 the banking laws (application to co-operative societies) bill, 1964  billfurther to amend the reserve bank of india act, 1934 and the banking companies act, 1949 for the purpose of reguzatingthe banking buriitebs of certaifl ~clltive societies and for matiets con- neeted therllwith be it enacted by parliament in the fifteenth year of the republic oilndia asfollows:-1 (1) this act may be called the banking laws (application to s co:operative ,8ocietia) act, 119(u short title and com-(2) it shall come into force 00 such date as the central govern- mencement may, by notillcatip~ in e ob;1cjal g~tte, ,appqint, and di1fe- ment rent dates roay be appointed for differ~t provi$ojls of tbis act  chapl'er ii 10 ~mi:n11' of the rl:sl:rve bank of ifidia act, 1934111" ~ in sectipn 2 9f ute r~erve ~})k 01 i~dia act 19,34 (hereinafter amendin this chapter referred to as the principal act) ,-ment of (i) clauses (a) and (aa) shall be re-iettered as ckluses (ai) section 2 adci (aii) respectillely, and hef«e clause (ai) as so re-lettered, is the following clause shall be inserted, namely:-'(a) "agricul:tural operations" includes animal husban-'-y\and allied activities jointly undertaken with agricultural operation;'; i 1784(b) ls-l (ii) for clause (bb) , the following clauses shall be substituted, namely:-, (bi) "central co-operative bank" means the principal co-operative society in a district in e state, the primary object of which is the financing of other co-operative societies 5 in that district: provided that in addition to such principal society in a district or where there is no such principal society in a district, the state government may declare anyone or more c~rative societies carrying on the business of financing 10 other <»-openltive societies in that district to be a central co-operative bank or banks within the meaning of this deftnf: tion; (bii) "co-<)pemtive bank" means a state co-operative bank, a central eo-operative bank and a primary co-opera- is tive bank: 20 (bui) "co-operative credit society" means a co-operative society, the primary object of which is to provide fin!!ncial accommodation to its members and includes a co-operative land mortgage bank: 2 of la12 (biv) "co-operative society" means a society registered, or deemed to be registered, under the co-operative societies act, 1912 or any other law relating to co-operative societies for the time being in force in any state; (bv) "crops" includes products of agricultural opera- 25 tions;'; , ~  p' - ii (iii) clauses (bbb) and (bbbb) shall be re-iettered as clauses (bvi) and (bvii) respectively, and after clause (bmi) as so relettered, the following clause shall be inserted, namely:-- (bviii) "director", in relation to a co-operative society, 30 includes a member of any committee or body for the time being vested with the management of the a1fairs of that society;'; , i (iv) after clause (e), the following clauses shall be inserted, namely:-! i 35 , (ci) ''marketing of crops" includes the processing of crops prior to marketing -by agricultural producel'8 or any organizatiqd of such producers; (cii) "primary aaricultural credit ociet,' mean - couperative socletyi i (1) the primary object or principal business of which is to provide financial accommodation to its members 5 for agricultural purposes or for purposes connected with agricultural activities (including the marketing of cr~s); and , ' ) , (2) the bye-laws of which do not permit admission of any other co-operative society as a member; 10 (ciii) "primary co-operath'e bank" means a co-operative lociety, other than a primary agricultural credit society,-(1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which 15 are not less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a n'lember; (cw) "primary credit sqciety" means a i(:o-operative lociety, other than a primary agricultural credit society,-20 (1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which are less than one lakh of rupees; and (3) the bye-laws of which do not permit admissiojl 2s of any other co-operative society as a member; explanation-if any dispute arises 8s to the primary object or principal business of any co-operative society referred to in this clause or clause (cii) or clause (ciii), a determination thereof by the bank shall be final'; 30 (v) clause (ee) shall be re-jettered as clause (ei); (vi) in clause (f), for the words beginning with "the principal society" and ending with "arre deemed to be so registered", the words "the principal co-operative society in a state, the primary object of which is the financing of other co-operative so-35 cieties in the stjate" shall be substituted  10 of 18"'3 in section 10 af the principal act, for clause (e) of sub-section amend-(1), the following cleuse shall be substituted, namely:-ment of "( ) d' t of banki ·thi th  aection 10 e is a lree or a ng company wi n e meanmg , of clause (e) of section 5 of the banking companies act, 1949, 40 or of a co-operative bank" amendt, ttt s'ecti&n 17 of t~ ~rin~l aet, in clause (2), explanation to mental  ed lection 17 iub-clause (b) shall be ojilltt  amendmental section 18 5 in section 18 of the principal act, in diiuse (3) of sub-section (1), after the words add figures "the b8nking companies act, 1949", the words "or to a state co-opetative bank: or, tin the recommenda- s tion of the state ~o-operative bank, to any olliei' eo-operative bank" shall be inserletl i in section 42 of the principal act,-amendmental lectlon42 (i) in sub~ection (1), for claue (c) of the e3lplanation, the following clause shall be substituted, namely: -10  '(c) ''liabilities'' shan not includ~0) the paid-up cap1ta1 or the reserves or any credit balan'ce in the proftt and idss account of the bank, or (ii) the amount of any loan taken from the dank or from the d~\teloprrtent bank or frdm th'e agricultural is reftt\an'eecorporation or frottl the state bank or from ahy other bank notified by the central govemment in this behalf, and , (iii) in the case of a state co-operative bank, also any loan taken by such bank from a state government 20 and any deposit of money with such bank representing the reserve fund or any part thereof required to be maiiitained with it by ahy co-opekltive society within its area of operation;'; (il~ in wb-sectit:m (6), in wb-elause (iii) of clause (a), for 25 the words "is '8comtp!lny", the 'words ''is 8 state co-operatlve bank or a compmiy" shall be substifut~  7 section 44 of the principal act shall be omittedomission of section 44 t' r----amendmental section 45h 8 in section 46h of the principal act, after the words and figures "section 51 of that act", the words "or a co-operative bank or a pri- 30 mary agricultural credit society or a primary credit society" shall be inserted 9 in section 451 of the principal act, in clause (e), after the woi'd "col}>oration,", the words "co-operative society" shall be inserted aiftariidm~nt_qf metjon 45 i,  chapter iii amendment 01" the banking companies act, 194910 of 1848 to in: the bal'rkin:g cotnpanies act, 1949 (hereinafter in this amend-ctia'j)tet retert'ed to as the principal aim), in the 101lg title and in ment of ~ the preamble, the word "companies" shall be omitted ~o:: p~~~ amble 10 of it48 11 (j) in section 1 of the ,principal act, in s\i~ction (1), for amendthe word ''co~ielll'', the word "regulatioa" bll be substituted ment of ection 1 (2) any reference to the banking companies act, 1949 in any law' for the time being ill force, 01' 11'l any ijuttument or other docu-10 iltet1t, shall be comtrued as a reference to the banking regulation ad, 1tr49 ' i 12 for section 3 of the ptineipal act, the lbllowing section shall subatitube substituted, namely: -tion of new teetionfor u3 n'6thmg in this act shall apply to-(a) a prirtlbry agricwtural credit society; 15 (b) a co-operative land mortgage bankj and (c) any other co-opet'ative society, except mannel' and to the extent specified in part v" ection i act to apply to co-operative in the 'societies in certain cases 18 in seretion 18 of the prih<rlpal aet, in elau!e (b) of the amend-20 e1ipjamtlcm, ftlt the wards "the refinance cor~ti'oft for industry ment of limited,", the words "the industri8l development bank of india section 1& or from the agrieult\1ra1 refu\m'lee cel!'po!'ation" shall be substituted 14 in the principal act, after part iv, the following part shall insertion ~ inserted, namely: -of new party applroa'i'ior 'm' the a:cr to 'c()ooop!!mtiye banks 56 the provisions of thil act, as in force for the time being, act to shall apply to, r in re1au~ to, ~retive iocieties as they apply to 1 to  el t' banlrt  <9 - b' t th co-operlapp  y ,or in r a lon to, aou'1§ compal\ies su jee to e tive foiiowmg modifications, namely: -aocieties 30 (a) throu~bout this act, umes~ the context otherwise subject to requires,-' modifications (i) referenees to a '1>anidng coil'npany" or "the company" or "such company" shall be c\iolstrued  references to a co-operative bank, (ii) references to "commencement 01 this act" shall be construed as references to commencement of the banking laws (application to co-operative s societies) act, 1964; i i (b) in section 2, the words and figures "the companies act, 1956, and" shall be omitted; (c) in section 5,- i (i) after clause (cc), the folllawing clause ahall be 10 inserted, namely: - i '(ccc) "central co-operative bank", "co-operative bank", "co-operative society", "director", "primary agricultural credit society", "primary c()-operative bank", "primary credit society" and i, "state co-operative bank" shall have the meanings respectively assigned to them in the reserve bank of india act, 1934'; i i (ii) clauses <if) and (h) shall be omitted; (d) for section 5a, the following section shall be substi- 2q tuted, namely:-act to override bye-iawl, etc "sa (1) the provisions of this part shall have effect, notwithstanding anything t9 the contrary contained in the bye-laws of a co-operative society, or in  any agreement executed ,by it, or in any resolution 25 passed by it in general meeting, or by its board of directors or other body entrusted with the management of its affairs, whether the same be registered, executed or passed, as the case may be, before or after ~ c0mmencement of the banking laws (application to co- 30 operative societies) act, 1964 (2) any provision contained in the bye-laws, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this part, become or be void, as the case may be"; 3s (e) in section 6, in sub-section (1) ,-(i) in clause (b), the words ",but excluding the business of a managing agent or secretary and treasurer of a company" shall be omitted; (ii) in clause (d), after the word "company,", the 40 worda "co-operative society," shall be inserted: (iili) in clause (m), after the word "company", the wordl "or co-operative society" shall be inserted; (f) for section 7, the followin( section shall be substituted, namely:-s 10 '7 (1) no co-operative society other than a co- ule ~t operative bank shall use as part of its name any of the ~:~k" words "bank", "banker" or "banking" and no co-opera- "banke~", tive society shall caity on the business of banking in or ''bank-india unless it uses as part of its name at least one of ing,l iuch words ' (2) nothing in this section shall apply to-(a) a primary credit society, or (b) a co-operative society fonned for the protection of the mutual interests of co-operative ban~ or co-operative land mortgage banks'; (g) section 10 shall be omitted; (h) for section 11, the following section shall be substituted, namely:-20 "11 (1) notwithstanding any law relating to co- requtire-t  ' f h t' bei i f men al 0 operative societies or t e ime ng n orce, no co- minimum operative bank shall commence or carry on the business paidup of banking in india unless the aggregate value of its capital and paid-up capital and reserves is not less than one lakh reserves of rupees: i i provided that apply to-- i nothing in this sub-6ection shall i 30 (a) eny such bank which is carrying on such business at the commencement of the banking laws (application to co-operative societies) act, 1964, for a period of three years from such commencement; or ' 35 (b) to a primary credit society which becomes a primary co-operative bank after such commencement, for a period of two years from' the date it so becomes e primary co-operative bank or for such further period not exceeding one year as the reserve bank, having regard to the interests of the depositors of the primary co-operative bank, may think fit in any particular case to allow (2) for the purposes of this lectiod, "value" means the real or exchangeable value and not the nominal value which may be shown in the books of the co-operative bank roncerned (3) if any dispute arises in computing the aggre- 5 gate value of the 'paid-1,1p capital and reserves of any such co-operative bank, a deterqdnation thereof by the reserve bank shall be flnal for the purposes of this section"; , (i) sections 12, 12a, 13 and 15 to 17 shall' be omitted; 10 (;)for ieclion 18, the following section shan be substituted, namely: - i i cub remrve '18 every co-opel"ative bank, pot being a state c0-operative bank ·for the tinut being included in the second ·sched\lle to the reserve bank of india act, 15 1934, shall maintain in india, by way of cash rese,'e 2 of 111' with itself orin current aeeount opened witli the retefvebank or the state bildk of india or the state c0-operative baitk of the state concerned or with any other bank notified by the central government in this behalf 20 01', in the ease of a primary oo-operative bank, with the eentml co-operative bank of the district concerned or pprtty in cash with itaelf and partly in such account or accounts, a rum equivalflnt to at least  three per cent of the total ()f its time and demjmd liabiliijes in india 25 and shall submit to the reserve bank before the 15th day of every month a return showing the amount liio held on friday of erch week of the precedinlt month with particulars of its time and demand l1ahi);tipq ;", india on 4il84h such friday, or, if i¥ly such fridav ;"  30 puhlie boltdsv ~ the n~otiable mstrumentc: am 28 oii81 ]881, at the close of business em the ~eding working tley  el!'pla'puitid'n-in this seeti()n and section 24, "liabilities in lndla" smll not include--35 (a) the paid-up capital qr the reserves or any credit balance in the profit ,and loss account of the co-operative bank; (b) any advance taken from a state govern- 40 ment, the 'reserve bank the state bank of india, the indull'trul dev~ent bank of 2 of 1934 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; 5 10 (c) in the case of a centrol co-operative bank, also any advance taken by it from the state cooperative bank of the state concerned and any deposit of money with it representing the reserve fund or any part thereof required to be maintained with it by any other co-operetive society within the area of its operation; (d) in the case of a primary co-operative bank, also any advance taken by it from the state cooperative bank of the state concerned or the centm! co-operative bank of the district concerned'; 15 (k) for section 19, the following section shall be substituted, namely:-20 "19 no co-operative bank shall hold shares in any beatrieother co-operative society except to such exttent and tion on subject to such conditions as the reserve bank may hol~g specify in that behalf: 8ha~ in , other eo_ provided that nothing contained in this section :::~:~:~ shall apply to- : (i) shares acquired through funds provided by the state government for that purpose; (ii) in the case of a central co-operative bank, the holding of shares in the state co-operative bank to which it is affiliated; 30 (iii) in the case of a primary co-operative bank, the holding of shares in the central co-operative bank to which it is affiliated or, where th~re is no such central co-operative bank, shares in the state co-operative bank of the state in whicib it is registered: ,  3s 40 provided further that where any shares are held by a co-operative bank in contmvention of this section at the commencement of the banking laws (application to co-opearative societies) act, 1964, the co-operative bank shall without delay report the matter to the reserve bank and shall, notwithstanding anything con-1784(b) ls-2 tained in this section, be entitled to hold the shares for such period and on such conditions as the reserve bank may specify"; (l) in section 20, in sub-section (1) ,-(i) the words and figures "notwithstanding any-s thing to the contrary contained in section 77 of the companies act, 1956," shall be omitted; 1011956 (ii) tor the proviso, the following proviso shall be substituted, namely:-"provided that nothing in clause (b) shall 10 apply to the grant of unsecured loans or advance-(a) made by a co-operative bank-(i) against bills for supplies or services made or rendered to government or bills is of exchange arising out of bona fide commercial or trade transactions, or (ii) in respect whereof trust-receipts are furnished ,to the eo-c!lper-rtive bank; (b) made by a primary co-operative bank 20 to any of its directors within such limits and on such terms and conditions as may be approved by the reserve bank in this behalf"; (m) in section 20a, in sub-section (1), the words and figures "notwithstanding anything to the contmry contained 25 in section 293 of the companies act, 1996," shall be omitted; 1 of 1958 (n) in section 21, in sub-section (2), in clauses (c) and (d), for the words "anyone company, firm, association of persons or individual", the· words "anyone party" shall be substituted; i 30 10) in section 22,- i i (i) for sub-sections (1) and (2), the following subsections shall be substituted, namejy:-"(1) save 8s hereinafter prmcted, no co-operative society shall carry on banking busble5s in india 35 unles&- i  (a) it is a primary cl"eciit eooiety, or (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: 10 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 societiel) act, 1964, for 8 period of one year from such commencement i (2) every co-operative society carrying on business as a co-operative bank at the commencement of the banking laws (application to cooperative societies) act, 1964, shall before the 20 ~piry of three months from such commencement, every primary credit society which becomes a primary co-operative bank after such commencement shall before the ejl;piry of three months from the date 011 which it so becomes a primary co-operative bank and every co-operative society other than a primary credit soeiety shall before commencing banking business in india, apply in writing to the reserve bank for a licence under this section: 30 provided that nothin, in clause (b) of subsection (1) shall be deemed to -prohibit a co-operative society carrying on business as a co-operative buk at the commencement of the banking laws (application to co-operauve societies) act, 1964, and a primary credit society' which becomes a primary co-operative bank after such commencement, from tarrying on banking business until it is granted a licence in pursuance of this section or is by notice in writing informed by the reserve bank that a licence cannot be granted to it"; 35 (ii) in sub-section (3), clause (c) shall be omitted; (p) in section 23, for _ sub-sect10n (1), the following sub~tion ihall be substituted, namely:-"(1) without obtaining the prior pennisaion of the reserve- bank, no co-operative bank ahall opft a new place of bwliness or change otherwise than within the same city, town or village, the location of an existing place of business: provided that nothing in this sulb-section shall apply to-5 (a) the opening for a period not exceeding one month of a temporary place of business within a city, town or village or the environs thereof within which the co-operative bank already has a place of business, for the purpose of a1fording banking 10 facilities to the public on the occasion of an exhibition, a conference or a mela or any other like occasion; (b) the opening of branches by a central cooperative bank within the area of its operation"; is (q) in section 24,-(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 20 sub-sections shall be substituted, namely:-"(2) in computing the amount for the purposes of sub-section (1) ,-(a) any balances maintained in india by a co-operative bank in current account with the 25 reserve bank or tre" state bank of india ()(l" with any other bank whicll may ibe notified in this behalf by the central government, including in the case of a state co-operative bank, the balance required under section 42 of the reserve 30 bank of india act, 1934, to be so maintained, 2 of 1934 (b) any balances maintained by a central co-operative bank 'with the state co-opera-tive bank of the state concerned, and (c) any balances mailntained by a prim8!i'y 3s co-operative 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 be cash maintained in india (2a) (a) notwithstanding anything contained 4° in iub-sectioo (1) or in wb-lectlon (~), after the 5 expiry of two years from the commencement of the banking laws (application to co-operative societies) act, 1964, or of such further period not exceeding one year as the reserve bank, having regard to the interests of the co-operative bank concerned1 may think fit in any particular case to allow,-2 of 1934 10  (i) a state co-operative 'bank, in addition to the average daily balance which it is, or may be, required to maintain wlder section 42 of the reserve bank of india act, '1934, and (vi) f!!vf!i'y other co-operative bank, in addition to the cash reserve which irt is requirei to maintain under section 18, is shall maintain in india in cash, gold or unencumbered approved securities, valued at a price not exceeding the current inu'ket price, an amount wh1ch 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; 20 (b) in computing the amount for the purposes of clause (a) ,-(i) any cash or balances maintained in india by a co-operative ibank, other than a state co-operatwe bank, with itself or in current account with the reserve bank or the state bank of india or the state co-operative bank of the state concerned or with any other bank which may be notified in this behalf by the central government and, in the case of a primary co-operative bank, also any balances maintained with the central c<h>perative bank of the district concerned, in exceas of the aggregate of the cash or balance or both required to be maintained under section 18, and 3s - 2 of 18m 40 (ii) any balance maintained by a state c0-operative bank with the reserve bank in excess of the balance required to be maintained by it under sectmn 42 of the reserve bank of india act, 1934, and any balances maintained by a state c(h)pel'ative bank with the state bank at india or with any other bank which may be notified in this behalf by the central govern ment, shall be deemed to be cash maintained in india"; (r) section 2~ shall be omitted; (s) for sectijons 29 and 30, the following section shall 5 be substituted, namely:-accounts and balance sheet "29 (1) at the expiration of each year ending with the 30th day of june, every co-operative bank, in respect of an ibusiness transacted by it, ahall prepare with reference to that year a balance-sheet and profit and 10 loss aoeount as on the last working day of the year in the forms set out in the third schedule or as near thereto as circumstances admit (2) the balance-sheet and profit and loss account sball be  eel by the mneger or the principal ofticer 15 of the bank 8dd where tber& are more than three directors of the bink, by at least three of thole directors, qr where there are not jju)re than three directors, by all the directors (3) the central government, after giving not less 20 than three months' notice of its intention so to do by a notification in the oftlclal gazette, may from time to time iby a like notification amend the forms set out in the third schedule"; (t) in ~iqd 31, foi' the words "within three months" 25 and "of three months" the worda "within six months" and ,  "01 six montlui' shall respectively !be substituted; (u) sections 32 to m shall be omitted; (v) in seet:km 3fa, sub-section (3) shall be omitted; (w) in section 35,-30 (i) in sul>8ection (1),-(a) for the words and figures "section 235 of the compmi_ act, 1956", the words "any law relat-1 of 1958 ing to co-operative societies £01' the time being in force" shall be substituted; 35 (b) the fouowing proviso shall be inserted at the end, namely:-'~plrcwided that the reserve bank may, if it considen neeessary or e'xpedient so to do, c8u81' an idapeetioil to be made of a primary eo- 40 operative benk uncler this ub-tection by on or more oftlcers of a state co-operative bank in the state in which such primary cooperative bank carries on business"; (ii) in sub-eectioo (4), clause (b) shall be omitted; (iii) the explanation shallibe omitted; (x) in section 35a, in sub-section (1), in clause (c), for the words "any ~ banking company", the words "the banking business of any co-operative bank" shan be substituted; (y) section 35b shall beonriltted; 10 (z) in