 bill no 113 of 2009 the state bank of saurashtra (repeal) and the state bank of india (subsidiary banks) amendment bill, 2009 a billto repeal the state bank of saurashtra act, 1950 and further to amend the state bank of india (subsidiary banks) act, 1959be it enacted by parliament in the sixtieth  year of the republic of india as follows:— chapter i preliminary51 (1) this act may be called the state bank of saurashtra (repeal) and the state bankof india (subsidiary banks) amendment act, 2009short title and commencement(2) it shall come into force on such date as the central government may, by notificationin the official gazette, appoint  chapter ii repeal of the state bank of saurashtra act, 1950102 (1) the state bank of saurashtra act, 1950 is hereby repealedrepeal and savings(2) notwithstanding such repeal, anything done or any action taken, including any agreement entered into under the provisions of the state bank of saurashtra act, 1950, by the state bank of saurashtra shall continue to be in force and have effect as if this act has not been enacted1510 of 1897(3) the mention of particulars in sub-section (2) shall not be held to prejudice or affectthe general application of section 6 of the general clauses act, 1897, with regard to the effectof repeal chapter iii amendments to the state bank of india (subsidiary banks) act, 195938 of 1959amendment of section 23 in section 2 of the state bank of india (subsidiary banks) act, 1959 (hereafter in thischapter referred to as the subsidiary banks act),—5(i) in clause (a), sub-clause (iv) shall be omitted;(ii) clause (i) shall be omitted;(iii) in clause (k), the words "and the saurashtra bank" shall be omitted4 in the subsidiary banks act, in section 14,—amendment of section 14(i) in the marginal heading, the words ", the saurashtra bank" shall be omitted;10(ii) in sub-section (1), the words ", the state government of gujarat in respect ofthe saurashtra bank" shall be omitted;(iii) in sub-section (2) and in the proviso, the words ", the state government ofgujarat," and "or the state government of gujarat" shall, respectively, be omitted;15(iv) in sub-section (3), the words ", the state government of gujarat" shall beomitted;(v) in sub-section (4), the words ", the state government of gujarat" shall beomitted5 in the subsidiary banks act, in section 23,—amendment of section 2320(i) for the words ", the hyderabad bank and the saurashtra bank", the words"and the hyderabad bank" shall be substituted;(ii) for the words ", the hyderabad bank or the saurashtra bank", the words "orthe hyderabad bank" shall be substitutedamendment of section 426 in the subsidiary banks act, in section 42, for the words ", the hyderabad bank orthe saurashtra bank", the words "or the hyderabad bank" shall be substituted257 in the subsidiary banks act, in section 46,—amendment of section 46(i) in the marginal heading, the words "and the saurashtra bank" shall be omitted; (ii) in sub-section (1), the words "or the saurashtra bank," shall be omitted;(iii) the explanation shall be omittedamendment of section 47308 in the subsidiary banks act, in section 47, in sub-section (1), for the words ", thehyderabad bank or the saurashtra bank", the words "or the hyderabad bank" shall be substituted9 in the subsidiary banks act, in section 49,—amendment of section 49(i) in sub-section (1), the words "or the saurashtra bank" shall be omitted; (ii) in sub-section (2), the words "or of  the saurashtra bank" shall be omitted;(iii) in sub-section (3), the words "or the saurashtra bank" shall be omitted3510 in the subsidiary banks act, in section 56,—amendment of section 56(i) in the marginal heading, the words "and the state bank of saurashtra" shallbe omitted;(ii) the words "and the saurashtra bank" shall be omitted;40(iii) the words "or the saurashtra bank, as the case may be," , at both the placeswhere they occur shall be omittedamendment of first schedule11 in the first schedule to the subsidiary banks act, in paragraph 1, in sub-paragrapha, for the words ", the bank of patiala or the saurashtra bank," the words "or the bank of patiala" shall be substituted statement of objects and reasonsthe state bank of saurashtra was constituted under the state bank of saurashtra act,1950 (10 of 1950) as amended by the state bank of india (subsidiary banks) act, 1959 (38 of 1959)  all shares of the state bank of saurashtra vest in the state bank of india in view of the recent developments in international banking scenario and for better functioning, the state bank of india has, with the sanction of the central government and in consultation with the reserve bank of india, entered into negotiations for acquiring the business, including the assets and liabilities of  the  state bank of saurashtra the terms and conditions relating to such acquisitions were agreed upon by the central board of  the state bank of  india and the board of state bank of saurashtra in the form of a scheme2 thereafter, the reserve bank of india has approved the acquisition of the business of the state bank of saurashtra and in exercise of the powers conferred by sub-section (2) of section 35 of the state bank of india act, 1955 (23 of 1955), the central government has accorded its sanction thereto accordingly, the acquisition of the state bank of saurashtra order, 2008 was published in the gazette of india, vide, notification no gsr 589(e) dated the 13th august, 2008 as per the said order, the business of the state bank of saurashtra has to be carried out by the state bank of india in accordance with the state bank of india act, 1955 after the acquisition of the state bank of saurashtra by the state bank of india, the state bank of saurashtra ceased to exist and, therefore, it is necessary