-c(;hhigenljri to \\  ~e a'\"jying laws (iueni:ment) blll, 1983 tl?j19r~~i~~ 1 page ~, "cl9ainst l~ne 4 4r insert the marginal ci~,-2 ( : ·"2',) ijf h~81u i, \ ; -i " " page l~, in the margin~l~ading to proposed ~-~-' \ j!idl "instrunent" ~ 1nstrune1rt$~'· , p a~e 30, line 34,-3 fo t "include" "be· 4 5 6 page 86, lira\:: _;_8, in the marginal he·adin9_io  section 43,-!2l li{ll'"'isiled" ~ 1tfumishe~" 7 t , p age 87,· a':;03inst line 22 insert the margina~ citation,-"5 of 1970" \ 8 page ~'7, ~ns  -:i:l the marginal headingto section 16,-"li-abil ity cf corporation j,n respect of in~ured deposit\" 'i page 90, lin(~ 3,-,ait,li"i " the" ins e rt ii c as~" / \ i  new ~elh:r;  the banking laws (amendment) bill, 1983 arrangement of clauses chapter i preliminary clauses1 short title and commencement  chapl'er ii amendments to the bankers' books evidence act, 18912 amendment of act 18 of 1891  chapter iii amendments to the reserve bank of india act, 19343 amendment of section 17 4 amendment of section 33 5, amendment of section 40 6 amendment of section 42 7 amendment of section 43 8 amendment of section 45h 9 amendment of section 451 p 10 insertion of new chapter after chapter iiib 11 amendment of section 58b 12 amendment of section s8e  chapter ivamendments to the banking regulation act, 1949 13 amendment of section 5 14 amendment of section 7 15 amendment of section 8 16 amendment of section loa 17 amendment of section lob 18 insertion of new section 10bb 19 substitution of new se,ction for section ioc 20 amendment of section 10d 21 substitution of new section for section 18 22 amendment iof sec'tion 19 23 amendment of section 20 24 insertion of new ftection 21a  clauses25 amendment of section 22 26 amendment of section 24 27 amendment of section 29 28 amendment of section 34a 29 amendment of section 35 30 amendment of section 3sb 31 amendment of section 36ab 32 amendment of section 36ad 33 amendment of section 42 34 amendment of section 45 35 amendment of sections 45a and,45j 36 amendment of section 45s 37 insertion of new part iilb 38 amendment of section 46 39 amendment of section 47 40 amendment of section 51 41 amendment of section 52 42 amendment of section 56  chapter v amendments oro the state bank of india act, 195543 insertion of new section 35a 44 amendment of section 40 45  amendment of section 42 46 amendment of section 43 47 amendment of section 49 48 amendment of section 50  ~ chapter viamendmenrs '10 the state bank of india (subsidiary banu) act, 195 49 insertion of new section 36a 50 insertion of new section 38a 51 amendment of section 43 52 amendment ·of section 44 53 amendment of section 53 54 amendment of section 62 55 amendment of section 63  chapter viiamendments to the deposit insurance and credit guaralftu corporation act, ]961 56 amendment of section 2 57 amendment of section 4 58 amendment of section 6 59 amendment of section 11 60 amendment of section 13 61 amendment of section lsa 62 amendment of section 18 63 amendment of section 32 64 amendment of section 50 amendments to the banking companies (acquisinon and transfer of undertakings) acr, 1970 clauses 6l::', amendment of section 3 66 amendment of section 9 67 amendment of section 10 68 insertion of new section 16a 69 amendment of section 19  chapter ixamendments to the regional rural banks act, 1976 70 amendment of section 30 '  chapter xamendments to the banking companies (acquisitron and transfer of undertakings) act, 1980 71 amendment of section 3 72 amendment of section 9 73 amendment of section 10 74 insertion of new section 16a 75 amendment of section 19  the banking laws (amendment) bill, 1983 a billfurther to amend the bclnkers' books evidence act, 1891, the jlae",8 bclnk oj india act, 1934, the banking regulation act, 1949, the stclte bank oj india act 1955, the state blink of in4ia (subidia1'jl banka) - act, 1959, the deposit im-urance and credit guarantee corporatioft act, 1961, the banking companies (acquisition and ttaftbjef' of undertakmgs) act, 1970, the regional rural banks act, 1976 and the banking companies (acquisition and transfer of undertakings) act, 1980 be it enacted by parliament in the thirty-fourth year of the republic of india as follows: -  chapter icommencement 5 1 (1) this act may be called the banking laws (amendment) act, short tiue and 1983   (2) it shall come into force on such date as the central government may by notification in the official gazette, appoint, and di1ferent dates may be appointed for different provisions of this act, and any reference 10 in any provision to the commencement of this act shall be construed as a reference to the coming into force of that provieion  chapter ii ami:ndments 'io 'rm; bankers' books evldenice af:r, 18912 in the batikers' books