section 36, in sub-section (1), clauses (b) ~ (d) shall ibe omitted; (za) in section 86a,-(i) for sub-section (1), the following sub-section shall be siilb9tituted, namely:-is 20 "(1) the provisions of section 11, section 18 and section 24 shall not apply to a co-operative bank which has been refused a licence under section 22 or whose licence hasheen cancelled under that section or which is or has been prohibited or precluded from accepting deposits by virtue of any order made  under this act or of any alteration made in its fbye  laws"; 2s 30 35 (ii) after s\llb-sectim (2), the following sub-section shall be inserted, namely:-"(3) subject to the provisions of sub-sections (1) 1ui (2), a co-opentive society carrying on business asa primary -eo-eperative bank at the com-jt1l'ji1ce'ment of the banking laws (application to co-opentive societies) act, 1964, or a co-operative socifrty w'hich becomes 8 primary co-operative bank after such commencement shell, notwithstanding that it does not at any time thereafter satisfy the requirements of the definition of primary co-operative bank in clause (c'cc) of section 5, continue to be a primary co-operative bank within the meaning of this act, and may, with the i\pproval of the reserve bank and sulbject to luch terms and conditions as the reserve bank may specify in that behalf, continue to carry on' the business of banking"; (zb) part ha, part iii, except suhections (1), (2) and (3) of section 45, and part rna except section 45w shall be omiltted; (zc) in section 46, in clause (a) of the explanation, after the words "includes a", the words "co-operative society," shall be inserted;  (zd) in section 47, the words, brackets, figures and letters "sub-section (5) of section 36aa or" shall be omitted; 5 (ze) section 49 shall be omitted; (zf) in section 49a, for the proviso, the following proshall be substituted, namely:-"provided that nothing contained in this section shall apply to-10 (a) a primary credit society, (b) any other co-operative society accepting such deposits at the commencement of the banking laws (application to co-operative societies) act, 1964, for a period of one year from the date of such 15 commencement; and (c) any savings bank: scheme run by the government"; (zg) sections 49b and 49c shall be omitted; (zh) in section 50, the figures and letters "10, 12a, 16,",20 "35b" and "43a" shall be omitted; (zi) section 51 shall be omitted; (zj) in section 52,-(i) in sub-section (2), the words, figures and letter "and the form in which the oftlciaj liquidator may file 25 lists of debtors to the court having jur1sd1ction under part iti or part ilia and the particulars which such lists may contain" shall \be omitted ; (ii) sub-section (4) shall be omitted; (zk) for section 55 and the first schedule, the following 30 section shall be substituted, namely:-«&55 (1) the bankers' books evidence act, 1891 shall apply in relation to a ro-operative bank as it applies act 18 of 1891 and act 46 of in relation to a bank as defl~ed in section 2 of that act 1949 to 16 of 1949 toc:ooperative banks (2) the banking companies (legal practitioners' 3s appl~ in  relabon clients' accounts) act, 1949 shall apply in relation to a co-operative bank as it appues in relation to a banldng company as defined in section 2 of that act"; (%i) for the third schedule and the fourth schedule the following schedule shall be substituted nametr--, cnm third schbdulb (s eec:tiod 29)  porma foul 01' baianca-iiiiit s property and assets capital and liabilitiesindia state co-opentift buk add central co-opcradft bank  i carrral:(i) authoriacd capital ·  shares of ri  each •••• s~of ri  each  j,11',:-ii"    - shares of ri   each ·  shares of rs  each a balanaii wl'ir 0tiqia bamq : | (,)    | current depoalb    ||---------|--------------------|| (ii)    |                    || savinp  |                    || badit   |                    || depoiiu |                    || (ii")  |                    || fixed   |                    || depouu  |                   |(iii) ~\jiltiqji~:~p ~i:",~!,"'"  capital and liabilities propbltty and assetsitt p ri p  ri p ri p 3· a jiuw it4d 0jjdil jtisiiitv" :(i,,) ouer inftlt~ts (to be peci&ed) (i) stat~ llacne     -s (h) \icuitutaj (ctoodit stabilieatioa f~)  (iii) a~diatf~    cft,) oiyidcdd equauution fund  () s~ ~ ~ reserve  (vi) bad and doubtful debt, reservc 10 (tlii) investmcnt dqneciation reserve  (viii) other funds and rcservca (to be specified) ----- 5· jxyjit~ our 0' tbb pjdnclpalisllbsldwly stan paatiautsmp fundin hares of :  3 p~n-~ubsjdl\ry statii pajttndsrlp 20 fund account :6 ady4nqist : (i) sbort-tcrmloans, cash credits, overdrafts add bius d~aptlcd for ~har capital of:  25 4 deposits and othbr accounts:of tbe advancd, amount due from in-(u{) curmu ctepolitl (a) govenuneiit and other approyed ~ (d) itidfti4ua1s··  _ - _-""":'f""' (6) cejwalco-operative badb (c:) otlter societlei -•  (6) other tadaib1e aec:aritfd@ oft~  ~ am01ult due ~  , from 5 (tv) mouey at call aad short ncltice   ~boao~(i) from the ilaerve 8idk of lddia/state/ central co-operatm bank : of the adftllces, amount oyenlue : ca) short-tenn loans, cash crediti and overdmfts      of which secu~ __ inst : considered bad and doubtful of ~ 10 (iii) loa&-term loans orftldt ~(~t: (ii) government and other ap ~~ ~1ttes  (6) ot~r tangible securitie9@ (a) government and other 15 (b) =v~i:=_ tid@  or the advances, amount due from individuals    or the advances, amount ovenlue (6) medium-term loans of which secured 20 (a)'=~~ient and dttrr approved securities  (b) qtfler tangible ~rit~ (c) loaij -tmn to&'ds  or which secured apinlt : 25 government and other approved !ccilrities other tansible seaarltle!@ (a i  7 inniiiut ucbiyablii :of wbich 0yeidae (9\ 30   property and assets '·'wital and ~1lit1b8, (10 plwa tbe stat~ ~ ~'bcu () shbft;'lerm iciuiaj cub creclha -i i bilt1i11c21yablii biino 8ilu roa clcjii»o tion ai t¥r etnttrfl 9· bianqi adjun'miinti (6) alecliam-cerm loas 10 i'libmisa uiis diii'dcim1on ii podntud ami) jiixi_ lid araticln ofhich ~ apiust : isapproved iecuritiei  ia 0mia assiits cto be 8pedfied)ee) loac-tend (qadi of which secured  1dst : i, non-banking asbbts aoqviiiiid in iaftip~ of cwiia (itatq mode of ftluatiod) - (a) goierqrdeill add other approved eec:arltia -  i" paoftr ajid 100ii(b) other ladiible kcuiideiti - - -  lw (iii' prom the state ~() short-term (qadi of wbjch tecured apidm: (a) govemmellt and other approved securities - (8) other  taagible accg ritics@  - s (b) medium-term loem ofwbiab iecul'cd apinst : (a) government and other approved securities - (b) other tangible iccu-10 riti:s@ (e) loag·tcrm ioidi of wbk:hbecured against (a) government and other approved securities  (8) other tangible mcu-rities@ , - 15 (iv) loans from other aourcea (1oiuce add lccurity to be spcdfled) • , bills , colliicrlom ajmo 8jui  -30 abu as pttedlflrg - , baancr ad]ustmbnts i {)naq)oji ihtbriist iibsdft , imradr payaijuj 10 0nia uaiiiutibs 2$  property and assets capital and li6billtibsra 'p r • p ri ri (im)s~ (iv> suadriea ,  , ii piom and loa| pro6t              |     ||--------------------|-------|| per                |       || last baiadce-hcet |       || eai                |       || ipjtopiiatioaa     | -     || 14m                |       || profit             |       || for                |       || the                |       || year               |       || brought            |       || from               |       || the                |       || pro8t              |       || iqd                |       || bill               |       || '/u:cduat          |       || 10                 |       || total              |       || total              |       | contingm rr liajmh1ss(i) ~ " , ui uibbmfutlei for ~1sautd (ii) {)tiias - : : ~s tmal  notbs ·"itlxed clepoaita "1rillindude reserve fund depoaits of societies, employees provident fund d~ta,ltafi' aec:udty deposita, ttamilla ckpoeita, cub cerd8cataj ~  ··tjmetth~ item "lnji"iduih" dep:nits from institutions other than co-operative badb add locleties may be included 20 ~" agel" adftdces"-shon-term loans will be for periods up to i s months, medium-term loul frcm 15 m()ntha to 5 yajs -lid 10di-term logs oft!' s yean@""otiiitt-~le tedutft," wullnclude boii~inp apiust gold and gold omaments,' repledae of gocdj, mortpae of lujd, etc g  l j~ofif-the colletpoddiaa fipiea (to the narest rupee, if 80 desired) for the year immediately preceedins the yeu to which die baiadce imet ieiilftf uouid be ibowd id separate ccijuinna  fo~b form 01' paont and loss account profil_lou ij«oiiift j(jr '''':l1iif' "'1ii8cii1ci~,d'--------- expbndittire incomes i interest on deposits, boriq~, el4=  ri p rs p i interest and <uscount ri p ri p :l salaries !iud auowaoces aad provident fund  2 commission, eacbadae and ~ 3 direqto~' aod local commiltee ~~ fees ao4l~  3· subsidies and doaatiqas  4 rent, taxe, ~urance, li,hriag, etc 10 s:: law chaffs 4 income from diqil-~ ~~ ui4 proot from sale of or dealing with sudt ~  s other receipts 6 postqe, telesrams and td~ooe  6 loss (if any) 7 auditcn'a fr=es - 8 depreciation on aud re, 10 property is 9· statieoely printing and ad~ileldlldl etc 10 loss f~ sale of or deaua, with doiilo"~ aneta u o~cspenditure u balaqc:e of proij 20 t(j1'al total, g-i butnleridlw-the cou~ fipuea (to the deareat rupee,jfio desired) fortbe jari;,~·~ the jar to which die profit and 1000ac:c:ount relates ahould be shown in separate colulluls't -    statement of objects of reasonsthe provisions of the banking companies act, 1949 u'e dot now applicable to or in relation to co-operative banks the deposits and working funda of co-operative banks are now 80 large that the extension of the more important provisions of the banking companies act, 1949 (and of certain other alued provisions of the reserve bank of india, act, 1934) to these banks will be in the public interest the bill seeks accordingly to extend to the state co-operative banks, the central co-operative banks and the more important primary nonagricultural co-operative banks certain provisions of the existing central laws which are relatable to 'iibanjdng" 2 the notes on clauses explain in detail the various provisions of the but new dzlm· , -the 3rd december, 1964: i i t t krishnamachari  president's recommendation under article 117 of the constitution of india[copy of letter no f 10/7/64-sb,' dated the 9th december, 1964 from shri t t krishnamachari, minister of finance to the secretary, lok sabha] : the president having been informed 01 the subject matter of the proposed "banking laws (application to co-operative societies) bill, 1964, recommends the introduction of the bill in the lok sabha under clause (1) of article 117 of the constitution clause 2 chapter ii of the bill provides for certain amendment to the reserve bank of india act, consequent on the application of the more important provisions 00 this act to co-operative societies clause 2 provides for the definition of the expressions used in the act in relation to co-operative banks or other oo-operative societies according to the scheme of control as it is envisaged in the reserve bank of india act and in the banking companies act, (a) all , the state or apex co-operative banks, (b) all central co-operative - banks and (c) such of the primary non-agricultural credit societies, including in particular urban co-operative banks, as have paid-up capital and reserves of a nominal value of rs 1 lakh or more, will be deemed to be co-operative banks the definition of the expression "co-operative bank" will exclude (a) all primary agricultural credit societies, whatever the nominal value of their paid-up capital may be, (b) primary non-agricultural credit societies with paid-up capital and reserves 00 a nommal value of less than rupees one lakh, even though they may be accepting deposits from non-members and (c) all other co-operative societies which do not obtain, or may hereafter cease to obtain, deposits from non-members if any doubt arises in regard to the classification of any particular aociety having regard to the nature of its business or operations, the question, it is proposed, should be decided finally by the ~rve bank , r clause 3 provides for a consequential change ~ the qualiftcationa now prescribed for the appointment of the directors of' the central board of the reserve bank it is proposed that directors of c0-operative banks should in future be disqualified, (as directors of banking companies are at present) for appointment to this board although the nomination of representatives of co-operative banks, which will be controlled by the reserve bank in future, will be inappropriate and will not, therefore, be possible, persons with exper:-ence and knowledge of co-operation, and not connected actively with the management of co-operative banks as directors, will still continue to !be el:igible for appointment to the central board of the reserve bank clau8e 4 provides for an amendment of a consequential nature clause 5 according to the scheme of the reserve bank of india actl only scheduled banks (and state or apex co-operative banks which are entitled to be included in the second schedule to the reserve bank of india act) are or will normally be entitled to loana and advances from the reserve bank commercial banks which ce not included in the second schedule, and central and primary cooperative banks, which are not entitled to ibe so included, do not or w111 not enjoy the facility of direct ac<?ess to the reserve bank in 1184 (b) ls-6 the event of an enlb1;'gency, however, the reserve bank will be able according to the provisions of section 13(1) of its statute to grant loans or advances to nonoo&eheduled banks direct or to relax the conditions as reg~ the·securityin respectof such ·ioans clause 5 seeks to extend the benefit of these provisions, in the event of emer· gencies, to central and primary c~operative·banks (which will be treated for this and for other pul'1pqlles as nonaeheduled banks)  clause6 s~ to modify the definition of "liabilities" in the cqe of apex co-operative ibanks for tbe purpose of calculating the reserve at 3 per cent which will have to be maintained with the reserve bank the amouat of the loansobtained:by c(h)perative bank,sfrom &he ~ndj,&strlal development :bank of iindia, the agric'ultural refinance cqrporatton and the -state ~vernment concerned and depolfita reo-_p~ting the ~es of other cooperative socieies will be excl~f4om the definition of liabilities   clcwse 7 seeks to omit section 44, as the returns from state or apex  co,operative banks, which are now provided for by this section can be obtained under the provisions of section 42 as extended to these 1:>anks olames8 and 9 provide for the modiflcation ,of the deftaition of (a) financial institutions and (b) non-banking iosututiona for the putposes of chapter iiib of the reserve bank of india act it is proposed that (a) all cooperative banks, (b) all agricul· tural credit &oeieties and (c) all primary non-agricultural credit s0-cieties which ~e not co-operative banks shoul<ibe excluded from the scope df the statutory provisions relating to the reserve bank's control over the loan investment or other allied policies of ,fillal\c'iel and non  banking institutions co-operative banks will be eftectiwly controlled in accordance with other provisions which are beingmede for this pw-pose in the reserve bank of india act an4, the 81m king companies act and it will not, therefore, be necessary to make lany separate provision in regard to them agricultural credit ~eties ·have been excluded generally from the scope of the va~ provisions of the present bill the working funds and turnover of ,pri mary nonagricultural credit societies which me not co-qpe'l'ative benks are relatively insignificant, with the result that the trouble or, expense involved in controlling their loans or advances or invest· ment policies may not be worthwhile cla\lsei 10 and 11 chapter hi provides f()r the amendments necessary to banking companies act clauses 10 and 11 seek w alter the description of this act and to make certai:n cqilseq\18fttial cbjmgas in the long title and the preamble the p'ct, it is :~, sh~ld be known in future as the banking reguluion art, 19&9 this will be appropriate, as its application will not be conftned any longer to companies incorporeted under the" com:paftiesaet'lnd' earrying on the business of banking clause 12 provides- thtit the provfsiuns of the banking companies act, 1949 will not be applieable to primary agricultur81 credit s0cieties and landmortgage ·banksand that they will be applicable to other co-operative banks only to the extent sp«!cifted czau,e 13 seeks' to modify, on the analogy of clause 6 of the bill, the definition of "ltabi:llties in india" in the case of co-operative banks for the purpose of caleulating the cash reserve at 3 per cent c141u1e '14 seeks to insert a new section in the banking- companies act, 11j4'9' providing for the necessary modifications to the various sect'loris of this act in thek application to or in relation to co--opefative' banks i - i parts iia, iii and ilia and such of the provisi0fts in the other parts of the act as are relatalble either directly oil' indirectiy to the incorporation, management and winding up of coo-operative- banks -are proposed to be omitted, as these parts or provisions are not in' pith and substance within the scope of any entry in the central- or concurrent list of subjects in the seventh schedule to the constitution the other, rnodiftcations of importance in the provisions of the banking companies act will be as indicatsd below the references are to the various clauses of section -56, as -proposed to be inserted in the act-,-(i) the operations or working of agricultural' credit societies and landmortgage banks, by whatever name- called;' will c!o!ltinue to be unaffected, as the provisions -of the banking companies"aet, 1~, -as renamed wih not be applicable to them; (ii) primary non-egj"icultural credit s6cleties with paid-up capital and reserves of a nominal' value· of leu than rs ] lakh, which accooding to the -definition will not -be -treated as co--operative banks" will be permitted as a apeeial ease to carry- an the business of banking ie acceptance of depesits from- ndd-membe~s and the grant of1081'lsand! aavances,' without- being' ~ quired to apply for-licences or' to comply with any of the' oth'er provisions of the act [clause (0)] ; (iii) primary non~agricultural credit societies with" paidl-up capital and reserves of rs 1 lakh 01"' more which by deftnition '!ire co-operati've banks, central co-operative banks and~st8te or apex co-operative banks,will be required to apply forucences-w1tbur-a period of three -months 'and will be permitted to carry on' the 'business of banking, if licences are granted to them, or in- the case of such banks which are already in' existence if they are not injormed that licences will not be granted for enabling them to continue to carryon the :business' [clause' (0»; (iv) primary non-agricultural credit societies, which !by det\nition are c~perative banks, central co-operative banks and state or apex co-operative banks will, once the provisions of the banking companies act have been applied to, or in relation to them continue to be banks within the meaning of the act, and if at any time any of these banks ceases to carry on banking !business it may begin to transact such business again, subied to the directions, if any, of the reserve bank [clause (za)]: (v) co-operative societies (other than agricultural credtt societies, or landmortgage banks, or primary non-agricultural credit societies, or central c~perative banks or state or apex cooperative banks) will be able to accept deposits from non-members and to grant simultaneously loans and advances in future only for a period of one year from the -commencement of the provisions of the present bill [clause (0)]; (vi) the investment of the funds of co-operative banks in otlier co-operative societies will, except in certain specifted circumstances, be subject to the approval of the reserve bank [sub-clause (k)]; (vii) central co-operative banks will be enabled, without obtainin~ the prior pennission of the re!':erve bank, to ooon nebranches within the area of their operations r clause (p)]: (viii) the reserve bank will be able to have the insnectton of a primary co-operative bank conducted, if necessary, throu~h the state or apex co-operative bank with which that bank is affiliated [clause (w)]; (ix) primary co-operative banks will be enabled to ~t, if necessarv, and on tenns and conditions which may be a-pproved by the reserve bank, unsecured loans to tl1e!r directors in clreumstances in which such loans may liave to be granted for any essential purpose t clause (1) ] : (x) the accounts of the co-operative banks will continue to -be closed at the end of the co-operative year, that is on the 30th june [clause (8)]; the wovisions of the bankers' books evidenee act,- 1891 and tlie banking companie9 (legal practitioners' clients' accounts) act, 1949 are proposed to be modified suitably so that the special procedure as to evidence or the protection in respect of cert_aln accounts may be extended to or be available in future in relation to co-ooeratfve lbanks rclause (zk)] _ the third schedule as proposed to be amended provines for the prescribed fonns in which the ba1ance-sheets and profit and l~s accounts of co-operative banks will have to !be maintained the p'onns may, if necessary, be modified in future in ~e_lh!'ht of further experience and in accordance with the precedure which 11 already prescribed in the act for this purpose  memorandum regarding delegated legislationsection 52 of the banking companies act, 1949 as propased to be extended to co-operative banks provides for the making of rujes for carrying out the purposes of the act in relation to these institutions and for prescribing the details to be included in the returns required to be submitted under the act and the manner in which the returns should be submitted  -~-- the delegation of legislative powers is of a normal characte:",  annexure ex1'r4cts from the rrsi:rve bank of india act, 1934'(2 or i~m) - - - - chapter i' - - - - deftni· uodi z in this act unless there is anything repugnant in the subject 01 eontext,-- - - - (bb) "co-<>perative credit soqiety!' means a society registered, or deemed to he registered, under the co-operative societies act, 1912, or any other law relating to co-ope'i"ative societies for 2 of 1912 the time being in force in any part of the territories to which this act extends, the primary object of which is to provide financial accommodation to its members and includes a cooperative land mortgage bank; - - - - (f> "state co-operative bank" means the princi'pal soc?iety in a state which is registered or deemed to be registered under the co-operative societies act, 1912, or any other law for the time being in foree in the state relating to co-operative socie- 2 of 1912 ties and the primary object of which is the financing of the other societies in the state which are or are deemed to be so regwtered: provided that in addition to such principal society in a state or where there is no such principal society in a state the state govenunent may declare anyone or more co-operative aocleties carrying on business in that state to be a state c0-operative bank or banks within the meaning of this definition  chap'l"dt ii  , incorporation, capital, managemi:nt and aus~    i  10- (1) no person may be a director or a memberof a local diaqualia-board who---catiors of  -   directors and (~) isa director of ~ bank, other tban the s~tebank or members any other bank notified by t~e omtral qovernil1~t, in this be- of local ~ or a bank which is a socletyre~tej;'ed ordeemed·to be re- boards gistered under the co-operative societies ac:t, 1912, or any other law for the time being in force in india relating to co-operative societies  - - - - 17 the bank shall be authori$td to carry on and transact the !