to repeal the state bank of saurashtra act, 19503 there are certain provisions in the state bank of india (subsidiary banks) act, 1959(38 of  1959), which apply to the state bank of saurashtra after the acquisition of the state bank of saurashtra by the state bank of india, it is not necessary to retain such provisions in the state bank of india (subsidiary banks) act, 1959 therefore, the amendment is necessary in the provisions of the said act, in so far as they relate to the state bank of saurashtra the amendments are consequential in nature, to make provisions empowering the state bank of india to amend regulations as are applicable to the former employees of the state bank of saurashtra, their dependents and in respect of the employees of the state bank of saurashtra who opt to be governed by such regulations in accordance with the scheme of acquisition4 the bill seeks to achieve the above objectivesnew delhi;pranab mukherjeethe 20th november,  2009 annexure extracts from the state bank of india (subsidiary banks) act, 1959 (38 of 1959)definitions2 in this act, unless the context otherwise requires,—(a) "appointed day" means,—10 of 1950(iv) in relation to the saurashtra bank, the date on which the amendments to the saurashtra state banks (amalgamation) ordinance, 1950, take effect under part v of the third schedule;10 of 1950(i) "saurashtra bank" means the state bank of saurashtra constituted under the saurashtra state banks (amalgamation) ordinance, 1950;(k) "subsidiary bank" means any new bank and includes the hyderabad bank and the saurashtra bank;14 (1) the state government of punjab in respect of the bank of patiala, the state government of gujarat in respect of the saurashtra bank and the reserve bank in respect of the hyderabad bank, shall be given, by reason of the provisions of this act or of the amendments contained in part v or part vii of the third schedule, such compensation by the state bank as is determined in accordance with the principles contained in the first schedulecompensation payable by the state bank in respect of the bank of patiala, the saurashtra bank and the hyderabad bank(2) the amount of compensation to be given in accordance with the principles contained in the first schedule shall be determined in the first instance by the state bank, and shall be offered by it to the state government of punjab, the state government of gujarat, or the reserve bank, as the case may be, in full satisfaction of the compensation payable under sub-section (1):provided that in determining the amount of compensation to be offered to the state government of punjab or the state government of gujarat, the state bank shall consult the reserve bank(3) if the amount of compensation offered by the state bank in terms of sub-section (2)is not acceptable to the state government of punjab, the state government of gujarat or the reserve bank, as the case may be, the state government concerned or the reserve bank, may before such date as may be notified by the central government in the official gazette, request the central government to have the matter referred to the tribunal for decision, and where any such request is received, the central government shall refer the matter accordingly(4) if, before the date notified under sub-section (3), the state government of punjab, the state government of gujarat or the reserve bank, as the case may be, has not made any such request, the amount of compensation offered by the state bank, and where a reference has been made to the tribunal, the amount determined by it, shall be the compensation payable under sub-section (1) and shall be final and binding on all parties concerned    chapter v management of subsidiary bankscertain officers to vacate office23 every person holding office as chairman, director, member of the board of management (including a member of a local or advisory committee), managing director, general manager, manager (other than manager of a branch), deputy managing director, deputy general manager, assistant general manager or advisor, as the case may be, in an existing bank (other than the bank of patiala), the hyderabad bank and the saurashtra bank immediately before the appointed day, shall be deemed to have vacated that office on the appointed day, and notwithstanding anything contained in this act or in any other law for the time being in force or in any agreement or contract, such  person shall not be entitled to any compensation for the loss of office or for the premature termination of any agreement or contract, relating to his employment, except such pension, compensation or other benefit as the corresponding new bank, the hyderabad bank or the saurashtra bank, as the case may be, may with the approval of the state bank, grant to him, having regard to what he would have received if this act had not been passed and if his employment had ceased on the appointed day in the ordinary course:provided that nothing in this section shall be deemed to prevent any person who has so vacated his office in any of the said banks, from being re-nominated or re-appointed to any office in a subsidiary bank in accordance with the provisions of this acttemporary provision regarding existing auditors42  if, on the appointed day, any appointment of an auditor made by, or in respect of, an existing bank, the hyderabad bank  or the saurashtra bank, as the case may be, is subsisting, the state bank may, on or after such day, either confirm the appointment in accordance with the provisions of this act, subject to such modifications of the terms and conditions of the appointment, as it may deem necessary, or terminate the appointment; and may, if it so terminates the appointment, fix such remuneration as appears