evidence act, huh,-ameadmentof act 18 of 1891 ,(a) in section 2,-(i) 10!' clause (4), the following clause shall be substituted, 5 namely:-',(4) "legal proceeding" meaos,-_(~) any pl'oceeding or inquiry m which evidence is or may be glvenj (ii)ian arbitrationj and i 10 \ (iii) any investigation or inquiry under the code of cnimmal proceaure, h173, or, under any other law tor 2 of 1974, the time bemg in force for thecollectlon of evidence, conducted by a pollce officer or by any other person (not being a magistrate) authorised in this bebal1 by a 15 , maglstrate or by any law for the time being in forcej'j (ii) in clause (8),'for the words "such certificate beid& dated and subscribed by the principal accountant or manager 01 the bank with his name and officla! tiue", the followmg shall be substituted, namely: -2(\ "and where the copy was qbtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the bank's b'usiness after 25 the date on which the copy had been so prepared, a lwther certificate to that eifcct, each such certiticate being dated and subscribed by the principal accountant or manager 01 the bank with his name and official title"; 30 ,( b) after section 7,· the following section shall be inserted,  namely:-'s in the application of sections 5, 6 and 7 to any investigation or inquiry referred to in sub-clause (iii) of clause (4) of section 2, the order of a court or a judge referred to in the laid 35 sections shall be construed as referring to an order made by an· officer of a rank not lower than the rank of a superintendent of police as may be specified in this behalf by the appropriate government | order     ||-----------|| court     || to        || be        || constru-  || ed        || to        || be        || order    || made      || by        || specifted || officer~  |explanation,-bi this section, "appropriate government" 40 means the government by which the police officer or any other person conducting the investigation or inquiry is employed'  chapter iii amendments to the reseave bam( of india act, 1934amendmentof section 17 :j, in section 17 of· the reserve bank of india act, 1934 (hereafter 2 f 193" in this c,hapter referred to as the reserve bank act), in clause (4b), ~ 45 0  , the prov1so, for the words "three crores of rupees", the words "fifteen ' crores of rupees" shall be substituted 4 in section 33 of the re&erve bank act, ill sub-clause (a) of clause amend-(i) of sub-section (6), for the word "notified", the word j'approved" shall ment of be wbstituted section 31 \ 5 in section 40 of the reserve bank act, in ihe explangtfon for the amend-7 of 1947 5 worde and figures "foreign exchan'ge' regulation act, 1947", the words :~!:f 46 o~ 1973 find flgures "~'oreigri exchange regulation act, 1973" shall be substituted 40 6 in section 42 of the reserve bank act,-(a) in the explanation 'to sub-section (1),-amendment ot section 42 i; (i) in clause (a), for the words "of a week", the words "of a 10 fortnight" shall be substituted:  (li) for clause (b), the following clause shall be substituted, namely:-- (b) "fortnight" shall mean the period from saturday to the second following friday, both days inclusive;'; (iii) in clause (e) ,-26 of 1982 :olo (a) in sub-clause (iii), after the words ''state government", the words and flgures "or from the national cooperative development corporation established under the nationai' co-operative development corporation act, 1962" shall be inserted; (b) after sub-clause (iv) , the following sub-clause shall be inserted, namely:-"(t,') in the case of a rejtional rur~l bank also any - loan taken by such bank from its sponsor bank;"; ~5 (it,) in clause (d) ' after sub-clause (m), the following subclause shall he inserted, namely:-ii (iiia) a cnrrespondin/! new bank constituted bv !':ection 3 of the bankin/! companies (acquisition and transfer ,,f undertakings) act 1980;"; '40 of 1980 30 tv) in clause (e) after sub-clause (iii), the followin~ subclause shall be in~ertf'cf, namely:-ci (iiia) a corresponding new bank constituted bv sectfon 3 of the banki~ companies (acquisition and transfer of unctertakir/gs), act, 1980;~': 40 of 1980 35 (b) to sub-section (7,4'), the following proviso shall be added, namely:-: ' "provided that thp bank may by a separate notffication in the gazette of india specify different dates in respect of a bank subseauently included in the second schedule"; (c) after sub:'section (lb) the following sub-section shall be inserted,namely: -'-"(lc) the bank may, for the purposes of this section, spf!cify from time to time with reference to any transaction or class of transactions that such transaction or transactions shall 5 be regarded as liability in india of a scheduled bank, and jf any question arises as to