~~;e:e several kinds of business hereinafter specifted, namely: -bank may transact (1) - - - - (2) (a) - - (b) the purchase, sale and· rediscount of bills· of exchange and promissory notes, drawn and payaple in india and bearing two or more good signatures, one of which shall be that of a bcbed1lledbank or a sta,te co-operative hank and' d,tawn or isst1ed for the purpose of financing seasonal_agneu1tural operations or the marketing of cil'ops, and maturing w1uiin ftfteen monthsfrom the date of such "purchase or re<liscount;~usive of days of grace; explanation-for the purposes of this sub-clause,-(i) the expression "a~cultural operjluons" ~u4eia romal husbandry and allied activities jointly undertaken with agiii~tjjal {o~~uou; (ii) "crops'" include products of ~grtcultuql oper~tions; (iii) the expression "marketing of crops" jncludes the processing of crops prior to marketing by agricultural producers or uly' ddganisation of web produceft; - - - - 18 (1) when, in the opinion of the bank, , ~~ hu power of arisen making it neceuar:y or expedie~t that action jjhouldbe taken direct ",nder tha lub-aection for the purpose of re,wating credit in the dlleount interests of incuan trade, commerce, industry and agriculture, the bank may, notwithstanding any limitation contained in sub-cllauses (a) and (b) of clause (2) or sub-clause (a) or (b) of clause (3) or clause (4)  of section 17,-(1) •  - - - (3) make loans or advances repayable on demancl or on the expiry of fixed periods not exceeding ninety day against the various forms of security specified in clause (4) of that section or, when the loan or advance is made to a banking company, as defined in the badking companies act, 1949 against such other ldalllmi 'fo~ of security as the bank may cormider sufflclent - - - - , chapter iii               cdrrral banking i'unctions          -                       -                                    -                                                 -  (1)            -                        -                                    -                                               - expzanczt;on-for the purposes of this section,-(a)            -                              -                                               -                                                                - cub reserve, ofac:heduled banks to be kept with the bank (c) "liabilities" shall not include the paid-up capital or the reserves or any credit balance in the profit and loss account oi the bank or the amount of any loan taken from the bank or from the refinance corporation for industry limited, or from the state bank or from any other bank notified by the central government in this behalf - - - - (6) the bank shall, save as hereinafter provided by notification in the gazette of india,-(a) direct the inclusion in the second schedule of any bank not  already so included which carries on the business of banking in india and which-(i) - - - - (iii) is a company as ~ in section 3 of the companies act, 1956, or an idbtitution notified 1>y the central 1" 1  government in tht behalf or a corporation or a company incorporated by or under any law in force in any place outside india; - - - 44 the bank may require any state co-operative bank to fur- power to nish the return refelted to in sub-section (2) of section 42, and if it require does so, the provisions of sub-seclions (4) and (5) of section 42 return's shall apply so far as may be to such co-operative bank as if it were from ct~-h opel's lye a sc eduled bank banks  - - - -  chapter liib provisions relating to non-banking institutions receiving deposits and financial institutions 10 1a1949458 the provisijons of this chapter shall not apply to the state chapter bank or a banking company as defined in section 5 of the banking iiib not  comparu' es act 1949 or 8 banking institution notified under section to ap~ly in , certain 51 of that act: cases provided that for the purposes of this chapter, the madras industrial investment corporation limited shall not be deemed to be a banking company 451 in this chapter, unless the context otherwise requires,-definitions  (a) - - - - (e) unon  banking institution" means a company, corporation, or firm - - - - - 17m(b) ~ [10th march, 1949] an act to consolidate and amend the law relating to banking coii1~ w~ it is· expedient to co~~ aaenci·the- law, r, lating to banking ~dies; it is h~by enacted as f911ows!- part· i preliminary1 <l) this act may be called the b~ compllnies act, 1~9 short title, extent and commencement - - - - - appliea ~ the provisions of this act shall be in addition to, and not, tion of save as hereinafter expressly provided, in derogation of· the comotherb laws ed pam  acti 1968, and any other law for the time, 'being in force 1 of 1958 not arr  act not to 3 nothing in this act shall apply to a co-operative babk regis-apply to tered under ·the co-operative societies act, 1912, or any other law 2 of 1912 co-operator the time being in force in any part of india relating to cotive banks operative societies  5 in this act, unless there is anything repugnant in the subject interpretation - - - - - 01' context,-- - - - - (ff) "deposit insurance corporation" means the deposit insurance corporation established under section 3 of the de- 47 of 1961 posit insurance corporation act, 1961; - - - - - (h) "managing director", in relation to a banking company, means a director who, by virtue of an agreement with the banking company or of a resolution passed by the banking company in general meeting or by its board of directors or, by virtue of its memorandum or articles of association, is entrusted with themana,geme~t of the whole, or substantially the whale ,of thecaffair~ of the coowmy, and incl~ a direc;tor occupying the ,position ·of a manegirlg dil'ector, qy whatever name called; - - - - - ria 'saw as otherwise expressly provided in this act,-act to ,(tl)the ,prqvisionsof this act ~ have effect notwith- ::~_ standing anythinit to ,the contrary contained in the memorap- dud;llittidum or articles of a banking company, or in any agreement execles~,tc eutetl by it,' or i in any resolution passeli' by' the hanking coinpany in general meeting or by it-; board 6f directors, whether the same' be jegistered,  executed or passed, as the c8semay be, before or alter th~ co~iw~ment of the ban~ing coiillp8nies (amendment) act, 1959; and ,3 of 1959, (0) ,~y pt"ovisioj) co,ntained in the memor~qum, ax:ticles, a~n:ter1t or ~~oiution aforesaid $h~li, to the ~xtent to which it  is repugnant to the provisions of this act, becomeor be voi~ as the case may oe  part n busine:ss oip banking companif4  6 (1) in addition to the business"oqt~:abf'1~lj;n, ~y poilu, mny engage in anyone or more of the foi!owing fonne ~ bulaineas, b~ ~_ ' tn-   ~-,  - - - ''jimei ma:j'~  ,~: (b) acting as agents for any government or ~oeal authority en,ate or any other pe~n or persons; the carrying on of j~,g~ncy busf,   ness df any description in~lu'ding the clearing and f~rwarding of goods, giving of receipts and ~harges and otbetwise acting as an attorney on behalf of customers, but excluding the business of a ~ agent or aecretary and' treasurer of a corn-peny; - - - - - (d) the effecting, insuring, guaranteeing, underwriting, participating in managing and can-ying out of any issue, public or private, of state, municipal or other loans or of shares, stock, debentures, or debenture stock of any company, corporation or association and the ·lending of money for the purpose of any such ibsue; - (m) acquiring and undertaking the whole or any part of the business of any person or company, when sucn business is of a nature enumerated or described in this 'sub-section; - - - - 7 (1) no company other than a banking company shall use as part of its name any of the words 'bank', 'banker' or ~banjdng' and no company shall carry on the business of banking in india unless it uses as part of its name at least one of such words useot words "bank", "banker", "banking" or "bankingcompany" (2) no finn, individual or group of individuals shall, for the purpose of carrying on any business, use as part of its or his name any of t1le words 'bank', 'banking' or 'banking company' (3) nothing in this section shall apply to-(a) a subsidiary of a banking company formed for one or more of the purposes mentioned in sub-section (1) of section 19, whose name indicates that it is a subsidiary of that banking company; (b) any association of banks formed for the protection of thejr mutual interests nd registered under section 25 of the companies act, 1956 - - - prohibll  18 (1) no banking company_t~of employ (a) shall employ or be managed by amana~1j' agent; ar men~ot  (b) shall employ or  eontinue the employment  of any person-(i) who is, or at any time has been, adjudicated insol vent, or has suspended payment or has compounded with his creditors, or who is, or has been, convicted by a criminal court of an offence involving moral turpitude; or ~~aging agent·  and res_ trictiolul on certain formsot employment (ii) whose remuneration or part of whose remnuera tioo takes the form of commission or of a share in the profits of the comp'my: provided that nothing c'oiltained in this sub-clause shall apply to the payment by a banking company of-(a) any bonus in pursuance of a settlement or award arrived at or made under i!my law relating to industrial disputes or in accordance with any scheme framed by such banking company or in areordrmce with the usual practice prevailing in banking bv$lness; (b) any commission to any broker (including guarantee broker), cashier-contractor, clearing and forwarding agent, auctioneer or any other person, employed by the banking company under a contract otherwise than as a regular member of the staff of the company; or (iii) whose remuneration is, in the opinion of the reserve bank, excessive; or (e) shall be managed by any person-(i) who is a director of ':my other compa~ not being-(a) a subsidiary of the banking company, or 1 of 1956 (b) a company registered under section 25 of the companies act, 1956: provided that the prohibition in this sub-clause shall not ~ply in respect of my such director for a temporary period not exceeding three months or such further period not exceeding nine months as the reserve bank may allow; or or (ii) who is engaged in any other business or vocation; , i (iii) ~hose term of ofti& as a person managing the  c:'ompany is for a period exceeding five years at eny one time:  1 'provided that the term of office of any such person may be ren~d or extended by further periods not exceeding five yean on each occasion subject to the condition that such renewal 01' extension shall not be sanctioned earlier than two years from the date on which it is to come into force: provided 'lisio that where the term of office of such person is for an inde"finite period, such term, unless it otherwise comes to an end earlier, shall come to an end immediately on the expiry of five years from the date of his appointment or on the expiry of three months from the date of commencement of section 8 of the bankin/t l::iws (miscellaneous provisions:) aci 1963, whi('hpve>r is 1i'1tm': provided furtber that notbinj;t in this clause shall a'ooly to'l director, other than tbe managing director of a banking wlllpany by resson only of his being such director !:rplanation,-for the ptll'j)ose of sub-clause (iii) of clause (b) - the expression "remuneration", in relation to a -person employed or continued in employment, shall include salary fees and perquisites but shall not include any allowanees or otherarnoonts paid to him for the purpose of rejmbuilsing him in respect of the expenses actually incurred by him in the performance of his duties (2) in forming its opinion under sub-clause (iii) of clause (b) of sub-section (1), the :reserve bank may have regard 'mnong other mattellb to~e following: -i (i) the financial ~rdition and history of the banking c'oj11-pany, its size tbnd area of operation, its resources, the volume of t-ts business, and the trend of its earning capacity; (ii) the number of its branches or offtces; -{iii) the· q-ualiftcations, eoncerned; : age and experience of the person ! (iv) the remuneration paid to other persons employed by the banking company or to any person ~ a similar positionin any otser banking company similarly situated; and (11) the interests of ita depositors - - -  - '('8) anv 'deefsfan ar -order -of the -"beserve -bank -mrde -under thi section shall be final for all purpoees =~~-tt (1) nmwtlthstandtn~ '8nythtn~ -ec>tltamed -m \lec!tfon 149 of the to mint-'companies aet, l1kt6 no' batikin~ ~ny in existenc!e oft the earn- 1 of 19dc1 mumpaid- m~eftt'df 'this ~et, 8han,atter-tbe exptry -of thf'e,-years from up capital mcl1 commencement or of such further period not ~n~ one anc:iyeal' as tbe'reserve bank bavinst re~ard to the intel'psts of the deooreserves, sitors of th" coo'npany, may think fit in any particu1ar case to allow, carry on business in india, and 11()other banking co~anv' shall, after the commencement of this acl, commence or carry on business in india, unless it complies with such of the requ;rements of this section as are "wlieable to it' ~ (2) in the case of a banking company inoorpotated outside india-: (a) the ii'tjtfeil!'!te 1rtlu~ (\ftts d8td-up 'c8ipitrl and rererves _ &ball not be less than fifteen lakhs '()f runees and if it has a place or places of business in the city of bombay or calcutta or both, twenty laims of rupees; and (bl the banking company shall' depostt and'" keep deposited with the reserve bank either- in cash or in the- form of unencumbered approved securities, or partly in oosh and partly in the- form of such· secttrlties-(i) an amount which shall not be less than the minimum required' by clause- (a); and (ii) as soon as may be after the expiration of each calendar year, wl amount calculated at twenty per cent of its pl'flfit fot that year- in respect of all business transacted through itsb1"8'llches in india, as discl06ed in the proftt and 1099 account prepared with reference to that year under section 29: provided that any such banking company may at any time replace-(i) any securities so deposited by cash or by any other unencumbered approved securities or partly by cash and ,partly by other such securities, so however, that the total amount deposited is not affected; (ii) any cash so deposited by unencumbered approved securities of an equal value (2a) notwithstanding anything contained in sub-section (2), the- central government may, on the recomme!lildatian of the reserve bank, and having regard to the adequacy of the' amounts glready deposited and kept deposited by a banking compalnyj,ulder lsub-section (2) , in relation -to its deposit liabilities in india, declare by order in writing that the provisions of sub-clause (ii) of clause (b) of sui>-section (2) shall not apply to such banking company for such period as may ibe specified in the orier (3) in the case of any banking company to which the provisions of sub-section (2) do not apply; the aggregate value of its paid-up capital and l'f"serves shall not be less than-(i) if it has places of business in more than one state, five lakhs of ,rupees, and if lqu-y such place or places of business is or are situated in the city of bombay or calcutta or both, ten lakhs of rupees; (ii) ,if it hes all'its places of business in one state none of w:hich is situated intthe city of bombay or calcutta, one lakh of rupees in respe<:t of its principal plaee of business, plus ten thousand rupees in respect of each of its other places of buaind situated in the same distrilct in which it has its principal place of business, plus twenty-five thousand rupees in respect of each place of business situated elsewhere in the state otherwise than in the same district: provided ,that no banking company to which this clause applies shall be required to have paid-up capital and reserves exceeding an aggregate value of five lakhs of rupees: provided further that no banking company to which this clause applies and which has only one place of business, shall be required to have paid-up capital and reserves exceeding an aggregate value of fifty thousand rupees: provided iuriiler that in the case of every banking company to which this clause applies and which commences banking business for the fll'it time after the commencement of the banking companies (amendment) act, 1962, the value of its paid-up 38 of 1982 capital shall not be less than five lakhs of rupees; (iii) if it has all its places of business in one state, one or more of which is or are situeted in the city 'of bombay or calcutta, five lakhs of rupees, plus twenty-five thousand rupees in respect of each place of business situated outside the city of bombay or calcutta, as the case may be: provided that 00 banking company to which this clause applies sooll be required to have paid-up capital and reserves exceeding an aggregate value of ten lakhs of rupees explanati<>n-for the purposes of this sub-secuon, a place of business situated in a state other than that in which the principal place of business of the banking company is situated shall, if it is not more than ,twenty-five miles distant from such principal place of businus, be doomed to be situated within the same state as such principal place of business (4) any amount deposited and kept deposited with the reserve bank under sub-section (2) by any banking company incorporated outside india shall, in the event of the company ceasing for any reason to carry on banking business in india, be an asset of the company on which the claims of all the creditors of the company in india shall be a first charge i (5) for the purposes of this section,-(a) "place of business" means any office, sub-ofbce, su·b-pay office and any place of business at which deposits are received, cheques cashed or moneys lent; (b) "value" means the real or exchangeable value, and not the nominal wlue which may be shown in the books of the banking company concerned (6) if any dispute arises in computing the aggregate value of the plid-up capital and reserves « any banking company, a determination thereof by the reserve bank shall be final fur the purposes of this section 12 (1) no banking company shall carryon business in india, regulation unless it satisfies the following conditions, namely:--of paid-up capital, (i) that the subscribed capital of the company is not less subscribthan one-half of the \1uthorised capital, and the paid-up capital ed capital is not less than one-half of the subscribed capital and that, if a!1d :uthothe capital is increased, it complies with the conditions prescrib- :~~ital ed in this clause within such period not exceeding two years as and voting the reserve bank may allow; rights of share-(ii) thet the capital of the company consists of ordinary holders shares only or of ordinary shares or equity shares and such preferential shares as may have been issued prior to the 1st day of july, 1944: provided that nothing contained in this sub-section shall apply to any banking company incorporated before the 15th tilly of january, 1937 (2) no person holding shares in a tbanking company shall, in respeet of any sbaces held by him, exercise voting rights on poll  in excess of qile per cent of the total voting rights of all the shareholders of the btlnking company (3) notwithstanding anything contained in any law for the time iaeing in force or in any contract or instrument no suit or other proceedingshau be maintained against any person registered as the holder of a share in a banking company on the ground that the title to the said share vests in a person other than the registered holder: provided that nothing contained in this sub-section shall bar a mut m~~p~mdmg-(a) by a transferee of the share on the ground that he bras obtained from the registered holder a transfer of the share in accordance with any law relating to such transfer; or (b) on behalf of a minor or a lumtic on the ground that the registered holder holds the share on behalf of the minor or lunatic : r 1784(b) ls-6 (4) every chairman, managing director or chief executive officer by whatever name called of a banking company shall furnish to the reserve &nk through that banking company returns containing full particulars of the extent and value of his holding of shares, whether directly or indirectly, in the banking company and of any change in the extent of such holding or any variation in the rights attaching thereto and such other information relating to those shares as the reserve bank may, by order, require and in such form and at such time as may be specified in the order election of new 12a (1) the reserve bank may, by order, require any banking company to call a general meeting of the shareholders of the comdirectors pany within such time, not less than two months from the date of the order, as may be specified in the order or within such further time as the reserve bank may allow in this behalf, to elect in accordance with the voting rights pennissible under this act fresh directors, and the banking company shall be bound to comply with the order (2) every director elected under sub-section (1) shall hold office until the date up to which his predecessor would have held office, if the election had not been held (3) any election duly held under this section shall not be called in question in any court resthc-13 notwithstanding anything to the contrary contained in tion on sections 76 and 79 of the companies act, 1956, no banking company 1 of 1958 commis  shall payout directly or indirectly by way of commission, brokerage, slon, d" •• fit f sh  ed brokerage, lscount or remuneration many orm n respec 0 any ares 1ssu discount, by it, any amount exceeding in the aggregate two and one-half per etc, on cent of the paid-up value of the said shares sale of shares restric tions as to paymentof dividend - - - - - 15 (1) no banking company shall pay any dividend on its shares until all its capitaused expenses (including preliminary expenses, organisation expenses, share-selling ccmunission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off (2) notwithstanding anything to the contrary contained in subsection (1) or in the companies act 1956 a banking company may 1 of 1956 pay dividends on its shares without writing of'f-(i) the depreciation, jf any, in the value of its investments in approved securities in any case where such depreciation has not actually been capitalised or otherwise accounted for as a loss; (ii) the depreciation, if any, in the value of its investments in shares, debentures or bonds (other than approved securities) in any case where adequate provision for such depreciation has been made to the satisfaction of the ,auditor of the banking company; (iii) the bad debts, if any, in any case where adequate provision for such debts has been made to the satisfaction of the auditor of the banking company 16 (1) no banking company incorporated in india shall have as prohibia director any person who is a directortion of (i) of any other banking company; or common directors (ii) of c~mpanies which among themselves are entitled to exercise voting' rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company (2) if immediately before the commencement of the banking 95 of 1956 companies (amendment) act, 1956, any person holding office as a director of a banking company is also a director of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company, he shall, within such period from such commencement as the reserve bank may specify in this behalf-(a) either resign his office as a director of the banking company; or (b) choose such number of companies as among themselves are ndt entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company as companies in which he wishes to continue to hold the office of a director and resign his office as a director in the other companies 17 (1) every banking company incorporated in india shan create reserve a reserve fund and shall, out of the balance of profit of each year 8s fund disclosed in the profit and loss account prepared under section 29 and before any dividend is declared, transfer to the reserve fund a sum equivalent to not less than twenty per cent of such profit (la) notwithstanding anything contained in sul>-section (1), the central government may, on the recommen<iation ot the reserve bank and having regard to the adequacy of the paid-up capital and reserves of a banking company in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not apply to the banking company for such period as may be specified in the order: provided that no such order shall be made unless, at the time it is made, the amount in the reserve fund under sub-section (1), together with the amount in the share premium account is not less than the paid-up capital of the banking company (2) where a banking company appropriates any sum' or sums from the reserve fund or the share premium account, it shall, within twenty-one days from the date of such appropriation, report the fact to the reserve bank, explaining the circumstances relating to such appropriation: provided that the reserve bank may, in any particular case, extend the said period of twenty-one days by such period as it thinks fit or condone any delay in the making of such report cash 18 every banking company, not being a scheduled bankl shall reserve maintain in india, by way of cash reserve with itself or :n t:'urrent account opened with the reserve bank or the state bank of india or any other bank notified by the central government in this ':>ehalf or partly in cash with itself and partly in such account at' ae<:ounts, a sum equivalent to at least three per cent of the total of its time and demand liabilities in india, and shall submit to the reserve b~mk before the fifteenth day of every month a return showing the !o'nlount ::0 held on friday of each week of the preceding month with particulars of its time and demand liabilities in india on each such frir:lay, or, if any such friday is a public holiday under the negotiablp instruments act, 1881, at the close of business on the preceding working 26 of 1881 ~~ -erplanation  :in this section and in section 24, "liabilities in india" shall