to it to be reasonable having regard to the work already done, functions discharged, or duties performed by the auditor concerned46 (1) the state bank may, in relation to any existing bank or the  saurashtra bank, at any time before the appointed day,—observers for existing banks and the saurashtra bank(a) depute one or more persons to watch the proceedings at any meeting of the board of directors, any committee or other body of the bank; require the bank to give an opportunity to the person or persons so deputed to be heard at such meetings and also require such person or persons to send a report of such proceedings to the state bank;(b) require the board of directors, any committee or other body of the bank to give in writing to any person specified by the state bank in this behalf, at his usual address, all notices of, and other communications relating to, any meeting of the board, committee or other body, as the case may be;(c) appoint one or more persons to observe the manner in which the affairs of the bank or of its officers or branches are being conducted and make a report thereon; and(d) require the bank to furnish the state bank, within such time as may be specified by the state bank, with any statement or information relating to the business or affairs of the bank including copies of the proceedings of any meeting of the board of directors, any committee or other body, of the bank (2) if a person deputed by the state bank to watch the proceedings of any meeting of the board of directors, any committee or other body, as the case may be, gives notice in writing to the bank that such person considers that any action, step or proceeding proposed to be taken or carried out by the bank will be detrimental to the state bank or to the bank itself, such action, step or proceeding shall not be taken or carried out by the bank unless and until the state bank approves in writing of such action, step or proceedingexplanation—for the purposes of this section, "board of directors" in relation to the saurashtra bank, means its board of managementinspection47  (1) without prejudice to the other provisions contained in this act, the state bank may, at any time, cause an inspection to be made by one or more of its officers of any existing bank, a new bank, the hyderabad bank or the saurashtra bankspecial provision regarding existing officers and employees49  (1) notwithstanding anything contained in any of the other provisions of this act, or in any other law or in any contract of service or other document, no appointment made or promotion, increment in salary, pension or allowance or any other benefit granted to any person by an existing bank or the saurashtra bank after the 10th day of february, 1958, and before the appointed day, which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorisations of the said banks or of any provident, pension or other fund in force before the 10th day of february, 1958, shall have effect or be payable or claimable from the subsidiary bank concerned, or from any provident, pension or other fund, or from any authority administering any such fund, unless the state bank has, with the approval of the reserve bank, by a general or special order, confirmed the appointment, promotion or increment or has directed the grant of the pension, allowance or other benefit, as the case may be(2) where any officer or other employee of an existing bank or of the saurashtra bank has received any amount by reason of such appointment, promotion or increment or any such pension, allownace or other benefit as is referred to in sub-section (1), which has not been confirmed or sanctioned by the state bank under that sub-section, such officer or other employee shall be bound to refund such amount to the subsidiary bank concerned, and that bank shall be entitled to take all such steps as may be necessary for recovering such amount(3) where any managing director, general manager or manager, deputy managing director or deputy general manager or other employee of an existing bank or the saurashtra bank has, after the 10th day of february, 1958, and before the appointed day, been paid any sum by way of compensation or gratuity, the subsidiary bank concerned shall be entitled to claim a refund of any sum so paid if the payment is not confirmed by the state bank by a general or special order56 the state bank of patiala and the saurashtra bank shall be entitled to recover in the same manner as an arrear of land revenue any moneys due in respect of loans or advances made before the appointed day by the bank of patiala or the saurashtra bank, as the case may be, and the provisions of any law, relating to such recovery as were applicable to that bank before the appointed day shall continue to apply to the state bank of patiala or the saurashtra bank, as the case may be, in respect of such recovery after the appointed daycontinuance of special provisions respecting recovery of loans and advances made by the bank of patiala and the state bank of saurashtra the first schedule (see sections 13 and 14) principles of compensation1 a the compensation to be given by the state bank shall, in the case of the hyderabad bank, the bank of patiala or the saurashtra bank, be an amount equal to the value of the assets of that bank as on the day immediately before the appointed day, computed in accordance with the provisions of part i of this paragraph less the total amount of liabilities thereof computed in accordance with the provisions of part ii of this paragraph———— a billto repeal the state bank of saurashtra act, 1950 and further to amend the state bank of india (subsidiary banks) act, 1959————(shri pranab mukherjee, minister of finance)gmgipmrnd—4894ls(s5)—27-11-2009