whether any transaction or elas!; of transactions shall be regarded, for the purposes of this section, as liability in india of a scheduled bank the decision of the b:mk thereon shall be final"; 10 (d) in sub-section (2) ,-(i) for the words "at the close of husiness on each friday, and every such return shall be sent not later than five days after the date to which it relates" the words "at the close of business on each alternate friday, and every ~ch return shall 15 be sent not later than sev,en days after the date to which it relates" ~hall be substituted; '~'-(ii) in the second proviso, after the words "provided further that where" the' words "such alternate" shall be inserted; (iii) for the third proviso, the following proviso shall be 20 substituted namely:-"provided also th~t where the bank is satisfied that the fumishinrt of a fortnightly return under thi'l sub-section is imp1'8ctit':tblp in the case of any sched'llled bank by reason of the geoa-ranhical position of the bank and its branches the 25 bank may allow such bank-(i) to furnish a nrovisional return for the fortnillht within the eriod aforesaid to be followed by a anal return not later than twenty days after the date to which it relates, or 3 , (ii) to furnish in lieu of a fortni~htlv return a monthly return to be sent not later than twf'ntv days after the end of the month to which it relates givin~ the detans specified in this ~ub-section in r(>\l;pect of such bank at the -close of business for the month": 35 (e) after sub-section (2), the following sub-section shall be inserted, namely:-" (2a) where the last friday of a month is not an alternate friday for the purpose of sub-section (2), every scheduled bank shall send to the bank, a special return giving the details specified 40 in sub-section (2) as at the close of business on such last priday or where such last friday is a public holiday under the negotiable instruments act, 1881 as at the close of business on the preceding working day and such return ' shall be sent not later than seven days after the date to which it relates"; 45 (f) in sub-sections (3) and (3a), for the word "week" wherever it occurs,' the word "fortnight" shall be substituted '7 in section 43 of the reserve bank, act, for the wor4 "week", the word "fortnight" shall be substituted amenilmentof ectlon o amendmentof ection 45h r in section 45h of the reserve bank act, for the words and figures "a banking institution'notified 'under section 51 of that act", the words, 5 brackets, letters and figures "a corresppnding new bank as defined in clause (da) of section 5 of that act or a subsidiary bank as defined in 38 of 1959 the state bank of india (subsidiary banks) act, 1959" shall be substituted 9 in sec~ion 451 of the reserve bank act,-10 amendment of section 451 - (i) for clause (bb), the following clause shall be substituted,  ,namely:-'(bb) "deposit" incl'udes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form, but does not include,-(i) amounts raised by way of share capital; 15 (ii) amounts contrib~ted as capital by partners of,· a firm; (iii) amounts received from a 'scheduled bank or a cooperative bank or any other banking company as defined in clause (e) of section 5 of the banking regulati9n act, 1949; loot 1949 20 (iv) any amount received from,-(a) the development bank, (b) a state financial corporation, (c) any financial institution specified in or under section 6a of the industrial development bank of india act, 1964, or 18 of 1964 (d) any other institution that may be specified by the bank in this behalf; (v) amounts receive<l in the ordinary course of business, by way of-i (a) security deposit, (b) dealership deposit, (c) earnest money, or '(d) advance against orders for goods, properties or services;   - (vi) any amount received from an individual or a flrm or an association of indivictaals not being a body corporate, registered under any enactment relating to money lending which is for the time being in force in any state; and  (vii) any adlouiit received by way of subscriptions in 5 respect of a chit explanation 1--"chit" has the meaning assigned to it in cla~e (b) of section 2 ot the chit funds act 1982 40 of 1982 explanation ii-any credit give~ by a sauer to a buyer on the sale of any property (whether movable or 10 immovable) shall not be deemed to be deposit for the purposes of thh; clause;'; (ii) in clause (d), the words h, of which the capital subscribed by its partners exceeds one lakh of rupees" shall be omitted; (iii) in clause (e), for the words ", co-operative society or ftrm", 15 the words "or co-operative society" shall be substituted 10 after cbapter ilib of the reserve bank act, the followin, chapter shall be inserted, namely:-insertion of new chapter