not include-(a) 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:snk· of india or from the refinance corporation for in-' dwttry limited, or from 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 2 of 1934 restriction on nature of subsidiary companies 19 (1) a banking col1lpany shall not form any subsidiary company except a subsidiary company formed for one or more of the following purposes, namely, the undertaking and executing of trusts, the undertakidg of the administration of estates as executor, trustee or otherwise, th~ providing of safe depoait vaults or, with the previous permission in writing of the reserve bank, the oanying on of the business of banking exclusively outside india, 'or such other purposes as are incidental to the business of banking (2) save as provided in sub-6ection (1), no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent of the paid-up share capital of that company or thirty per cent oi its own paid-up share capital and reserves, whichever is less:  provided that any banking company which is on the date of the commencement of this act holding any shares in contravention of the provisions of this sub-section shall not be liable to any penalty therefor if it reports the matter without delay to the reserve bank and if it brings its holding of shares into conformity with the said provisions;vithin such period, not exceeding two years, as the reserve bank may think fit to allow (3) save as provided in sub-section (1) and notwithstanding anything contained in sub-section (2), a banking company shall not, after the expiry of one year from the date of the commencement of this act, hold shares, whether as pledgee, mortgagee, or absolute owner, in any company in the management of which any managing director or manager of the banking company is in any manner concerned or interested  1 of 1956 20 (1) notwithstanding anything to the contrary contained in ~estric section 77 of the companies act, 1956, no banking company shall-itlons onnd oans a (a) make any loans or advances on the security of its own advanees shares; or (b) grant unsecured loans or advances-( i) to any of lts directors; or (ii) to firms or private companies in which any of its directors is interested as partner or managing agent or guarantor or to individuals in cases where any of its directors is a guarantor; or (iii) to any company in which the chairman of the board of directors of the banking company (where tiie appointment of a chairman is for a fixed term) is interested as chairman or managing director of the company if such company has no managing agent or as the managing agent or director or partner of the mnaging agent of such company: provided that nothing in clause (b) shall apply to the grant of unsecured loans or advances made by the banking company-( i) against bills for supplies or ervices made or rendered to government or bills of exchange arising out of bona fide commercial or trade transactions, or (ii) in respect whereof trust-receipts are furnished to the banking company  - - - - 2oa (1) notwithstanding anything to the contrary contained in sectijon 293 of the companies act, 1956, a banking company shall not, 1 of 1958 except with the prior approval of the reserve bank, remit in whole or in part any debt due to it by-restrictions on power to remit debts (a) any of its directors, or ' (b) any firm or company in which any of its directors is interested as director, partner, managing agent or guarantor, or (c) any individual if any of its directors is his partner or guarantor zl (1) - - - power of reserve bank to control advances by bankingcompanies (2) without prejudice to the generality of the power vested in the reserve bank under sub-section (1), the reserve bank may give directions to banking companies, either generally or to any banking company or group of banking companies in particular, as to-- - - - (c) the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital, reserves and deposits of a banking company and other relevant considerations, may be made by that banking company to any one company, firm, association of persons or individual, licensing of banking companiell (d) the maximum amount up to which, having regard to the considerations referred to in clause (c), guarantees may be given by a banking company on behalf of anyone company, firm, association of persons or individual, and - - - - - - 22 (1) save as hereinafter provided, no company shall carry 011 banking business in india unless it holds a licence issued in that behalf by the reserve bank: and any such licence may be issupd subject to such conditions as the reserve bank may think fit to impose (2) every banking company in existence on the commencement of this act, before the expiry of six months from such commencement and every other company before commencing banking bullneu in india, shall apply in writing to the reserve bank for a licence under this section:  provided that in the case of a hanking company in existence on the commencement of this act, nothing in sub-section (1) shall be deemed to prohibit the company from carrying on banking business until it is granted a licence in pursuance of this section or is by notice in writing informed by the reserve bank that a licence cannot be granted to it: provided further that the reserve bank shall not give a notice as aforesaid to a banking company in existence on the commencement of this act before the expiry of the three years referred to in sub-section (1) of section ] 1 or of such further period as the reserve bank may under that sub-section think fit to allow (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 fulfilled, namely:-- - - - - - (c) in the case of a company incorporated outside india that the carrying on of banking business by such company in india will be in the public interest and that the government or law of the country in which it is incorporated does not discriminate in any way against banking companies registered in india and that the company complies with all the provisions of this act, applicable to banking companies incorporated outside india  - - - - 23 (1) without obtaining the prior permission of the r,eserve ~stric-bankhonson  1 f b' opemng (a) no banking company shall open a new pace 0  u!nness otnew in india or change otherwise than within the same city, town or and ' village, the location of an existing place of business situated in transfer ot india; and 'existing (b) nc? banking company incorporated in india shall open ~~~::: a new place of business outside india or change, otherwise than within the same city, town or village in any country or area outside india, the location of an existing place of business situated in that country or area: provided that nothing in this sub-section shall apply to the opening for a period not exceeding one month of a temporary place of business within a city town or village or the envilrons thereof ivithin which the banking company already has a place of business, for the purpose of affording banking facilities to the puhlic on the occasion of an exhibition, a conference or a mela or any other like occasion - - - - mainten-u (1) after the el(piry of two years from the commencement ance of a of this act, every banking company shall maintain in india in cash, percentage gold or unencumbered approved securities, valued at a price not exof assets ceeding the cu1tent market price, an amount which shall not at the close of business on any day be less than 20 per cent  of the total of its time and demand liabilities in india - - - - , (2) in computing the amount for the purposes of sub-section (u, the deposit required umder sub-section (2) of section 11 to be made with the reserve bank by a banking company incorporated outside india and any balances maintained in india by a brnking company 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, including in the case of ii scheduled bank the balance required under section 42 of the reserve bank of india act, 1934, to be so maintained, shall be deemec:f''io be 2 of 1934 cash mainiained in" india (2a) (a) notwithstanding anything contained in sub-&~tion (1) or in sub-section (2), after the expiry of two years from the commencement of the banking companies (amendment) act, 1962,-36 of 1962 (i) a scheduled bank, in addition to the average daily balal'lt:e which it is, or may be,require<i to maintain under section 42 of the reserve bank of india act, 1934, and 2 of 1934 (ii) every other banking company, in addition to the cash teserve which it is requited to maintain under section 18, shall maintain in india in cash, gold or unencumbered 'lpproved securities, valued at a price not exceeding the cuitedt market price, an amount whicli shall not at the close of business on any day be less than 25 ·per ~ent of the total of its demand and time 1iabilities in india; (b) in computing the amount for the purposes of clause (4),-(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 (i4,) any cash or balances maintained in india by a banking company other than a scheduled bank with itself or 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 aggre-: sate of the cash or balance or both required to be maintained under section 18, and 2 of 1934 (iii) any balances maintained by a scheduled 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 maintained by a sche8uled bank with the state bank of india or with any other bank which may be notified in this behalf by the cpntrjll government, shall be deemed to be cash maintained in india  - - - - - 25 ,<1> the assets in india of every banking company at the close assets in of bwnness on the last friday of every quarter or, if that friday is india 26 of 1881 8 public holiday under the negotiable instruments act, 1881, at the :lose of the business on the preceding working day, shall not he i~rs than seventy-five per cent 'of its demand and time liabilities in india (2) every banking company shall, within one month from the end of every qua:rter, submit to the reserve bank a return in the prescribed form and manner of the assets and liabilities referred to in sub-section (1) as at the close of business on the last friday of the previous quarter, or, if that friday is a public holiday under the nego-h of 1881 tiable instruments act, 1881, at the close of business on the preceding working day (3) for the purposes of this section,-(a) "assets in india" shall be deemed to include export bills drawn in, and import bills drawn on and payable in, india rnd expressed in such currencies as the reserve bank may from time to time approve in this behalf and also such securities as the reserve bank may approve in this behalf, notwithstanding that all or any of the said bills or securities are held outside india, (b) "liabilities in india" shall not include the paid-up capital or the reserves or any credit balance in the profit and lass ac- count of the banking company, (c) "quarter" means the period of three months ending oil the last day of march, june, september or december -  lit - - ,29 (1) at the expiration of each calendar year every banking accounts company incorporated in india, in respect of all busmc~s trans~ct~d aad by it and every banking company irtcorporated outside lndla, 10 balance_ , sheet  ~ 1784(b) ls-7 respect of all business transacted through its branches in india, shall prepare with reference to that year a balance-sheet and profit and loss account as on the last working day of the year in thp forms set out in the third schedule or as near thereto as circumstance5 admit: provided that in the case of a banking company incorporated outside india, the profit tnd loss account may be prepared as on a date not earlier than two months before the last working day of the year (2) the balanc~-sheet and profit and loss account shall be signed-(a) in the case of a banking company incorporated in india, by the manager or the principal officer of the company and where there are more than three directors of the company by at least three of those directors, or where there are not more than three directors, by all the directors, and  (b) in the case of a banking company incorporated outside india by the manager or agent of the principal office of the company in india (3) notwithstanding that the balance-sheet of a banking company is under sub-section (1) required to be prepared in a form other than the form set out in part i of schedule vi to the companies act, 1956, the requirements of that act relating to the balance-sheet 1 of 1956 and profit and loss account of a company shall, -in 80 far as they are not inconsistent with this act apply to the balance-shpet or profit and loss account, as the case may be, of a banking company  (4) the central government, after giving not less than three months' notice of its iutention so to do by a notification in the offici,al gazette, may from time to fime by a like notification a:nend the forms set out in the third schedule audit 30 (1) the balance-sheet and profit and loss account prepared in accordance with section 29 shall be audited-(a) in the case of a banking company incorporattd in india by a person duly qualified under any law for the time being in force to he an auditor of companies; (b) in the case of a banking company incorporated outside india, either by such ~n auditor as aforesaid, or by a person  ;: duly qualified to be an auditor under the law of the country ~ in which the company is incorporated 1 of 1956 (2) the auditor shall have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities and penalties imposed on, auditors of companies by section 227 of the companies act, 1956 (3) in addition to the matters which under the aforesaid act the auditor is required to state in his report, he shall, in the case of a banking com~ incorporated in india, state in his report,-(a) whether (1t not the information and explanations required by him have been found to be satisfactory; (b) whether or not the transactions of the company which have come to his notice have been within the powers of the company; (e) whether or not the returns received from branch offices of the company have been found adequate for the purposes of his audit; (d) whether the profit and loss account snows a true balance of profit or loss for the period covered by such account; (e) any other matter which he considers should be 'brought to the notice of the shareholders of the company 31 the accounts and balance-sheet referred to in section 29 to- submisgether with the auditor's report shall be published in the prescrib- 'sion of ed manner and three copies thereof shall be furnished as returns to retul'lll the reserve bank within three months from the end of the period to which they refer: provided that the reserve bank may in any case extend the said period of thre~ months foor the furnishing of such returns by a fl''' ther period not exceeding three months 32 (1) where a banking company in any year furnishes its ac- copies of counts and balance-sheet in accordance with the provisions of sec- balancetion 31, it shall at the same time send to the registrar three copies sheets and of such accounts and balance-sheet and of the auditor's report, and :::untst where such copies are so sent, it shall not be necessary to file with to re;8~ the registrar, in the case of a public company, copies 'of the accounts trar and balance-sheet and of the auditor's report, and, in the case of a private company, copies of the balance-sheet and of the auditor's report as required by sub-section (1) of section 220 of the com-1 of 1956 panies act, 1956; and the copies so sent shall be chargeable with the same fee and shall be dealt with in all respects as if they were filed in accordanc;~ with that ltec'tion (2) when in pursuance of sub-section (2) of section 27 the reserve bank requires any additional statement or information in connection with the balance-sheet and accounts furnished under section 31, the banking company shah, when· supplying such statement or infonnation, send a copy thereof to the registrar display of audited balancesheet by companies incorporated outside india 33 e'vel'y banking company incorporated outside india shall, not later than the first monday in august of any year in which it carries on business, display in a conspicuous place in its 'principal office and in every branch office in india a copy of its last audtted balancesheet and profit and loss account prepared under section 29, and shall keep the copy so displayed until replaced by a copy of the subsequent balance-sheet and profit and loss account so pr$red, and every such banking company shall display in like manner copies of its complete audited balance-sheet and profit and loss account relating to its banking business as soon as they are available, and shall keep' the copies so displayed until copies of such subsequent accounts are available account-34 nothing in this act shall apply to the preparation of accounts ~~~~:-of by a lbanking company and the audit and submission thereof in' resthis act peet of any accounting year which has expired prior to the  comnot retros- mencement of this act, and notwithstanding the other provisions 01 peclive this act, such accounts shall be prepared, audited and submitted in accordance with the law in foreeimmediately before the commencement of this act ma (1)                                        -                                 -                                          - produc-tion of documents ofecn1l_ dential nature     (3) for the purposes of this section, "banking company" includes the industrial development bank of india, the r""serve bank, the state bank of india and any subsidiary qank as defined in the state bank of india (subsidiary banks) act, 1959 38 of 1951 ~ (1) notwithstanding anything to the contrary contained in 111jpec-tion 1 of 1956 ~tlon 235 of the companies act, 1956, the reserve bank at any time may, and o~ being directed so to do by the central govetnment shall, ca~e an iilspection to be made by one or more of its officers 'of any bankmg c(jffipany and its books and accounts; and the reserve bank shall supply to the !banking company a copy at its report on such inspection        -                 -                          -                                     (4) the rescrtve bank shall, if iit has been directed by the central government to cause an inspection to be made, and may, in any other case, report to the central government on any inspection made under this section, and the central government, if it is oj opinion after considering the report that the affairs of the banking company are being conducted to the detriment of the interests of itts depositors, may, after giving such opportunity to ,the banking company to make a representation in connection with the report as, in the opinion of the central government seems reasonable, by order in writing-(4) prohibit the banking company from receiving fresh deposits; (b) direct the reserve bank to apply under section 38 for the winding up of the banking company: provided that the cent:ral government may defer, for such period as it may think fit, the passing of an orde>r under this subsection, or cancn or modify any such order, upon such tenns and conddtions as it may think fit to impose (5) -  -  explanation-for the purposes of this section, the expression "banking company" shall include--(i) in the case of a banking company incorporated outside india, all its branches in india; and (ii) in the case of a banking company incorporated in india-(4) all its subsidiaries formed for the purpose of carrying on the ibusiness of banking exclusively outside india; and (b) all its branches, whether situated in india or outside india 35a (1) where the rleserve bank is satisfied that-power of the (4) in the public interest; or reserve (b) to prevent the affairs of anybanking company being =k :recconducted in a manner detrimental to the interests of the tions depositors or in a manner prejudicial to the interests of the banking company; or (c) to secure the proper ttlanagement df any banking company generally; it is necessary to issue directions to banking companies generally oil' to any banking company inpartkular, it may, from time to time, issue such dm-ections as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions - - - - -  358 (1) in the case of a banking company-(a) no :tmendment of any provision :relating to the appoint: ment or re-appointment or remuneration of a mana~ng director or any other director, whole-time or otherwise or of a manager or a chief executive otbcer by whatever name called, whether that provision be contained in 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 meeting or by its board of directors shall have effect unless approved by the reserve bank; amendmentsof provisions relating to appoint-dlents of n1anaging directors, etc, to be sllbject to previous approval of the reserve bank (b) no appointment or re-appointment of a managing or whole-time director, ma~ager or chief executive officer by whatever name called, shall have effect unless such appointment ,, re-appointment is made with the previous approval of the reserve bank explanation-f,or the purposes of this sub-section, any provision conferring any benefit or nroviding any amenity or perquisite, in whatever form, whether during or after the termination of the term of office of the manager or the chief executive officer by whatever name called or the managing director, or any other director, wholetime or otherwise, shall be deemed to !be a provision relating to his remuneration  (2) nothing contained in sections 268 and 269, the proviso to sub-section (3) of section 309, sections 310 and 311, the proviso to section 387, and section 388 (in so far as section 388 makes the provisions of sections 310 and 311 apply in relation to the manager of a company) of the companies act, 1956, shall apply to any mrjtter in 1 of 1956 respect of which the approval of the reserve bank has to be obtainei under sub-section (1) (3) no act done by a person as a managing or whole-time director or a director not liable to retire hy rotation or a manager or a chief executive officer by whatever name called, shall be deemed to be inv:alid on the ground that it is subsequently discovered that his appointment had not taken effect by reason of anv of the nrovisionsof this act; but nothing in this sub-section shall be construed as rtmdering valid any act done by such person after his -appointment has been shown to the banking company not to have had effect 36 (1) the reserve bank may-further -    - - - powers and (b) on a request by the companies concerned and subject functions to the provisions of section 44a, assist as intermediary or other- of reserve  osals f h 1 ~ f h bankin bank wise, m prop or t e ama gamatlon 0 sue g companies; - -  - - -  (d) during the course, or after the completion, of any inspection of a banking company under section 35, by order in writing and on such terms and conditions as may be specified therein-i (i) require the banking company to call a meeting of its directors for the purpose of considering any matter relating to or arising out of the affairs of the banking company, or require an officer of the banking company to discuss any such matter with an offlcer of the reserve bank; (ii) depute one or more of its officers to watch the proceedings at any meeting of the board of directors of the banking company or of any committee or of any other body constituted by it; require the banking company to give an opportunity to the officers so deputed to be heard at such meetings and also require such officers to send a report of such proceedings to the reserve bank; (iii) require the board of directors of the banking company or any committee or any other body constituted by it to give in writing to any officer specified by the reserve bank in this behalf at his usual address all notices of, and other communiclltions relating to, any meeting of the board, committee or other body constituted by it; (iv) appoint one or more of its officers to observe the manner in which the affairs of the banking company or of its offices or branches are being conducted and make « report thereon; (v) require the banking company to make, within such time as may be specified in the order, such changes in the management as' the reserve bank may consider necessary in consequence of the state of afl:\tirs disclosed during or by the inspection i - - - - - - - certain :ma (1) the provisions of section 11, sub-section (1) of 'secprovisions tion 12, and section 17, 18, 24 and 25 shall not apply to a banking of the act companynot to apply to certain banking companies (a) which whether before or after the commencement of the banking companies (amendment) act, 1959, has been refused 33 at 1959 a licence under section 22, or prohibited from accepting fresh deposits by a compromise, arrapgemenjt or scheme sanctioned by a court or by any order made in any proceeding relating to such compromise, arrangement or scheme, or prohibited from '8cceptina deposits by virtue of any alteration made in ita memorandum; ar (b) whose lilcence has been