 financial memorandumat present, the banking companies (acquisition and transfer of undertakings) act, 1970 and the banking companieg (acquisition transfer of undertakings) act, 1980 provide that paid-up capital every corresponding new bank as are specified in cohumn 2 of the 'irst schedule to the aforesaid act may be increased by the central government, from time to time, provided that the paid-up capital of any such bank shall in no case be in excess of rupees five hundred through t above ceiling of rupees five hundred crores was provided through t amendments made to the acts in 1988 the government has been contributing to the paid-up capital of the said banks in the last few years with a view to enable them to achieve over a period internationally accepted capital adequacy norms as a result, in the case of one bank, the paid-up capital has already reached the present statutory limit of rupees five hundred crores some more banks are likely to reach the maximum limit in the near futare further contribution ae respect of these banks would be possible only if the present limit is revised upwards 2 the bill therefore proposes to enhance the existing ceiling from rupees five hundred crores to rupees one thousand five hundred crores, 3 a sum of rs 70) crores has been provided for this purpose in the budget estimates of the current year as investment in the equity capital - of the nationalised banks, the expenditure will be met from out of ' the consolidated fund of india this investment will be simultaneously re-invested by the said banks in interest bearing special securities to be issued by government of india and there would therefore be no net cash outgo from government funds 4 the provisions of the bill do not involve any other expenditure - of a recurring or non-recurring nature except for payment of interest on special securities ,  annexureexrracts from the banking companies (acquisition and transfer of undertakings) act, 1970  chapter ii transfer of the undertakings of existing banks(2a) notwithstanding anything contained in suibssection (2), the paid-up capital of every corresponding new bank constituted under sub-section (1) may from time to time be increased by— (a) such amounts as the board of directors of the corresponding new bank may, after consultation with the reserve bank and with the previous sanction of the central government, transfer from the reserve fund established by such bank to such paid-up capital (b) such amounts as the central government may, in consuitation with the reserve bank, contribute to such paid-up capital: provided that the paid-up capital of any such bank shall in no case be in excess of rupees five hundred crores os %  se 9 (1)   s   (2) in particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely: - (a) the capital structure of the corresponding new bank, so however that the paid-up capital of any such bank shall not be in excess of rupees five hundred crores; :   ax  % extracts from the banking companigs (acquisition and transfer of unpertaxines) act, 1980  transfer of the undertakings of existinc banks(2a) notwithstanding anything contained in sub-section (2), the paid-up capital of every corresponding new bank constituted under sub-section (1) may frorn time to time be jnereased by— (a) such amounts as the board of directors of the corresponding new bank may, after consultation with the reserve bank and with establish ment of corres ponding new banks and business thereofthe previous sanction of the central government, transfer fror reserve fund established by such bank to such paid-up capital; (6) such amounts as the centra] government may, in consulte tion with the reserve bank, contribute to such paid-up capital: provided that the paid-up capital of any such bank shall in no be in excess of rupees five hundred crores (2) in particular, and without prejudice to the generality of the fo: going power, the said scheme may provide for all or any of the following matters, namely: - ' ever that the paidup capital of any such bank shall not be in exc of rupees five hundred crores; 