after chapter iii b  "chapter nlc prohibition of acceptance of deposn'b by unincobpoiiatid iiodjib sic)interpretation - 45r the words and expressioll8 used in this chapter and delnecl in chapter iiib shall have the jj)eailings respectively assigned to them therein    451s (1) no person, being an individual or a firm or an unincorporated associa~on~f individuals shall, at~y time, have depo8lta from 15 more tban the number of depositors speclfted against each, in the table below:-dt/posits not to be accepted in certain cases (i) individual (ii) firm not more than ten d~positora   not more than ten depoaltors per so partqer ~ not more than ode hundred depositors in all (iii) unincorporated association of individuals > f not more than ten depoeltora per individual and not more than one hundred depositors in all (2) where at the commencement of section 10 of the banking laws (amendment) act, 1983, the deposits held by any such person are dot in accordance with sub-section (1) he shall before the expiry of a' 'period' of two years from the date of such commencement, repay 5 such of the deposfts:as are necessary for bringing the number of depositors within the relative limits specified in that sub-section   :  ~   explanaticn-for the purposes of this section,-(a) where a deposit has been made by two or more persons, it shall be deemed to have been made by as many depositors as 10 there are n'umber of person~ making such deposit; " (b) a person in whose favour a credit balance is outstanding for a period not ex<:ee<iing six months in any account relating to mutual dealings in the ordinary course of trade or business shah not, on account of such balance alone be deemed to be 15 a depositor 2 of 1974  power to issue search warrants 20 45t (1) any court having jurisdiction to issue a search warrant lljlder the code of criminal procedure, 1973 may, on an application by an oflicer of the bank or of the state government authorised in this behalf stating his belief that certain documents relating to 'acceptance of deposits in contravention of the provisions of section 45s are secreted in any place within the local limits of the jurisdicti9,n of sllch court, issue a warrant to search for such documents 2 of 197 • 115 (2) a warrant issued under sub-section (1) shall be executed ,in the same manner and shall have the same effect as a search warrant issued under the code of criminal procedure, 1973" 11 in section 58b of the reserve bank act, after sub-section (5), the following sub-sections shall ,be inserted, namely:-amendmentof section 58b "(5a) if any person contravenes any provision of section 455, he sball be p'unishable with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of deposit received by such person in contravention of that sectjon, or two thousand rupees, whichever is more, or with both: ' ,  '  \ provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court the 'imprisonment shan not be less than' one ~ear and the fine shall not beie:;s than one thousand rupees 2 of 197 •• (,jb) notwithstanding anything contained in section 29 'of the cooe of "criminal procedure 1973, it shall be lawful for a metropolitan magistrate 'or a judicill magistrate of the first class to impose a "lienumee"ot f\ne in excess oltlie limit apccifted in t1nlt section on any person convicted under sub-section (sa) " 12 in section 58e of the reserve bank act, to sub-section (1), the f~llowing pr~iso'l;hall bea~d~ :~ameiy:-amendmentof section sse ""provided that in respect of ally offence punishable under sub- section (5a) of section 58b, 8 complaint in writing may also be made by an ofticer of"the state "government, generally or specially authorised in writing in this behalf by 't~at gov~rnment"  chapteriv amendments to the banking regulation act, 1&4913 in section 5 of the banking regulation act, 1949 (hereafter in this 10 of 1049 chapter referred to as  the banking regulation act),-amendmento! section e (ii) for clause (ii), the following clause shall be substituted,' 5 namely:-'(a) "approved securities" means-, - (i) securities in which a trustee may invest money under clause (a), clause (b), clause (bb) , clause (c) or clause (d) of section 20 of the indian trusts act, 1882; 10 20fl882 (ii) such of the securities authorised by the central government under clause· (f) of section 20 of the indian trusts act, 1882, as may be prescribed;'; 20fl882 (b) after clause (d), the following clause shall be inserted, namely:-15 , (da) "corresponding new bank" means a corresponding new bank constituted under ~ection 3 of the banking companies' (acquisition and transfer of undertakings) act, 1970, or under 5 of 1970 section 3 of the banking companie~ (acquisition andtransfer of undertakings) act, 1980;'; 20 40 of 1980   ,,,1 (c) after clause <1j), the following clauses shall be 'serted, namely:-i :   '(jja) "development bank" il)eans the industrial &vetopment bank of india established under section 3 of the industrial development bank of india act, 1964; 25 18 of 1984 (ffb) "exim bank" means the export~import bank of india established under section 3 of the export-import bank of· india act, 1981;';  28 of 1981 (d) for clause (1), the following clause shall  be substituted, namely:-30 '(l) "reserve bank" means the reserve bank of india constituted under section 3 of the reserve bank of india act, 1934;'; 2 of 1934 i (e) clause (nb) and clause (nc) shall be re-lettered as clause (nd) and clause (ne), respectively, al'ld before clause (nd) as 80 35 re-iettered, the following clauses shall be inserted, name11:-'(nb) "sponsor bank" has ihe meaning assigned to iltn the regional rural banks act, 1976; 21 at 1978 (nc) "state bank of india" means the state· bank of india cons~itute,d under section 3 of t~e state bank of ,india act, 1955;' 40 23 of 19bb 14 in secti~~ 7 of the banking regulation ac~, in, sub-section (1),  after the words shall use as part of i~ name", the word~ "or in connection with its business" shall be inserted  15 in section 8 of the banking regulation act, for the proviso, the following proviso shall be substituted, namely:-| amend    ||----------|| mentqf   || section  || 8       |"provided that this section shall not apply to any such business ~s is specified in pursuance of clause (0) of sub-section (1) of section 6" 5 j6 in section loa of the banking regulation act, after sub-section amend-(2), the following sub-section shall be inserted, namely: _ ment of section "(2a) notwithstanding anything to the contrary contained in loa t of 19s8 the companies act, 1956, or in any other law for the time being in 10 force,-(i) no director of a banking company, other than its chair->' man or w~ole-time director, by whatever name called, shall hold office continuously for a period exceeding eight years; (ii) a chairman or other whole-time director of a banking 15 company who has been removed from office as such ~hairman, or whole-ti'1le director, as the case may be, under the provisions or this act shall also cease to be a director of the banking company and shall also not be eligible to be appointed as a director of such banking company, whether by election or co-option or lio otherwise, for a period of four years from the date of his ceasing to be the chairman or whole-time director, as the case may be" 17 in section lob of the banki~g regulation act,-amendmentol 25 (a) in sub-section (1), for the words "shall have a chairman of section its board of directors", the words "shall have one of its directors as lob chairman of its board of directors" shall be substituted; (b) in sub-section (5), the words "but shall continue in office until his successor assumes office" shall be omitted; (c) after sub-section (5), the following sub-section shall be 30 inserted, namely:-"(5a) a chalrman of the board of directors whose term of office has come to an end, either by reason of his resignation or by reason of expiry of the period of his office, shall, subject to the approval of the reserve bank, continue in office until his succes-35 sor assumes office" 18 after section lob of the banking regulation act, the following section shall be inserted, namely:-insertion of new section lobb "lobb (1) where the office of the chainnan of a banking com-power of pany is vacant, the reserve bank may, if it is of opinion that the rcst'rve bank to continuation of such vacancy is likely to adversely aft'ect the appoint chairman of a bankin, company interests of the banking company, appoint a person, eugi1;»le ,udder sub-section (4) of section lob to be so appointed, to be tbe c:balnnan of the banking company and where the person so appointed is not a director of such banking ~ompany, he shall, so long as be bolds the office of the chairman, be deemed to be a director of the banking 5  company (2) the chairman so appointed by the reserve bank mul be in the whole-time elqployment of the banking company and shall bold office for such period not exceeding three years, as the reserve bank may specify, but shall, subject to other provitdons of this act, 10 be eligible for reappointment (3) the chairman s appointed by the reserve bank shall draw from the banking company s'uch pay and allowances as the  reserve bank may determine and may be removed from office only by the reserve bank  (4) save as otherwise provide~ in this section, the provisions of section lob shall, as far as may be, apply to the ch61rman appointed by the reserve bank under sub-section "(1) as they apply to a chairman appointed by the banking company" 