cancelled under section 22, whether before or after the commencement af the banking com-panies (amendment) act, 1959 33 of 1959  - - - - -  part iia control over management36aa (1) where the reserve bank is satisfied that in the public interest or for preventing the affairs of a banking company being conducted in a manner detrimental to the interests of the depositors power of reserve bank to remove managerial and other persons from office ql' for securing the proper management of any banking company it is necessary 80 to do, the reserve bank may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, any director, chief executive officer (by whatever name called) or other officer or employee of the banking company (2) no order under sub-section (1) shall be made unless the director or chief executive officer or other officer or employee concerned has been given a reasonable opportunity of making a representation to the reserve bank against the proposed order: provided that if, in the opinion of the reserve bank, any delay would be detrimental to the interests of the banking company or its depositors, the reserve bank may, at the time of giving the opportunity aforesaid or at any time thereafter, by order direct that, pending the consideration of the representation aforesaid, if any, the director or, as the case may be, chief executive oftlcer or other officer or employee, shall not, with effect from the date of such order-(a) act as such director or chief executive officer qr othet officer or employee of the banking company;  (b) in any way, whether dixectly or indirectly, be concerned with, or take part in the management of, the banking company (3) (0) any person against whom an order of removal hu !been made under sub-section (1) may, within thirty days from the date of communication to him of the order, prefer an appeal to the central government (b) the decision of the central government on such appeal, and ilubject thereto, the orden- made by the reserve bank under subsection (1), shall be final and shall not be called idtoq~pn,lran1 court ,t  - f,'-,,' ;, (4) where any order is made in t~ of· ii director' or jehlef ex:ecutiveofticer or other ofticer ori :emplo11~[ ona banli:ini ~y ~~~r ~~·b-section (1:>, he sp~ ce~~e to be ~ director or, as the ease may be, chief executive officer or other officer or employee of the banking company and shall not, in any way, whether directly or indirectly; be concerned with, or take part in the management of, any banking company for such period not exceeding five yeen lui may be specified in the order  (5) if any person in respect of whom an order is made by the reserve bank under sub-section (1) or under the proviso to subsection (2) contravenes the provisions of this section, he shall !be punishable with fine which may extend to two hundred and fifty rupees for each day during which such contravention continues (6) where an order under sub-section (1) has been made the reserve bank may, by order in writing, appoint a suitable person in place of the director or chief executive officer or other officer or employee whq has been removed from his office under that subsection, with effect from such date as may be gpecifted in the order (7) any person appointed as director or chief executive oftlcer or other officer or employee under this section s'hall-(a) hold office during the pleasure of the reserve bank and subject thereto for a period not exceeding three ye8l's or such further -periods not exceeding three years at a time u the reserve bank may specify; (b) not incur any obt1gation 'or liability by reason only of his being a director or chief executive officer or other oftlcer or employee or for anything done or omitted to be done in good faith in the execution of the duties of his office or in relation thereto -1784(b) ~ (8) notwithstanding lulything contained in any law or in ad1 contract, memorandum or arttcles of 8si!ociation on the removal of a person from office under this section, that person shall not be atttled to claim any compensation for the 1088 or termlnatioo of ~ i i hab (i) if the reserve bank is of opinion that in the interests of the banking company or its depositors it is necessary 10 to clo, it may, from time to time by order in writing, appoint, with efteot from ~h date as may be specified in the order, one or more pel'lom to hold oftlce as additional directors of the banking company: power of reserve bank to appoint additional director, provided that the number of additional directors so appointed shalt not at any time exeeed flve or one-third of the maxtmum rtreqth bed for the board by the articles, whichever is leas (2) any person appointed as additional director in pursuance of this sectlon- i , (a) shall hold office during the pleasure of thereeerve bank aad subject thereto for a period not exceeding three ynrs or such further' periods not exceeding three years at a time as the reserve bank may specify; i (b) shall not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be c:ble in good faith in the execution of the duties of his oftlce or m ·relation thereto; and (c) shall not be required to hold qualifica,tion-shares in  the banking company ' , (8) for tb~ purpose of reckoning any proportion of the total dumber of directors of the lnmldng company, any additional dln!ctor appointed under this section shall not be taken into 'aceount partlla to override other 1  'iiac any appointment or removal of a director, chief executive officer or other ofbcer or employee in pursuance 01 section 36aa or section 36ab shall have effect notwithstanding anything to the contrary contained in the companies act, 1956, or any other 1 of 1958 law for the time being in force or in any contract or any ether instrument i  part iii suspension or business and wdtding up of banking companies318 in this part and in part ilia, "high court", in relation to a banking company, means the high court exercising jurl8djctlod in hilb court defined ·tim place where tae reptered obice of the hankini com pan) ii situated or, in the case of a banking company incorporated outside india, where its principal place ot business in india is situated 31 (1) the high (,;ourt may on the apphcauon of a banking suspen company whch js temporarily unable to meet its obligations make lion of an order (a copy ot which it shall celjse to be forwarded to trhe businesl reserve bank) staymg the commeil(:ement or contmuance of all actioda and proceedinp a~t the company for a fixed period of time on such terms and codditions as it sbajl think 1it and proper, and may from time to time extend the period 80 however that the total period of moratoriwn shall not exceed six months (2)- no such application shall be maintainable unless it js accompanied by' a report of the reserve bank indicating that in the opinion of the reserve bank the banking company will be able to pay its debts if the application is aranted: provided that the high court may, for sufficient reuons, ,rant rel1ef under this section even if the application is not accompanied by such report, and were such relief is il'anted, the hijb court shall call tol' " report from the reserve bank on the affairs of tlhe banking company, on receipt of which it may either rescind any order already passed or pass such further orders thereon as may ije just and proper ld the circumstances (3) when an application is made under sub-section (1), the high ~ourt mey appoint a special officer who shall forthwith take into hia custody or under his control all the assets, books, docwnents, effecu and actionable claims ·to which the banking companyis or pppea1"s to be entitled and shall also exercise such other powers as the hjah court may deem fit to confer on him, having regard to the interests of the depositors of the banking company (4) where the reserve bank is satisfied that the affairs of a banking company in respect of which an order under sub-iection (1) has been made, are being conducted in a manner detrimental to the interests of the depositors, it may make en application to the high court for the winding up of the company, and where any such application is made, the high court shall not make any order extending the period for which the commencement or continuance of all actions and proceedings against the company were stayed under that sub-section i i 1 of 18~fj - (1) notwithstanding anything contained in section 391, lee- windina tion 392 section 433 and section 583 of the companies act, 1968, but up by without'prejudice to its powers under sub-section (1) of section 37 ot ~ilurtb o  th1a act, the high court ahall order the winding up of banbdc '                                                                                                                                                                                                                                       j                                                                                                                                                                                                                                               " company-                                                                                                                                                                                                                                                                                 i                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        '                                                                                                                                                                                                                                                                                                                         '                                                                                                                                                                                                                                                                                                                                    _                                                                                                                                                                                                                                                                                                                                                 ii,\ • , (a) if the banldng company if unable to pay its debts; or          (b) if an application for its ~c:ling up has been made by~~                                                                               j     reserve bank under section 37 or this section                                                                                                                                               ~                                                                          n~i""    (2) tqe,beserve bank shall make _application under thia'1iec> tiodjortha widdidgup of a banking comp&uy ifit is direeted so to do byi8aol"dciowmiar clause (b) of sutmlection'(4)-o!'1iection 35                                                      "i                                                          ~                                                                              '              f •• ,1,\-1                        ••                             -                              ",     (3) the reset:ve bank may make an application under this sec-iiqn w ~               windiag~up_  a·making·~ompany-·                                                                    -                                                                          ,~  ,  ~  -              ,  -  , ~                                  (~) if the ~~kjng co~p~y-:-                                     i • '                                  ~                       -     (i) has failed to comply with the requirements specified in aject100 11; or       (ii) has by reason of the provisions of section 22lbecome disentitled to caity on ,bankiog b~iness in india; or      (iii) has been prohibited from receiving fresh deposits by an order under clause (a) of sub-section (4) of sectidu ;m) or under clause (b) of sub-section (3,4) of section 42 of the reserve bank o! india act, 1934; or 2 of 114-     (iv) having failed to comply with any requirement of this act other than the requirements laid down in section h, has continued such failure, or, having contravened any proyi~ &ion of this act has continued such contraventioo beyond such period or periods as may be specified in that ,behalf by the reserve bank from time to time, after notice in writing of such failure or contravention has been conveyed to the banldng company; or (9) if in the opinion of the reserve bank-     (i) a compromise or arrangement sanctioned by a court in respect of the banking company cannot be worked sati&-factorily with or without modifications; or       (ii) the returns, statements or infonnation furnished to it under or in pursuance of the provisions of this act disclose that the banking company is unable to pay its debts; or ,l (iii) the continuance of the banking company is prejudicial to the interests of its depositors lof19s8 (4) without prejudice to the provisions contained in section 434 of the companies act, 1956, a banking company shall be deemed to be unable to pay its debts if it has refused to meet any lawful demand made at any of its offices or branches within two working days, if such demand is made at a place where there is an office, branch or agency of the reserve bank, or within five working days, if such demand is made elsewhere and if the reserve bank: certifies in writing that the banking company is unable to pay its debts (5) a copy of every-application made by the reserve bank unckr sub-6ect~~ (1) shall be sent by the reserve bank to t~ re~aj:  38a '(1) there shall be attached to every high court a court court liquidator to be appointed by the central government for the pur- liquid  pose of conducting all proceedings for the winding up of banking tor companies and performing such other duties in reference thereto as the high court may impose - - - - (4) where having regard to the number of banking companies wound up and other circumstances of the case, the central government is of opinion that it is not necessary or expedient to attach for the time being a cou,rt liquidator to a high court, it may, from time to time, by notification in the official gazette, direct that this section shall not have effect in relation to that high court 1 of 1958 39 notwithstanding anything contained in section 38a of this act reeerve or in section 448 or section 449 of the companies act, 1956, where in bank to any proeeeding for the winding up by the high court of a banking ~ :c~ company, an application is made by the reserve bank in this behalf, lq a or the reserve bank, the state bank of india or any other bank notjdled by the centnl government in thls behalf or any individual, as stated in such application shall be appointed as the official liquidator of the bankini company in such proceeding and the liqwdator, if any, functioning in such proceeding shall vacate office upon such appointment lof 1951 39a (1) all the provisions of the companies act, 1956, relating appllcato a liquidator, iill so far as they are not inconsistent with this act, tion of compashall apply to or in relation to a liquidator appointed under section nies act 38a or section 39 to liquidaton (2) any reference to the "official liquidator" in this part and part ilia shall be construed as including a reference to any liquidator of a banking company stay ot proceed inis m notwitiastaddia anything to the contrary contained in section 486 of the companies actl 1956, the high court shan not make pny 1 of 1811 order stayill' the proceedings in relation to the winding up of a bankini company, unless the high court is satisfted that an arrangement has been made whenby the company can pay its depositors in full as their claims accrue pre liminary report by official li quidator u notwithstanding anything to the contrary contained in section 455 of the companies act, 1956, where a winding up order bas ibeen 1 of 1956 made in respect of a banking company whether before· or after the commencement of the banking companies (second amendment) act, 1960, the official liquidator shall submit a preliminary report 37 of 1880 to'the lftgh'court within two months from the date of the winding up oi"der or where the winding up order has been made before such commencement, within two months from such commencement, gi-ving the information required by that section so far as it is available to him and also stating the amount of assets of the banking company in cash which are in his custody or under his control on the date of the report and the amount of its assets which are likely to ·be collected in cam before the expiry of that period of two months in order that such assets may be applied speedily towards the making of preferential payments under section 530 of the companies act, 1956, and in the discharge, as far as possible, of the liabilities 1 of 1956 and obligations of the banking company to its deppsitors and other creditors in accordance with the provisions hereinafter contained; and the exilcioal liquidator shall make for the purposes aforesaid every en4ea~ to· collect in cash as much of the assets of the banking ccmilpary u prhticable notice to preferential claimants andsecur edand unsecured creditor!! ma (1) within fifteen days from the date of the windin~ up oraer of a banking company or where the winding up order has been made befol!e the commencement of the banking companies (second amendment) act, 1960, within one month from such com- 37 of 1960 meucement the oftidal liquidator shall, for the purpose of making an estimate of the debts and liabilities of the banking company (other than its liabilities and obligations to its depositors), by notice lerved in such manner as the reserve bank may direct, call upon-(4) every claimant entitled to preferential payment under etlon 530 of the companies act, 1956, and 1 of 1958 (b) every secured and every unsecured creditor, to send to the official liquidator within one month from the date of tm lief\iilee of; the nouce a statement of the amount claimed by him (2) every notice under sub-section (i) sent to a claimant havine a claim under section 530 of the companies act, 1956, shall 37 of 1860 state that if a statement of the claim is not 8etl~ to the ·olncial liquidator lberore the expiry of the period of one month from the date of the service, the claim shall not be treoated as a claim entitled to be paid under section 530 of the companies act, 1956, in priority to all other debts but shall be treated as an ordinary debt due by the banking company (3) every notice under sub-section (1) sent to a secured creditor shall require him to value his security before the expiry of the period of one month frorn the date of the service of the notice 81ld shall state that if a statement of the claim together with the valuation of the security is not sent to the offtelal liquidator before the expiry of the sald period, then, the omcial liquidator shall blmself value the security and such valuation shall be bindibg on the creditor  1 of 1956 (4) if a claimant fails to comply with the notice sent to him under sub-section (1), his claim will not be entitled to be paid under section 530 of the companies act, 1956, in priority to all other debts lbut shah be treated as an ordinary debt due by the banking company; and if a secured creditor fails to eomply witl1 the notice sent to him under sub-section (1), the official liquidator shall himself value the security and such valuation shall be binding on the creditor 1 ef 1956 42 notwithstanding anything to the contrary contained in sec- power to tions 460, (64 and 465 of the companies act, 1956, the high court dispenae may, in the proceedings for winding up a banking company, dis- with pense with any meetings of creditors or contributories or with thp mfeetedi~s - 0 cr 1-appomtment ofa committee of inspection if it considers that no tors, etc object will be secured thereby sufftcient to justify the delay and expense 1 of 1956 43 in any proceeding for the winding up of a bankblg :coul- booked pany, every depositor of the banking company shall be deemed to d it ' have filed his claim for the amount shown in the books of the c:ta ora banking company as standing to his credit and, notwithstanding to be anything to the contrary contained in sectien 474 of the companies deemed act, 1956, the high court shall presume such claims to have been proved proved, unless the officlel liquidator shows that there is reason for doubting its correctness 37 of 1960 43a (1) in every proceeding for the winding up of a banking prefercompany where a winding up order has been made, whether before ential or after the commencement of the banklngcompanies (second r07ent~ amendment) act, 1960, within three months from the date of the sl:-winding up order or where the winding up order has been made  ':' before such commencement, within three months therefrom, the 1 of 1956 j preferential payments referred to in section 530 of the companies act, 1956, in respect of which statements of claims have been sent within one month from the date of the service of the notice referred to in section 4ia, shall be made by the official liquidator or adequate provision for such payments shall be made by him (2) after the preferential payments as aforesaid have been made or adequate provision has been made in respect thereof, there shall be paid within the aforesaid period of three months-(a) in the first place, to every depositor in the savings banks account of the' banking company a sum of two hundred and fifty rupees' or the balance at his credit, whichever is less; and thereafter, (b) in the next place, to every other depositor of the banking company a sum of two hundred and fifty rupees or the balance at his credit, whichever is lesa, in priority to all other debts from out of the remaining assets of the hanking company available for payment to general creditors: provided that the sum total of the amounts paid under clause (a) and clause (b) to anyone person who in his own name (and not jointly with any other person) is a depositor in the savings bank account of the banking company and also a depositor in any other account, shall not exceed the sum of two hundred bnd fifty rupee'!   (3) where within the aforesaid period of three months full payment cannot be made of the amounts required to be paid under clause (a) or clause (b) of sulb-section (2) wi,th the assets in cash the official liquidator shall pay within that period to every depositor under clause (a) or, as the case may be, clause ('0) of that subsection on a' pro rata basis so much of the amount due to the depositor under that clause as the official uquidatot' is able to pay with those assets; and shall pay the rest of that amount to every such depositor as and when sufficient assets are collected by the oftlclal liquidator in cash (4) after payments have been made first to depositors in the savings bank account and then to the other depositors in accordance with the foregoing provisions the remaining assets of the bankinj;!: coinpany available for payment to general creditors shall be utilised for payment on a pro rata basis of the debts of the general creditor" and of the further sums, if any, due to the depositor!'!; and after making adequate provision for payment on a pro rata basis as aforesaid of the debts of the general creditors, the official liquidator shan, as and when the assets of the company are collected in cash, make payment on a pro rata basis as aforesaid, of the further sums, if any, which may remain due to the depositors referred to in clause (a) and clause (b) of sub-section (2) (5) in order to enable the official liquidator to have in his custody or under his control in cash as much of the assets of the banking company as possible, the securities given to every secured creditor may be redeemed by the official liquidator-(a) where the amount due to the creditor is more than the value of the securities as assessed by him or, as the case may be, as assessed by the official liquidator, on payment of such value; and (b) where the amount due to the creditor is equal to or less than the value of the securities as so assessed, on payment of the amount due: provided that where the official liquidator is not satisfied with the valuation made by the creditor, he may apply to the high court for making a valuation (6) when any claimant, creditor or depositor to whom any payment is to be made in accordance with the provisions of this section, cannot ,be found or is not readily traceable, adequate provision shall be made by the official liquidator for such payment (7) for the purposes of this section, the payments specified in each of the following clauses shall be treated as payments of a different class, namely;-1 of 1956 (a) payments to preferential claimants under section 530 of the companies act, 1956; (b) payments under clause (a) of sub-section (2) to the depositors in the savings bank account; (c) payments under clause (b) of sub-section (2) to the other depositors; (d) payments to the general creditors and payments to the depositors in addition to those specified in clause (a) and clause (b) of sub-section (2) (8) the payments of each different clue specified in sub-section (7) shall rank equally among themselves and be paid in full unless the assets are insufficient to meet them, in which case they shall abate in equal proportion  17m(b) l8-9 •(9) nothing contaln~ in sub-secttons (2), (3), (4), (7) end (8) shall apply to a banklng company in nspect of the depositors of whieh the deposit insuranee corporation is liable under lm!