l)iif-(a) he has been removed 0 dismissed from the service of government or of a local authorit'! or of a corporation or company in which not less than ftfity~:)de ,r cent of the paid-up share capjtal is held by government; or (b) he is or at any time hs been adjudicated as insolvent or has suspended payment of his t'!bts or has compounded with his creditors; or (c) he is of unsound mind and stan\!i,,~:, declared by a competent court; or (d) he has been convicted of any offence which, in the oprl~n of the centl'1l1 government, involves moral turpitude  - -    11 the corporation shall re-giater every new banking company 88 an insured bank as loon u may ·beafter it is granted a1ieence under section 22 of the banking regulation act, 1949, or, as the use may be, after it is notified under section 51 of the said act   reliltntiod of new badkine companiea         '" 13 (1)  - '" -  canceuatlonof registration (2) the provisions 01 clauaes (ei) (b), (c), (cl) mid (h) o~ aub-iiectioij (1) shall apply to a corresponding new bank as they ifj1ply to a bapldng company         32 (1)    (2) the central government shall cause every author's report and report of the working of the corporation to be ledi for not less than thirty days before each house of parilament as soon as may be after each such report is received by the central government,        10f indestabliah_ milnt of correspondin, new banks -andbusi ness thereof, undertakings) act, 1970 (5 of 1970) (5) every corresponding new bank shall carryon and transact the business of'banking as deftned in clause (b) of section 5 of the banking regulation act, 1949, and may engage in one or more f()rms of business specified in sub-section (1) of seetion 6 of that act power of central govern-· mentto make schern!! (5) every scheme made by the cent government under this act shall be laid, as soon as may be after it s made, before each house of parliament while it is in session for a period of thirty days which may be comprised in one session or i two successive session, and if, before the expiry of the session in w 'ch it is so laid or the session immediately following, both houses agree in making any modiftcation in the scheme or both houses agree that the scheme should not be made, the scheme shall thereafter have efect only in such modified from or be of no effect, as the case may be; sf however, that any such modification or annulment shall be without pr+dice to the validity of anything previously done under that scherj\,r'·  (4) every auditor of a corresponding new bank shall make a report to the central govern~ent upon the" annual balance-sheet and accounts and in every such report shall statet:losure of ae· counts ,lod dis· posalor profits (4) 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 exhibit a true and fair view of the affairs ilf the corresponding new bank, and in case he had called for any explanation or infornation, whether it has been given and whether it is 'i wl!ether or not the transactions of the corresponding new have come to his notice, have been within the powers  " , \, whether or not the returns received from the offices and 'ancmts of the corresponding new 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 (e) any other matter which he considers should be bro~ght to the notice of the central government '" '" -   t (8) the central government shall cause every auditor's report and "report on the working and activ;ties of each corresponding new bank to ~ laid for not less than thirty days before each house of parliament as 1 800n as may be after each such report is received by itl'll! central government - - - - -  extracts from the regional rural banks act, 1976(21 of 1976) - - - - - ciolw'eof areounta it (1) every regional kural bank shall cauaeits books to be olgfed and balanced as on the 31st day of december of each year and mall ap-point with the approval of the central government auditors for the audit of its accounts 1 of 1958 (2) every auditor of a regional rural bank shall be a person who is qualified to act as an auditor of a company under section 226 of the companies act, 1956, and mall receive such remuneration ali th~ regional rural bank may fix with the approval of the central government - -   (4) every auditor of a ~l rural bank shall make a l'eport to that baak upon the annual balan~e-sheet and accounts and in every such report shall state,- 'l -  - \ - - (e) any other n1atter which ,he considers should be brought to the notice of the regional rural baya:k~ 20 every regional rural bank shall, within sixty' tiayi:":irom the date of closure of its accounting year, send to ea~h of its shareh~ffit1"s a 'report as to its working and activities during the accounting year iirt\~7"'" diately preceding together with a copy of its balance-sheet, profit and loss account and the auditor's report in relation to the accounts of the said accounting year annual report to be furnished to the shareholden:      t·  a bill                                                                                                                                  -i •••further to amend the bankers' books evidence act,                                                                                                                                                                           1891, he reserve            bank of india act, 1934, the banking regu~cttionact, 19~, the state            bank of india act, 19551,the state bank of india (subsi<arybanks)            act,                             1959, the deposit insurance and credit guaranteec:orporation            act,                             1961, the banking companies (acquisition and                                                                                                                                                                                           i'ransjer of             undertakings) act,                                                                             1970 and the regional rural bank act, 1976minister         finance)-           (shri hid patel,