(!tign 16 of the deposit insurance corporation act, 1961 (10) after preferential peyment£ referred to in wb-section (1) have been made or adequate provijion baa been made in respect thereof, the remaininc uaets <jf the banking company referred to in sub-section (9) available for payment to general creditors shall be utilised for payment on pro tate basis of the debts of the general creditors and of the sums due to the depositors: provided that where any amount in respect of any depcmlit is to be paid by the liquidator to the deposit insurance corporetion under section 21 of the deposit inaurance corporation act, 1961, 47 of 1961 only the balance, if any, left after making the said payment shall be payable to the depositor 1 of 1956 44 (1) n()twithatandina anything to the contrary contained in section 484 of the companies act, 1956, no banking company may be voluntarily wound up unless the reserve bank certifies in writinl that the company is able to pay in full all its debts to its creditors as they a,ccrue ! : 1 powers of high court in voluntary winding up (2) the high court may, in any cue where a qankidg company is being wound up voluntarily, make an order that the voluntary windijli up shall continue, but subject to the supervision of the court ! (3) without prejudice to the provlslons contained in sections 441 and 521 of the cotwpanies aot, 19k, the high court may of its 1 of 1956 own motion and shall on the applicati'mi of the ~ bank, order the winding up of a banking company by the high court in any of the following cases, namely: -i (a) wh@fe tm banking company is beinr wouncl up voluntarily and at any stage during the voluntwy wiftdtftg up proceedings the company is not aible to meet its debts as they accrue; or ' (b) where the banking company is being wound u'p voluntarily or is being wound up subject to the supervisi<m at the court and the high court is satis6ed that the voluntary winding up ol" windmg "p subject to the 5uperviston of the court cannot be continued without detriment to h int  est~ of the depositors ua (1) notwithstanding anything contained in any law for the procedure time being in force, no banking company shan be amalgamated for amtal-"  h gama 10n wlth another banking company, unless a scheme containing t e of bankterms of such amaleamation has been placed in draft before the ing comshareholders of each of the banking companies concerned separately, panies and approved by a resolution passed by 'a majority in number representing two-thirds in value of the shareholders of each of the said companies, present either in person or by proxy at a meeting called for the purpose (2) notice of every such meeting as is referred to in sub-section (j) shall be given to every shareholder of each of the banking eompanies concerned in accordance with the relevant articles of association, indi(:ating the time, place and object of the meeting, and shall also be published at least once a week for three consecutive weeks in not less than two newspapers which circulate in the locality or localities where the registered oftices of the banking companies concerned are situated, one of such newspapers being in a language commonly understood in the locality or loealit~ (3) any shareholder, who has voted against the scheme of amalgamation at the meeting or has given notice in writing at or prior to the meeting to the company concerned or to the presiding officer of the meeting that he dissents from the scheme ofamalgamation, shall be entitled, in the event of the scheme being sanctioned by the reserve bank, to claim from the banking company concerned, in respect of the shares held by him in that company, their value as detennined by the reserve bank when sanctioning the scheme and such determination by the reserve bank as to the wlue of the shares to be paid to ,the disaejlung llihareholder shall he final for an purpoees i (4) if the scheme of amalgamation is approved by the requisite majority of shareholders in accordance with the provisions of w, section, it shall be submitted to the reserve bank for sanction and !'hau, if 88nct1oned by the reserve bank by an order in writing passed in this behalf, be binding on the banking companies oon (!erned and also on all the shareholders thereof - - - - - (6) on the sanctioning of a scheme of amalgamation by the reserve bank the property of the amajia,liulted banldng company ehall, by virtue of the oroer of sanction, be transferred to and v~t in, and the uabuitiqi of the aid company shall, by virtue of tb~ said order be transferred to, and become the liabiljties of, the banking ~y waich under the sclteme of malgramation is to acquire tbe bujiness of the amalgamated banking company, slolbject in au (ases to the provisions of the scheme as sanctioned (6a) where a scheme of amalgamation is sanctioned by the reserve bank under the provisions of this section, the reserve bank may, by a further order in writing, direct that on such date as may be specified therein the banking company (hereinafter in this section referred to as the amalgamated banking company) which by reason of the amalgamation will cease to function, shall stand dissolved and any such direction shall take effect notwithstanding anything to the contrary contained in any other law (6b) where the reserve bank directs a dissolution of the amalgamated banking company, it shall transmit a copy of the order directing such dissolution to the registrar before whom the banking company has been registered and on receipt of such order the registrar shall strike off the name of the company 55 of 1963 (6c) an order under sub-section (4) whether made before or after the commencement of section 19 of the banking laws (miscellaneous provisions) act, 1963 shall be conclusive evidence that all the requirements of this section relating to amalgamation have been complied with, and a copy of the said order certified in writing by an officer of the reserve bank to be a true copy of such order and a copy of the scheme certified in the like manner to be a true copy thereof slndl, in al1 legal proceedings (whether in appeal or otherwise and whether instituted before or after the commencement of the said section 19), !be admitted as evidence to the same extent as the original order and the original scheme 1 of 1956 (7) nothing in the fore~oing provisions of this section shall affect the power of the central government to provide for the amal~a­tion of two or more banking companies under section 396 of th~ companies act, 1956: provided that no such power shall be exercised iby the central government except after consultation with the reserve bank 44b (1) notwithstanding anything contained in any law for the time being in force, no high court shall sanction a compromise or arrangement between a banking company and its creditors or any class of them or between such company and its members or any class of them or sanction any modification in any such compromise or &rrangem!mt unless the compromise or arrangement or modification, as the case may be, is certified by the reserve bank in writing as not being incapable df being worked and as not being detrimental to the interests of the depositors of such banking company restriction on compromise or arrangement between banking company and creditors (2) where an application under section 391 of the companies j of 1956 act, 1956, is made in respect of a banking company, the high court may direct the reserve bank to make an inquiry in relation to the affairs of the banking company and the conduct of its directors and when such a direction is given, the reserve bank shall make, such inquiry and submit its report to the high court 45 - - - - - | power      | of    ||------------|-------|| reserve    |       || bank       | to    || apply to   |       || central    |       || govern-    |       || mentfor    |       || suspen-    |       || sion of    |       || business   |       || by         |       || a          |       || banking    |       || company    |       || and        | to    || prepare    |       || scheme     |       || ofrecon-   |       || 'stitution |       || oramal-    |       || gamation  |       |(4) during the period of moratorium, if the reserve bank is satisfied that-(a) in the public interest; or (b) in the interests of the depositors; or (c) in order to secure the proper management of the banking company; or (d) in the interests of the banking system of the country as a whole,-it is necessary so to do, the reserve :sank may prepare a scheme-(i) for the reconstruction of the banking company, or (ii) for the amalgamati9n of the banking company with any other banking institution (in this section referred to as "the transferee bank") (5) the icheme aforesaid may contain provilaion for all or any of the following matters, namely:-(a) the constitution, name and registered office, the capital, assets, powers, rights, interests, authorities and privileges the liabilities, duties and obligations, of the banking company on its reconstruction or, as the case may be, of the trall9feree bank; (b) in the case of amalgamation of the banking company, the transfer to the transferee bank of the business, properties, assets and liabilities of the banking company on such terms and conditions as may lbe specified in the scheme; (c) any change in the board of directors, or the appointment of a new board of directars, of the banking company on its reconstruction or, as the case may be, of the transferee bank and the authority by whom, the manner in which, and the other terms and conditions on which, such change or appointment shall be made and in the case of appointment of a new board of directors or of my director, the period for which such appointment shall be made; f t (d) the alteration of the memorandum and articles of association of the banking company on its reconstruction or, as the case may be, of the transferee bank for the purpose of altering the capital thereof or for such other purposes as may be necessary to give effect to the reconstruction or amalgamation; (e) subject to the provisions of the scheme, the continuation by or against the banking company on its reconstruction or, as the case may be, the transferee bank, of any actions or proceedings pending against the banking company immediately before the date of the order of moratorium; (f) the reduction of the interest or rights which the members, depositors and other creditors have in or against the banking company before its reconstruction or amalgamation to such extent as the reserve bank considers necessary in the public interest or in the intereste of dae members, ciep08itors and other creditors or for ,the maintenance of the business of the banldng company; (g) the payment in cash or otherwise to depositors and adler  c!'editors in full satisfaction of their claim-(i) in reiip8ct of thn interest or rifjhtll in or against tke banking eompany before its reconstruction or ajllal,amation; or (ii) where their interest or rights aforesaid in or against the banking company has or have been reduced under clause <f), in respect of such interest or rights as so reduced; (h) the allotment to the members of the banking company for shares held by them therein before its reconstruction or amalgamation [whether their interest in such shares has been reduced under clause (f) or not], of shares in the banking company on its reconstruction or, as the case may be, in the transferee bank and where any members claim payment in cash and not allotment of shares, or where it is not possible to allot libares to any members, the payment in cash to those members in full satisfaction of their claim-(i) in respect of their interest in shares in the banking company before its recanstruction or amalgamation; or (ii) where such interest has been reduced under clause (i), in respect of their lnterest in shares as so reduced; 1401 1947 (i) the continuance of the services of all the employees of the banking company (excepting such of them a8 not being workmen within the meaning of the indu&tiial disputes act, 1947 are specifically rrhmtioned in the scheme, in the banking company itself on its !l'eeonstruetion or, as the case may be, in thetransfeloee bank at the same remuneration and on the same tenns and conditions of service, which they were getting or, as the cate may be, 'by which they were being governed, immediately before the date of the order of moratorlum: provided that the scheme shall contain a provilion that-(£) the banking company shall pay or grant not later than the expiry of the period of three years from the date on which the scheme is sanetioned by the central government, to the said employees ,the same remuneration anci the same tenns and conditions of service as are applicable to employees of coiitesponding rank or status of - comparable bankijlg company to be determined for this purpose by the reserve bank (whose determination in this respect shall be final) ; (ii) the transferee bank shan payor grant not later than the expiry of the aforesaid period of three years, to the said employee5 the same :remunerathm and the same terms and conditions of service as are apptieable 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 further 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 qther employees of corresponding rank or status of the transferee bank, the doubt or difference shall be referred to the reserve bank whose decision thereon shall be final; (j) notwithstanding anything contained in clause (i) where any of the employees of the ibanking company not being workmen within the meaning of the industrial disputes act, 1947 are 140f 1947 specifically mentioned in the scheme under clause (i) or where any employee8 of the banking company have by notice in writing given to the banking company or, as the case may be, the transferee bank at any time before the expiry of one month next following the date on which the scheme is sanctioned by the central government, intimated thei!r intention of not becoming employees of the banking company on its reconstruction or, 83 the case may be, of the transferee bank, the payment to such employees of compensation, if any, to which they are entitled under the industrial disputes act, 1947, and such pen- 14 of 1947 sion, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the banking company immediately before the date of the order of moratorium; {k) any other terms and conditions for the reconstruction or amalgamation of the banking company; (l) such in¢dental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation :mail be fully and effectively carried out (6) (tt) a copy of the scheme prepared by the reserve bank shall be sent in draft to the banking company and also to the traiui-feree bank and any other banking company concerned in the amalgamation, for suggestions and objections, if any, within such period as the reserve bank may specify for this purpose; (b) the reserve bank may make such modifications, if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the banking company and also from the transferee bank, and any other banking company concerned in the amalgamation and from any members, depositors or other creditol'l of each of thole companies and the transferee bank (1) the scheme shall the~ter be placed before the central ~vemment for its sanction and the central government may sancbon the scheme without any modifications or with such modifications as it may consider necessary; and the scheme as sanctioned by tha central govermnent shall come into force on such date as the central government may sp~ify in this behalf: provided that different dates may be specified for different provisions of the scheme (7a) the sanct~'on accorded by the central government under sub-section (7), whether before or aiter ihe commencement of sec-55 of 1983 tion 21 of the banking law; (miscellaneous provisions) act, 1963, shall be conclusive evidence that all the reauirements of this sec--tion relating to reconstruction, or, as the case -may be, amalgamation have been complied w:th and a copy of the sanctioned scheme certified in writing by an officer of the central government to be a true copy thereof, shall, in all legal proceedings (whether in appeal or otherwise and whether instituted before or after the commencement of the said section 21), be admitted as evidence to the same extent as the original scheme (8) on and from the d!te of the coming into operation of- the scheme or any provision thereof, the scheme or such provision shall be binding on the banking company or, as fhe case may be, on the transferee bank and any other banking company concerned in the amalgamation and 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 liabuity 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 a<;sets of the ibanking 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 tz:ansfer,ee bank (10) if any difficulty arises in giving effect to the ~rovlsi~ns of the scheme the central government may by order do anything not inconsistent with such provisions which appears to it necessary or expedient for th~ purpose of removing the difficulty (11) copies of the scheme or of any order made under sub-section (10) shallibe laid before both houte, of parliament, as soon as may be, after the scheme has been sanctioned by the central government, or, as the case may be, the order has been made  1784(b) ls-10(11) where the icheme 1s a acheme far amalaamatioo of the bin" ing company, any business acquired by the transferee bank under the scheme or under any provision thereof shall, after the coming into operation of the scheme or such provision, be carried on by the transferee bank in accordance with the law governing the transferee bank, subject to such modifications in that law or such exemptions of the transferee bank from the operation of any prov1sions thereof as the central government on the recommendation of the reserv~ bank may, by notification in the offtc1a1 gazette, make for the pur-  pose of giving full effect to the scheme: provided that no such modification or exemption shall be ~ade 10 as to have effect for a period of more than seven years from the date of the acquisition ofluch business ' (13) nothing in this section hall be deemed to ·prevent the amalgamatlon with a banking institution iby a lingle icheme of leveral banking companies in· respect of each of which an order of moratorium has been made under this aeeuon (14) the provisions of this section and of any scheme made under it hall have effect notwithstanding anythinl to the contrary contained in any other provisions of this act or in any other law or any agreement, award or other instrument for the time being in force (15) in this ·aection, "banking institution" meallj any banktn company and includes the state bank of india or any other banldn, idstitution notifted by the central government under ection 51  part ula special paovisions or speedy disposal of wnminc up pbocdd~panuia to over ride other law  45a the provisiollj of this part and the rules made thereunder shall have effect notwithstanding anything incoi'llistent therewith contained in the companies act, 1956 or the code of civil procedure, 1 or 1958 1908 or the code of criminal procedure, 1898 or any other law for ~ of 1908 the time being in force or any instrument having effect by virtue ~ of 1818 of any such law; but the provisions of any such law: or io8trument in so far 81 the same are not var1ed by, or incons1ftent with, the provislo~ of this part or rules made thereunder shall apply to all proeeecunga uncle, tbjt part ~~1i the h!&h court ihall save as othnv~ expressly provided power oc in section 4sc, ha\l'e exclusive jurisdiction to entertain and decide hiih any claim made by or against a banking company which is being ~o~ ~ wound up (including claims by or against any of its branches in e~: id india) or any applkatiol1 made under section 391 of the companies respect" 1 or 1151 act, 1956 by or in rf'spect of a bankinl' company or any question of badldjl priorities or any other question whatsoever whether of law or fact com-"'hich may ftlate to or arise in the course of the winding up of a pml  banking company, whether such claim or question has arisen or arises or such application has been made or is made before or after the date of the order for the winding up of the banking company or before or after the commencement of the banking companies 52011951 (amendment) ad - 1953 -&sc (1) where a winding up order is made or has been made in tridiifer jeaped of a banking company, no suit or other legal proceeding ofpendl, whether civill or criminal, in respect of which the high court has ~ jurisdiction under this act and which is pending in any other court immediately before the commencement of the banking companies 62011953 (alnendment) act, 1953, or the date of the order for the winding up of the banking company, whichever is later, shall be proceeded with exc,pt in the manner hereinafter provided (2) the omelal liquidator shau, within three months from the date of the winding up order or the commencement of the banking 52 of 1953 companies' (amendment) act, 1953, whiabever is later, or such further time as the high court may allow, submit to the high court a report containin& a list of all such pendin, proceedings together with particulars thereof  ~ (3) on receipt of a report under sub-section (2), the high court may, if it 10 thinks fit, elve the parties concerned an opportunity to show cause why the proceedings should not !be transferred to itself and after making an dnquiry in such manner as may be provided by rules made under section 45u, it shall make such order a it deems fit transferring to itself all or such of the pending proceedinll as may be lp!ici1led' in the order and such proceedings ·shall thereafter be disposed of by the high court    (4) u any, proceeding pending lin a court is not 10 transferrecl to the high court under sub-sectfon (3), such proceeding shall be con-tioued in·the courtln which the proceeding was pending (5) nothing in thilseetion shall apply to any proceeding pending in' appeal before' the supreme court or a wsb court 45d (1) notwithstanding anything to the contrary contained in any law for the time being in force, the hlga ·courtmay settle in the manner hereinafter provided a list of debtors of a lbanking company which is being wound up (2) subject to any rules that may be made under section 52, lhe official liquidator shall, within six _ months from the date of the winding up order or the commencement of the banking compan· es (amendment) act, 1953 whichever is later, from time to time, fil:! 52of195s to the high court lists of debt9rs containing such particulars as ar~ specified in the fourth schedule: pilovided that such lists may, with the leave of the rgb cjurt, be filed after the expiry of the said period of six months (3) on receipt of any list under sub-section (2), the high court shall, wherever necessary, cause notices to be issued on all persons aftected and after making an inquiry in such manner as may b~ provided by rules made under section 45u, it shall make an order settling the list of debtors: :-~=! provided that nothing in this section shall debar the high curt from settling any such list in part as against such of the p!t'son-; whose debts have been settled without settling the debts of a:l :he persons placed on the list (,r (4) at the time of the settlemert of any such list, the high court shall pass an order fot the payment of the amount due by each debtor and make such further orders as may be necessary in respect of the relief claimed, including reliefs against any guarantor or in respect of the realisation of any security (5) every such order shall, subject to the provisions for appeal, be final and binding for all purpos:s il5 between the banking company on the one hand and the p~rson against whom the order is passed and all persons claiming - hrough or under him on the other hand, and man be deemed to be a decree in a suit (6) in respect of every such order, the high court shall issue a certificate specifying clearly the reliefs granted and the names and descriptions of the parties against whom 6uch reliefs have been granted, the amount of costs awarded and by whom, and out of what funds and in what proportions, such costs are to be paid; and every such certificate shall be deemed to be a certtfted copy of the decree for all purposes including execution (7) at the time of setuing the 11stof debtors qr at any ether tune prior or subsequent thereto, the high colou't shan have power to pass any order in respect of a debtor on the application of the offtcial liquidator for !the realisation, management, protection, preservation or sale of any property glven as secwity to the banking company and to give such powers to the official liquidator to carry out aforesaid directions as the high court thinks tit (8) the high court shall have power to sanction a compromise in respect of any debt and to order the payment of any debt by instalments (9) in any case in which any such list is settled ex parte as against any pers)n, such person may, within thirty days from the date of th? order settling the list, apply to the high court for an order to vary such list, so far as it concerns him, and if the high court is satisfied that he was prevented by any sufficient cause from appearing on the date ftxed for the settlement of such list and that he h" a gjoel d?fence to the claim of the banking company on merits the high court may vary the list and pass such orders in relation thereto as it thinks fit: provided that the high court may, if it so thinks fit, enterta', the application after the expiry of the said period of thirty days (10) nothing in this section shall-(a) apply to a debt which has been secured by a mortgage of immovable property if a third party has any interest in such immovable property; or (b) prejudice the rights of the official liquidator to recover any debt due to a banking company under any other law for the time being in force '5e nothwithstanding that the l!st of the contributories has not special 1 of 1966 been settled under section 467 of the companies act, 1956, the high provisiona court may, if it appears to it necessary or expedient so to do, at any to make t· aft makin  di d ak 11 d d calls on une er g a win ng up or er, mea ca on an or er pay- contribument thereof by any con ributory under sub-section (1) of section 470 tories 1 of 1956 of the companies act, 1956, if such contributory hasbe~nplaced on the list of contributories by the ofticial liquidator and has not appeared to dilpute his liability 45f (1) entries in the books of account or other documents of a docubatlking company which is being wound up shall be admitted in evi- ments of dence in all legal proceedings; and all such entries may be proved bankin, either by the production of the books of account or other documents ~~pany of the banking company containing such entries 9r by the ,pl'oduction ;id:nce of a copy of the entries, certified by the otlclal ,liquidator under hja sipature add itatjna that it 18 a true copy of the"orlginal entriea and that such original entries are contained in the books of accoudt or other documents of the banking company in his possession (2) notwithstanding anything to the contrary contained in the indian evidence act, 1~72, all such entries in the books of account or 1 tjf 1871 other documenta of a banking company shall, as againit the directors officers and other employees of the banking company in respect of which the winding up order has been made be prima facie evidence of the truth 01 all matters purporting to be therein recorded public examination of directors and auditors 45g (1) where an order has been made for the winding up of a banking company, the official liquidator shall submit· a report whether in m, opinion any lois has been caused to the bankina company since its formation by any act or omission (whether or not a lraud has been committed by such act or omission) of any person in the promotion or formation of the banking company or of any director or audltor of the banking company (2) h, on coiliic1eration of the report submitted under iub-section (1), the high court is of opinion that any person who has taken part in the promotion or formation of the bankini company or hu been a director or an auditor of the banking company should be publicly examined, it shall hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall attend thereat and shall ,be publicly examined as to the promoti~n or formation or the conduct of the business of the bankin, company, or as to his conduct and dealings, in so far as they relate to the affairs of the banking company: provided that no such person shall be publicly ekamined unlesi be hal been liven an opportunity to show cause why he mould not be ao newmd (3) the oftlcia1llqaidator hall take part in the examination and for that purpose may, if specially authorized by the high court in that behalf, employ such legal assistance as may- be sanctioned by the hlp ceart ,,'  '(4) any creditor'or eontributory may also ~jw1'in the exanunation either penonally or by any penon entitled to appear before the high court -(5) the high court may put such questions to the person examlnecfu it th1iib at  ' ~    '"' (5) the period ~ ~ be examined od', oath jj)d abell  all uch q1mltiom a the hitb court ma, ,put or, ~ to be put;to~ (1) ~pejwa  to  1_ und tws seet~cijd " ' htl own eqlt, employ any pero!) entitfecl taappec befcmt the hi,h court who shall be at liberty to put to him stkh qu~ods as the high c~urt may deem just for the purpose of enabling him to explain or qualify any answer given by him: provided that if he is, in the opinion of the high court, exculpated from any charges made or suggested against ·him, the high court may allow him such costs in its discretion as it may dee~ flt (s) notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person· evamined and may thereafter be used in evidence against him in any proceeding, civil or criminal, and shall be open to the inspection of any creditor or contributory at all reasonable times (9) where on such examination, the high court is of opinion (whether a fraud has been committed or not)-(ei) that a person, who has been a director of the banking company, is not fit to be a director of a company, or (b) that a person, who has been an auditor of the banking company or a partner of a firm acting as such auditor, is not fit to act as an auditor of a company or to be a partner of a ftrm aet!n, as iuch auditor, the high court may make an order that that person shall dot, without the leave of the high court, be a director of, or in any way,  whether directly or indirectly, be concerned or take part in the man- agement of any company or, as the case may be, act as an auditor of, or be a partner of a firm acttng as auditors of, any company for such period not exceeding five years as may be spec~ed in the order 45r (1) where an application is made to the high court under special 10f 1958 section 543 of the companies act, 1956, against any promoter, director, provisions manager, liquidato~ or ofreer of a banking company for repayment ~or aue3-or restoratioll of any money or property and the applicant makes out ~inl a prima facie case against such person, the high court shall make ;::~!es an order against such person to repay and restore the money or pro- deun perty unless he proves that he is not liable to make the repayment or quent restoration either wholly or in part: director,  etc provided that where such an order is made jointly against two or more such persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property (2) where an application is made to the high court under section 1 of i"'  543 of the companies act 1958, and the ·high court has reason to believe that a property belongs fo any promot6r, dlr&clor manager hqu1dator or ofticer of the banking company, whether the property shnds in the name of such person or any other person as an ostensible owi'l"'r, then the high court may, at any time whether before or after making an order under sub-section (1), direct the attachment of such property, or such portion thereof, as it thinb fit and the property so attached shall remain subject to attachment unless the ostensible owner can prove to the satisfaction of the high court that he is the real owner and the provisions of the code of civil pr0cedure, 1908, relating to attachment of property shall, as far as may be, 5 of llk)l apply to such attachment 451 every director or other officer of a banking company which is being wound ud ,shall~ve such assistance to the ofttctal liauidator as he may reasonably require in connection with the realisation and distribution of the property of the banking company  duty of direct on andofb-cersof banking company to assist in the realisation of property special cu (1) the hi~h court, mav if it thinks fit, take cognizance of provi ions !lnd try in a summary way any offence alleged to-have been c~mmit­for punishing ted by any person who has taken part in the promot;onor formation offences of the bankin~ company which is being wound up or by any director, in rela manager or officer thereof: tion to provided that the offen"e is one puni:shable under this act or bankin, under the companies act, 1956 1 of 1958 cbomi panles (2) when trying any such offence as aforesaid, the high court en, wound up may also try any oth'"r offence not referred to in sub-section (1) which is an offence with which the accused may, under the code of criminal procedure, 1898, be charged at the same trial ii of 1898 (3) in any case tried summarily, under sub-section (1), the high court-(4) nl"ed 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 purpose unless such adjournment is, in the opinion of the high court, necessary in the interests of justice; (c) shall, before passing any sentence, record judgment embodying the substance of the evidence and also the particulars specified in section 263 of the code of criqlinal procedure, 1898, 5 of 1898 so far as that section may be applicable; an"- nothing cqntained in sub-section (2) 'of semion 262 of the code of criminal proeedure, 1898, sliail apply to any such tlialj ' & of:1t8t l of 1108 50f 1888 (4) all offences in relation to winding up alleged to have been committed by any person specified jn sub-section (l) 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 lof 1888 (5) notwithstanding anything to the contrary contained in the code of criminal procedure, 1898, the high court may take cognizance of any offence under this section without the accused being committed to it for trial and all such trials shall be without the aid of a,jury 45k [power of high court to enforce schemu of clttan,gements, t!tc] rep by the banking companies (amendment) act, 1959 (33 of 1959), 8 31 (we! 1-10-1959) 1 of 1856 i of 1856 45l (l) where an application for sanctioning a compromise or  t  t f b ki  ddt' pubbc llrrangemen 10 respec 0 a an ng company is rna e un er sec ion examina :191 of the companies act, 1956 or where such sanction has been given tion of ilnd the high court is of opinion, whether on a report of the reserve directors bank or otherwise, that any person who has taken part in the pro- and motion or formation of the banking company or has been a director ar~tors or auditor of the banking company should be publicly- examined, it e c: l~ d· ch  t' f h d h '  f respe may irect su examma 10n 9 sue person~ an t e prpv1slons 0 of a section 45g shall, as far as m~y be, apply to the banlqng company as banking they apply to a ,banking company which is being wound up company iinder (2) where a compromise or arrangement is sanctioned under schemes of section 391 of the companies act, 1956 in respect o( a banking ~m- arrange_ l')8ny, the provisions of section 543 of the said act and of sectton 45h ment:· of this act shall, as far as may be, apply to the banking company as -  they apply to a banking company which is being wound up as if the (~rder ~sanctioning the compromise or arrangement were an order for the winding up of the banking company " \ (3) where a scheme of reconstruction or amalgamation of a banking company has been, sanctioned by the central government under section 45 and the central government is of opinion that any person lvho has taken part in the prornotion or formation pf the banking company or has been a curector or  auditor of the 'hankingcompa~ should be publicly examined, that government may ,pply to t,he high court for the examlnauon of such person a':ld i~ on such exanlination ,the high court 'finds (whether a fraud has been' commit\ed •• ~ ", - ~ c' '  ,  ' _"" _ "  " , '¥"' - • ' - '"  ," " 1784 (b) ls-:-ll h l'\ot) that tht perao~ ia not fit ~ be a dixector of a comp~ ql' ~ act al iii auditor or a company or to bea pwtner of  finn actina_ tueb auditors, the central government shall, make an order that that person shall not without the leave of the central govermnent be a director of or in any way, whether directly or indirecuy, be cod- cerned or take part in the management of any company or, 8i the case may be act as an auditor of, or be a partner of a finn acting u auditors of, any company for such period not ex~ five years aa may be specifted in the order (4) where a sch8d1t at mcclllltl1leuoa (li"·amalgamatlon· of 8 bankina company has been sanctioneci by tile cenclral government under gction 45, the provisions of section 548 of the: companies act, 1956, 1 of 1he and of section 45h of this act shall, as far as may be, apply to- the banking company ali they apply to a banking company which is being wound up  if the- order sadctiodijag the- scheme of reconstruction or amalgamation, 8s the cue· may be; wen an· ordft for the winding up of the bankine company; and any referedce in the said section 543 to the application of the official liquidator shall be construed as a :reference to the application of the cedtral government  '5m where any compromise or arrangement sanctioned in res-spec~~ peet of a banking company under section 391 of the companies act, provlll~ - for 1956 is being worked at the commencement of the banking com- 1 of 1818 bankidi panies (amendment) act, 1953, the hl&h court may, if it so thinks 5201 18u compani_ tit on lhe application of such bankilli- company,-workin& under (a) exculle my delirr ill g8ll:l'ying out· any of the pnmsioaa schema of the compromise or a~ or of arrangement at the com meneement of the amend mentacl (b) allow the !banking company to settle the l1st of ita debtors in accordance with the proyiaions of section 45d and in such a ca_, the provisiolls of the iiiiici uetign· shau,  far as may be, apply to the banking compa!lj,taey apply to abanking company which is being woudd up, • tf:th  order lidctioning the compromise or arrangement wen, aa oi'der for tile windlqs up of the banking company '5n (1) a:n appeal shall lie- from· any order or decision of the appea1& hiah court in a civil ptoceedin& under thia ~t when the amount qi' value of the nbjkt-matter 0/ t,be claim exeeed5 five tho~d nap  (2) thehigb may by rul pawjdtfor an appeal' agamst any __ made under section e· and the cabditi_ s1lbject to which , _ell appeal would lle (3) subject te ~ p1'o'9ilianl oflubolect1tm (l) and sub-section (t)  etwitkttadjdr mytbtda contidded' in an,- other 1,,,, for the time being in forcet every order or declllon ot the btab coul1 shall be ftnal and bindtn,tor an purposes a between the bank1d& company on the one hand, and an persons who are parties thereto and all persons claiming through or under them or any of them, on the other hod - of 1908 tlo (1) notwithstanding anything to the contrary -contained special 1n the indian limitation act, 1008 or ift my dt~r law for the tim period of being in force, in compttung the period of limitation prescribed for limitation a suit or application ~ a banking-company whieh is bping \\'oun4 up, the period commencing from the date of the pre'sentation of the petition for the winding up of the bankins compal1y siall be excluded (2) notwithatmdmg aa,thidg to 'tile egiltrary eontained in tile 9 of 1908 indian limitation act, 1908 or eection '543 til the cmftpa!lies act, 1 f 1958  1856 or in any other law for ~ tbne being in force, there shall b o  do period of limitation fdl' the reeoye'j'y 'df arream of cans from ally director of a banking company which is being wound up 01' far the enforcement by the banking company against bny of its directora of any claim based on a contract, express or implied; and in reipect of all other claims by the banking company against its directorst the period of limitation shall be twelve years from the date of the accrual, of such claims or five years from the date of the tint appointment ()f the liquidatort w~hevel' along« (3) the provisions of thb sectlcm, in ~ofar n they relate t banking companies being wound up, shall also appiy to q bankin, company in respect of which a petition for the winding up has been presented before the cotnnteftcementof the banking companl_ (amendment) act, 1ge3 52 of 1953 up where in any proceeding for the wiading up of ' banking ~e ~ompny in which y persoa other thu the lws«ve bank has "nk to been appointed as the official hquidat~r anei the high court has ~der in directed the official liquisawr to obtain the advice of the reserve :nn~, bank on any matter (which it is hereby empowered to dq), it shall up pro_ be lawful for tbe reserve bank to examine the record of any such ceedtn  proceeding and tender such advice on the matter as it may think fit 45q (1) the reserve bank shall, on being directed so tq do by powert the central government or by the high court, cause an inspection inlpeet to be made by one or 'bidi'e 41f its ofttcerl of a bankbag campanj whiea ~ bei,ngwound up and its books and meoulilts (2) on such inspection, the reset"\i'e ~ank shan submit ita report to the central oovernnum't and the high court (3) if the central go~rnment, ,on consideration of the report of the reserve bank, is of opinion that there haa been a iu~ - irregularity in the winding up proce~s, it may bring such irregularity to the notice of the high court for such action as the : high court may think fit (4) on receipt of the report of the reserve bank under sub-· section (2) or on any irregularity being brought to its notice by the · central government under sub-sect1on (3), the high court may, if it deems fit, after giving notice to and hearing the central govern-; ment in regard to the report, give such directions as it may consi-· der necessary power to 45r the reserve bank may, at any time by a notice in writing, cat11 for require the liquidator of a banking company to furnish it, within re urns h    and intor-  suc bme as ?18y be specified in the notice or such further time as mation the reserve bank may ~llow, any statement or information relat· ':ing to or connected with the winding up of the banking company, and it shall be the duty of every liquidator to comply with such  requirements e~tanation-for the purposes of this section and section 45q, a banking company working under a compromise or arrangement ,but prohibited from receiving fresh deposits, shall, as far as may' -~, be deemed to be a banking company which is being wound up chief pre 455, (1) for the purpose of enabling the official liquidator or sidency the special officer appointed under sub-section (3) of section 37 to ~istrate - take into his custody or under his control, all property, eftects and district actionable claims to which a banking company, is or appears to be magistrateentitled, the official liquidator or the special officer, as the case may to assist be, may request in writing the chief prisidency magistrate or the ~lffi~~ district, magjstrate, within whose jurisdiction any property, books i: taking " of account or other ~ocuments of such banking company may be chargeof  situate or be found, to take possession thereof, and the chief presiproperty -dency magistrate or the district magistrate, as ~e c1lse may be, of banking shall,· on such request being made to him,-company  lwng (a) take possession of such property, books of accounts or wound up other documents, and (b) forward them to the official liquidator or the special ofticer (2)  where any such property and effects are in the possession of the chief presidency magistrate or the district magistrate, tls the case may be, such magistrate shall, on request in writing being made to him by the official liquidator or the special officer referred - to in sub-sect1on (1) ,sell such property and effects and forward the ' ~et proceeds of the sale to the <?~cta\ '1iq~idat,or or tl1e special , "officer:  provided that such- sale shall, as far as practicable,· be etfected by public auction ,  (3) for the purpose of securing compliance with the provisions of sub-section (1), the chief presidency magistrate or the difitrict ~gistrate may take or cause to be taken such steps and use or c~use to be used such force ,as may, in his opinion, be necessary (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 45t (1) all orders made in any civil proceeding by a high enforce court may be enforced in the same manner in which decrees of such ment of court made in any suit pending therein may be enforced ::'!;~~_ (2) notwithstanding anything to the ~ contrary contained in the 8i?d1of 5ofl908 code of civil procedure, 1908, a liquidator may apply for the execu- ~~et tion of a decree by a court other than the one which made ,it on production of a certificate granted under sub-section (6) of section 45d and on his certifying to such other court in writing the amount ~'r~; '; :;, remaining due or relief remaining unenforced under the decree ,(i' (3) without prejudice to the provisions of sub-section (1) or ~ub-section (2), any amount found due to the banking compan,y by an order or decision of the high court may, with the leave of the high court, be recovered by the liquidator in the same mannpr a8 iiljl arrear of land revenue and for the purpose of such recovery the liquidator may forward to the collector within who~e jurisdiction the property of the person against whom any order or decision of the high court has been made is situate, a certificate under his signature specifying the amount so due and the person by whom it is payable (4) on receipt of a certificate under sub-section (3), the collector shan proceed to recover from ruch person the amount specified ~herein as if it were an arrear of land revenue: provided that without prejudice to any other powen of tne col1ector~ he shall, fol' the purposes of recovering the sam amount, have all the powers, which, under the' code of civil procedure, lot 1908 01908, a civil court has for the purpose of the recovery of an, amount due under a decree ,45u the high co~t may' make, rules consistent with this ad ~~;rot ~nd the rules made under section 52 prescribing- court to (a) the manner in which inquiries and proceedings under ~ke  ,:  part iii or part ilia may be held: ru ea (b) tile oftwjk'ft "ldch may oe tiied nmm""'; (c) the authority to which, and the conditions subject to wmm, appeals may be preferred ad the majlmr til wtrjeh tach appea1a may· be 1ued and heard; {cij any other matter for which prcwfsion has to m made for enabling the high court to effectively exercise lts-funetigds 1ld4et this act -45v for the removal of ciqubts it ja hereby declared that ~  ference in this part to a director, manager, liquidator, oftlcer or amltdr of a babkidg company shall be construed as wludingal'ef~ to _y put 01' preseat director, lilanag~ liquidator, oftloar or auditor 01 tltebaakiq oompany -  ,  referencello directors, etc,  be coo-strud incliddlaa refe~ to past dir~ etc validationo( certain proceed-inp - - - - - - - ex notwithstanding en:rthing contained inseetion 45b or ililf gther l'i'cmstcm elf tbis part or ill sectioll 11 of the bidlldni e   pant (amendment) ad 1956, no -prnclftdfng held, judgment  20 of lho livered or decree or order made before the commencement of the _ banking companies (amendment) act, 1953, by any court nall_ other than the hi~ court in respect of any matter over which the high court has jur,fsdlctiou under this act shall be invalid or be deemed ever to have heen inva1~d merely by reason of the fact that such proceeding, judgment, decree or order was held, delivered or made by a court other than the high court  paltt tv miscellaneouspenalt1e1  (1) whoever in any return, balal'\ce-sheet or other dgcument or fn ~y iilformatlon required or furnished bv or under or for the purposes of any prowh9d of this act, wilfully makes  statement which is false in any material particular, knowin~ it to be false, or wilfully cntts to make a material statement, shall 'be tlllftishable with tift mllaonment for - tenu widdl may exil!dd" ttuie yan and  allo be imb1e to ftae (!) rf any person fails to proc!uee any beck aeeount or ot'tier document or to furnish any statement or informatlm whleh under sub-section (2) of section 35 it is his duty to produce or furnish, or to answer any question relating to the business of a b~n1dng company which he is asked by an omcer ma'ktn~ an tnspection urder tturt 1ieetton, lie shall be pudiihable ·wttk :a ide which may extend to two thousand rupet!!l in respect of each ortedce, and if he ,  in auch m6aiial, 1icj a further' ftne which may extend to one bundred rupees for every d\iy during which the oftencec:odtinues (3) if any deposits are received by a banking company in contravention of an order under clause (a) of sub-section (4) of sechon 35, every director or other officer of the banking company, unless he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent it, shall be deemed to be guilty of such contravention qild shall be pwlishable with a bne which may extend to twice the amount of the deposits 80 received i  j ~ i (4) if any other provision of this act is contravened or if any default is made in cbmplying with any requirement o! this act or of any order rule or direction made or condition impoied thereunder, any person guilty of such contravention or default shall be punishable with fine which may extend to two thousand rupees, and where a contravention or default is a continuidi one, with a further fine which may extend to one hundred rupees for every day during, which the contravention or default continues (5) where a contravention or default has been committed by a campany, e'yery person· who, at the time the contravention or de-,': '< 'fault waa committed, was in charge of, and was responsible to, the campmy for the· conduct of the business of the company, as well as the company, shall be deemed to be guilty of the conuaven- tion or default and shall be liable to be proceeded apidst and punished accordingly:' i provided that nothtne contained in this sul)sectfon shall render any sucll person liable to, any punishment provided in this act if be proves thgt the cc:mtravention or default was committed without his knowledge or that he exercised all dlle diligence to prevent the contravention or default (6) notwithstanding anything contained in sub-section (5), where a· contravention or default has been committed by is comiany, and it ii proved that the same was committed with the consent or connivance of, or is gttrlbutable to any gross negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that contravention or default and au be liable to be pr~ed against rand punished accordidily  expzanatie>n--for the purposes of this sectton-(0:) "company" means any body corporate and indudea  firm or other allllodati·on of individuals; and   (b) "c:iu'ector", in relation to a firm, means e partnerja~e fifm - - - - - - coptzanceof offences 47 no court shall take cognizance of any offence 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 authorized in writing in this behalf by the reserve  bank, and no court inferior to that of a presidency magistrate or' a magistrate of the first class shall try any 'such o~ence  -  ' - - - - - special  49 the exemptions, whether express or implied, in favour of a provisioill private company in sections 90, 165, 182, 204 and 255, clauses (4) for private and (b) of sub-section (1) of section 293 and sections 300, 388a and banking 416 of the companies act, 1956, shall not operate in favour of a 1 of 1"' =~3 private company which is a banking company 49a no person other than a banking company, the reserve bank, the state bank of india or any other banking institution, firm or other person notified by the central government in this behalf on the recommendation of the reserve bank shall accept from the public deposits of money withdrawable by cheque: reltrictiodon acceptanceof deposits withdrawable by cheque provided that nothing contained in this section shall apply to any savings bank scheme run by the government change of dame by a banking eompany "d notwithstanding anything contained in section 21 of the companies act, 1956, the central government shall nl>t signify its 1 of ieee approval to the, chunge of name of any banking company unless tbe reserve bank certifies in writing thail it has no abjection to suth change i alteration of memoran dumofa bankinl company 4tc notwithstanding anything contained in the companies act, 1956, 'no application for the confirmation of the alteration of the 1 of 1958 memorandum of a banking company' shall be maintainable unleas the reserve bank certifies that there is no objection to such alteration i  certain c1aims for compensauon barred 50 no ,person shall have any right, whether in contract or other· wise, to any compensation for any loss incurred by reason of the operation of any of the provisions contained in sections 10, 12a 16, 35a, 35b, 36, 43a and ~5 or by reason of the 'compliance by a banking company' with" ,ny order or direction giv:en to, it under this act ' 51 without prej'udice to the provisions of the state bank of appliea-28 of ld&8 india act, 1955, or any other enactment, the provisions ot sections tion of 10, 13 to 15, 17, 19 to 21, 23 to 28, 29 excluding su~ction (3), 31, cert~ini prov1s 01\1 34, 35, 35a, 36 excluding clause (d) of sub-section (1), 46 to 48, 50, to the 52 and 53 shall also apply, so far as may be, to and in relation to state the state bank of india or any other banking institution notified bank of by the central government in tht behalf as they apply to and in i~dia and relation to banking companies: ~oue:ed banb provided that-(a) 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 8s 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 --~  (e) nothing contained in section 46 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 such subsidiary bank or any other banking institution notified by the central government under this section i ' 18 of 1959 explanation-the expression "subsidiary bank" in this section shall have the same meaning as in section 2 of the state bank of india (subsidiary banks) act, 1959 sz (1) - - - - power of (2) in particular and without prejudice to the generality of the g~:= foregoing power, such rules may provide for the details to be in- ment to eluded in the returns required by this act and the manner in which make such returns shall' be submitted rnd the form in which the official rul_, hquidator may file lists of debtors to the court having jurisdiction under part m or part nta and the particulars which such lists may contain and any other matter which has to be, or may be, prescribed i i - - - - - - - (4) the central government may, by rules made under this section, annul, alter or add to, all or any of the provisions of the fourth schedule' i - - - - 1784 (b) ls-12 11 'the sene bank of india ad, 19m, sh&u be umnded tbe madder epecifud in the iourtk column of the first scheciu1e, and the amendments to section 18 thereof as specified in the said 8ehedule 'lifhad be deemed to have hadeftect on and ,from the 2001 ~a)' of 8ep~,194'  -   the first 'sch®ul! (sic ection 5s) amindmbntino short title amendment y-~ a 3 " 1934 2 the reaon-e bank of (i) 10 section 17, to clause (isa) the rollow-india act, 1934-inl shan be added, namely , ·'ad 1umier tile bultida companies act 1949" (2) (a) section is ,hall be renumbered as 81ib-uction (i) of ,that section and in lub-sec:tfon (i)  '80 t'ei1l1ftibered-(i') in clause (3) sfter the 1vordi "of that retien" the fouowtlll wora"l1 be aaded, namely :-| "or                  | when      | theloan    ||-----------------------|-----------|------------|| or~                   |           |            || iliiade              |           |            || to                    |           |            || a banking company     |           |            || a                    |           |            || defined in            | the       |            || b8akida               |           |            || coinjiiiiliea         |           |            || act                   |           |            || 19<f9,                |           |            || inlt                 |           |            || lucb                  | odier     | fonn       || as                    |           |            || the                   | bank      |            || ,                   | cibiiider |            || 1cddcrieat"           | ;         |            || (il)                  |           |            || (or                   | the       |            || worda                 |           |            || "un4er                |           |            || this                  |           |            || lection",             |           |            || wherever              |           |            || they                  |           |            || occut', the           |           |            || watch                 |           |            || «under                |           |            || this                  |           |            || ub-section"          |           |            || ihall                 |           |            || be                    |           |            || lubltltut-            |           |            || ed;                   |           |            || (11)                  |           |            || ~br                   |           |            || 1ub-lectioo           |           |            || (i)                   |           |            || a                    |           |            || 80                    |           |            || 'fel\u1nlm;r-         |           |            || _~                    |           |            || the                   |           |            || followiar sub-lection |           |            || 1bau                 |           |            || be                    |           |            || inserted,             | namely:-  |            |u(2)\1vbcro abenkilll ftlft'lpenyto which loan or advance ha been made under the prorislod8 of claoe (3' of ~e«jett (i) is wound up, any sum due to the bank in reaprct of such loan or advance, shall, aubject only to the claima, if any, of any other banking company in relpcct gf lay prior 10lil 'gr idvan« mlde by ludl banking company against any aeourity, 'be alnt chup os the atm& of the bankinl cqidpib)i'" ameoclncnts year no sbort title 1 3 (3) in ,ection 4~ for lub-aectioil (6) the following lub-section shall be ,ubltituted, namely :-"(6) the bank shall, tave as hereinafter provided by notification in tke gazette of iddia,-(a) direct the inclulion in the second schedule of any bank not already 10 included which carries oil the buliness of bankina in any province of india and which-(i) has a paid-up capital and reserves of an awepte value of not less than five lalths of rupees and (ii) satisfies the bank that its iff airs are not being conducted in - manner detrimental to the interest of ite depositore; and (iii) is a company 18 defined in clause 1 of 1913 (~) of section 2 of the indian companies act, 1913, or a corporation or a company incorporated by or under any law in force in any place outside the provinces of india; @ direct the exclusion from that schedule of any scheduled bank,-(i) the aggregate value of whose paidup capital and reserves becomes at any time leas than five laltha of nap, or· (d) which ii, in the opihion of the bank after making an inspection under section 35 of' the bidkiott companies act, 1945), conduct ina itl ajfairs to the detriment' of the interests of its depositol'l, or, (iii) which foes into liquidation or otherwise ceaaea to carryon banking business : provided that the bank may, oft ipplication of the scheduled bank concerned ind su~ject tc? such conditiona, if any i it may impose, defer the makina of i direction, under lub-olaqie' w or aqb; amendment year no short title 4 2 3 c1aulc (i,) of clausc (6) for iuch period a the bank conslden reasonable to rive the scheduled bank an opportunity of increasin, the a"regate value of itt paid-up capital and reserves to not leis than five luhs of rupees or, a tbe calc may be, of removlnl the defecta in the conduct of ita affain ; (e) alter the description in that schodulc whenever any scheduled bank changea itl name &plarratitm-in this sub-section the ex-pression "value" meanl the real or exchan,eable value and not the nominal value which may be shown in tbe book, of the bank concerned; and if any dispute arises in computinll the aarepte value of the paid-up capital and reserves of a bank - a determination thereaf by the bank shall be final for the pui pose of this sub-section " '  tkbth[rd schsoulb (s" 'ccdod 29) porma poam op balancb-ihut capital and liaiiilitibs propbrty' and assbs tsriap re ,,"p rs ap  1 cash: t capital (g)-authoriaod capital  shares of ri  each  ----lnhand and witbreserve sank and 1m-~al bank (includ-ing coreijd currency notes)  hued capital   shares of ri   o o ••• ach ••••• 2 balancbs with ol'rbr baniti (howin, whether on depollt or current account) : suacribed capital •• 8haresof ri - ••••• - 1icb •••• () in india  li) out,ide india --- capital and liabilitms propbrty and assbts| ri           | ap    ||---------------|---------|| re           |         || ap          |         || re           |         || ap          |         || r •          |         || ap          |         || ,            | moniy   || iort         | notic!  || amount called | up      || ,t            |         || rt            |         || per           |         || ihare        |         || l_            |         || calla unpaid | ----    || add           |         || forfeited     |         || "bare        |         |2 rbidvb ptjnl) and otrla ridhii 3 dlposrrs and othbi accotjn11 pi¥ed depoliu " invbstmlmts (itlt ijlg mode of valuation /t • coat or marll:lt value): «) sa;!,i1f:i ~an~  ~~ current accounts, continaency accounts, etc  --4 borrowinoi prom onmr banjano companliiit, minti ate (a) in india (ii) outlide india (i) securities of the central and stile governments wi other 1rruatee lecurities, tnclud1na treasury bill of the central and stlte governments (i) shares (classifyiq into preference ordinary, deferred and other classes of ,hares and showing leparatdy share, fw-ly paid-up and partly paid-up)  (ii) debentures or bonds (i) sec:ured(ltitin, the nature of lecurity)  (iv) otherinveatmenu to be classified under proper heads (ii) unlecured (v) gold , billi payoli  s anvanc1!s (other than bad and doubtful debts for which provision has been made to the satisfaction of the auditon)  6 bills por collllco(i) loans, cash credits, overdraft, etc : (') in india  ct) outlide india  (in bill, disqounted and purchased (exc:ludln, treasur)' billi 0 the centra1 and state government) : (i) payable in india (ii) payable outside india  -  7 0rha uabili11iii (e)parti<:ulan of advance : () debu considered ,ood in respect of which the bankin, company is fully secured  i accbptancii,in- doasbmin1's ami) othdobuoanoni(is) debts oohsidered good for which the banan, c,ompany holda no other security than the debton' personal security  (iii) debu conlidcrcd good, iccured by the penonaj liabilities of one or more parties in addition to the personal iccurity of the debtors (iv) debt considered doubtful or bad, not provided for ----- 9 prom and loll:profit as per iaat baladc:e-sheet •••• (0) debu due by directors or ofllcers of the banking company or any of them either icverally or jointly with any other persona uss appropriationa ~ add profit fin the year brought from the profit and lo  account 10 continojdff (iii) debts due by compuliel or firint iii which the 4ftoct~ |                    | ri       | ap        ||--------------------|-----------|-------------|| on                 | of        | the banking || company            | ue        | in-         || terested           |           |             || as                 |           |             || direc-             |           |             || tors, partners     |           |             || or                 |           |             || managing           | qent,    |             || or,                | in        | the case    || private            |           |             || companie          |           |             || as members         |           |             || (w"                |           |             || muimum             |           |             || total              |           |             || amount             |           |             || of                 | advan-    |             || ces including      |           |             || tem-               |           |             || porary advance    |           |             || inade              | at        |             || any                |           |             || time               |           |             || during             |           |             || the                |           |             || year               |           |             || to                 |           |             || directon           | or        | mana-       || aen                |           |             || or                 | ofbcera   | of          || the                |           |             || banking            |           |             || comp-              |           |             || any                | or        |             || any                |           |             || afttem             |           |             || either 8everally   | or        |             || jointly            |           |             || with               |           |             || ~j'                |           |             || other              | perronl   |             || (j!)              |           |             || (fjir"             |           |             || muimum             | total     |             || amount             | of        | ad van-     || cel,               | including |             || tem-               |           |             || porary             |           |             || advances           |           |             || 1                  |           |             || patcd              |           |             || durm,              |           |             || the                |           |             || year               |           |             || to the             |           |             || comptlfriet        |           |             || 01'                |           |             || fhm               |           |             || in                 | which     | fht;        || gircotors          | of        | the         || bank,           |           |             || c:om,ny           |           |             || are intcrestl!d as |           |             || directors,         | part-     |             || ner               | or        | liian       || jn                |           |             || aaentl             |           |             || or,                |           |             || in                 | the case  |             || of                 | pri-      |             || vate campanita,    |           |             || s                 |           |             || members            |           |             || (ff)~             |           |             |(he) due from bank-in, companies 9 pt1rntrvu and pdtciuis leu papu-ciation (,i) 10 0'l'bia aluti in-cluding silva (to be 1pccificd) (ja) total total -  notu(ta) ctlpwi:-(i') the various clashs of capital, if any, should be diarlnluiahed (is1 sham iasued u fully paid-up pursuant to any contract ,iflhc"ut pa)mentl heine received in caah should be stated separately (iii) where circumatancea permit, issued and subscribed capital add iii1gwlt called up may be shown as one item, ',g, issued and subtcri~ capital  shares of rs  paid-up (hi) in the caae of banking companies incorporated outside india the amount of deposi=~i1ih the reserve bank of india udder sub-section (2) of aectiod j i of the i companies act, 1949, should be shown udder thia head ; the amount, however, q h 'luld not he extended to the outer column - - - - - - () i under thi, headina may he included such items a the followina :-pension or insurance fundt, unclaimed dividends, advance payment and wi8i-plred discount, liabilities to subsidiary compadjes and any other libilitie • (4) these should he classified udder tbe following categoriee :-- ,,' (i) claims apinst the bankin, company not acknowledsed a debts (ia1 money for which the bankin, company is contidlentjy liable ihowina ~­tely the amount of any guarantee sivcn by the 6ankfna company on deiwf of directors or oflioen (iil) arrears of cumulative preference dividendi (hi) liability on bill, of exchange re-diacounted (,,) liability on account of outitanding forward bxchanae contracta - - - - - - - - - - ff) w'lere the value ofthe invettmeots ~hown in the outer cohulul of the bajance heet i, hl,her than the nurltet value, the market value, ,hall he mown separately in brackets' ~ff) muimjm total outstanding balance in all such accounts as a uni t on any day during the year sbould be given undcr tbis beading (g) prerni1ci whllly or plrtly occupied by thc banking company for thc purposes of blllineh shluid be shown against "prcmi8ea less dcpreciation" in thc calc of fixed capita i upeniiture the original colt, and ihiti:lns thereto and deductions thcrefrom durina the y!ar sh )illd bc stated, as also tbe total depreciation written oft' wbere 8~ have been written of :>n a reiuction "f capital or revaluation of asicts, every balance-sheet after the first balancesheet aubacq_ent to thc reduction or revaluation should show the reduced figures with thc date and amjl1nt of thc reduction made furniture, fixtures and othcr asaets which have been c-lmplctely written off need not be sbown in tbc balance-sheet (h) undcr tllia beading may be included such items as the following whicb mult be sh:nvn under headinp suitabfy deacribed : preliminary, formation and orpnjaation cxpenses, dcvelopment expenditure commission and brokc on ahares, interest accrued on investments but not collected, taveatmenu in shares of subsidiary companies and any othcr assets (i) value shjwq shall not exceed the muket value and in casea whcre the market value i j njt a,certainable, dle estimated realisable value  formb form op profit and loss accountprofit _loss acctn4rat for the jlla, ,mud expenditure ri ap rs ap i i interest and discount interest paid on deposits, borrowiljll etc l l commiuion exchaqe toad brokerage s daries and allowances and provident fund (i bow i~, scparately ries and allowances to madlgilll director manager or chief executive emcer) 3 rents 3· director' and local committee member' fees and allowances 4· rent, taxcs, insurance jibbtlng etc' 4 net profit on sale of idvcstmcdta, gold and silver, land, premises and other assets (not credited to reserves or am' particular fund or account) tincome (lbss flto'vi s t on ~'i)t1rjng thb yba\r for bad' a'nd doubtful dbbts' and "othbr usual or nbcbssary provisions) j net pcoftf on"-valljat'flji ' 'o,f tilvfstlht:nt" 'c!:>14 and silver, 11&,, prellu$$:8 and 6 p lstage, telegrams ~~ stamps  eredltetl to reservcs or any particular fund or account)  6 income from non-~ as8ctlliild ptabt!tom sale df or dealing with such aneta  7 other receipts 8 loss (ifany) 7 auditon' fees 8 depreciation on and repairs to the bauiaa company', pr0-perty 9 stationery, p~n­tma, advertisement, etc  10 loss from sale of or dealing with non-bankinc asaeta ii other ezpenditure  u balance of profit total total - tn et 10 ii on nlc or revaluation of lnv'cstments, ;old and lilver, ladd~' p~i'aei qcl other a  eta, if aoy, may be deducted from income ,"' ' ,   the fourth schedule [see section 45d (2)] list of dmrroasl the ,ofticial liquidator shall from time to time submit listj of debtors to the hi~n' ~~! each list being veruled ~f ~ tmc!~vit 2 every such ~ shall oontain the following particulars:-(a) names ~~ ~~dreeses cyf the debtors; (b) amount of debt due to the banking company by each debtor; (c) rate of interest, if any, and the date up to which such interest has been calculated in the case of each debtor; (d) description of papers, writings and documents, if any, relating to each debt; (e) relief or reliefs claimed against each debtor 3, (a) in eve:-y such list, the official liquidator shall distinguish between the debts for which the banking company holds any security other than a personal security and the debts for which no security or only a ~rsonal security is given; (b) in the case of secured debts, particulars of the securities claimed by the banking company, and whenever possible their estimated value, and the names and addresses of person or persons, if any, having an interest in the securities or the right of redemption therein; (c) in case the debt is guaranteed by any person or persons, the name and address of the gu~rantor or guarantors with partieulars as to the extent to which th~ debt is guaranteed and descrip-  tion of documents, paper9 or ,writings in support of such guarantee 4 if the deb~or is adju!iged insolv~nt eitiler before or after he has been included in any su~h list, l:!ut before sllch list is settled, the name and ~ddre8!! of the assigriee or the' i'fceiver of his estate, as the case may be, should be stated in, or added t'? the list 5 if the original debtor dies eluter before or after he has been included in any such list, but before such list is settled, there shall be substituted in his place the names and addresses of his legal representatives as far as the official liquidator is able to ascertain  - - - - - - -  a billfurther to amend the reserve bank of india act, 1934 and the banking companies act, 1949 for the purpose of regulating the banking business of certain co-operative societies and for matters connected therewith (shri t t krishnamachari, minister of finance) 