19 for section toe of the banking regulation act, the following 20 section shall be substituted, namely:-substitution of new section for section loco "loe a chairman of a banking company, (by whomsoever appointed) and, a director of· a banking company (appointed by the reserve bank under section loa) shall not be required to bold qualification shares in the banking company" chairman and certain directors not to be required to hold qualification shares 20 in section ion of the banking regulation ad, after the words, figures and letters "in pursuance' of section loa or section lob" the words figures and letters "or section lobb" shall be inserted amendment of section 10n 21 for section 18 of the banking regulation act, the following see- substttion shall be substituted, namely:-tution ot new section tor section 18 5 10 '18 (1) every banking company, not being a scheduled bank, cash reshall maintain in india by way of cash reserve with itself or by way serve of balance in a current account with the reserve bank, or by way of net balance· in current accounts or in one or more of the aforesaid ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in india as on the last friday of the second preceding fortnight and shall submit to the reserve bank before the twentieth day of every month a return showing the amount s9 held on alternate fridays during a month with particulars of its demand and time liabilities in india on such fridays or if any such· friday is a public holiday under the negotiable instnunents act, 1881, at the close of business on the preceding working day 260t 1881 15 explanation-in this section, and in section 24,-(a) "liabilities in ¥1dia" shall not include-(i) the paid-up capital or the reserves or any credit balance in the profit and loss account of the banking company; (ii) any advance taken from the reserve bank or from the development bank or from the exim bank or from the national bank by the banking company; (iii) in the case of a regional rural bank, also any loan taken by such bank from its sponsor bank; (b) "fortnight" shall mean the period from saturday to the second following friday, both days inclusive; ~o (c) "net balance in current acco'ullts" shall, in relation to a banking company, mean the excess, if any, of the aggregate of the credit balances in current account maintained by that banking company with the state bank of india or a subsidiary bank or a corresponding new bank 'over the aggregate of the credit balances in current account held by the said banks with such banking company; (d) for the purposes of computation of liabilities, the aggregate of the liabilities of a banking company to the state bank of india, a subsidiary bank, a correspondin~ new bank, a regional rural bank, another banking company, a co-operative bank or any other financial institution notified by the central government in this behalf, shall be reduced by the aggregate of the liabilities of all such banks and institutions to the banking company; (e) the expression "co-operative bank" shall have the meaning assigned to it in clause (cci) of section 56 (2) the reserve bank may, for the purposes of this section and section 24, specify from time to time, with reference to any transaction or claoss of transactions, that such transaction or transactions shall be regarded as liability in india of a banking company and, if any question arises as to whether any transaction or class of trans-5 action!:; shall ~ regarded for the purposes of this section and section 24 as liability in india of a banking company, the decision of the reserve bank thereon shall be final' amendmentof section 19-22 in section 19 of the banking regulation act, for sub-section (1), the following sub-section shall be s'ilbstituted, namely: -10   (1) a banking company shall not form any subsidiary company except a subsidiary company formed for one or more of the following purposes, namely:-(a) the undertaking of any business which, under ·c1auses (4) to (0) of sub-section (1) of section 6, is permissible for a 1 5 banking company to undertake, or -(b) with the previous permission in writing of the reserve bank, the carrying on of the business of banking exclusively outside india, or  (c) the undertaking of such other business, which the 20 reserve bank may, with the prior approval of the central government, consider to be conducive to the spread of banking in india or to be otherwise useful or necessary in the public interest explanation-for the purposes of section 8, a banking company 2 5 shall not be deemed, by reason of its forming or having a subsidiary company, to be engaged indirectly in the bushiess carried on by such - , subsidiary company" 23 in section 20 of the banking regulation act, in sub-eection (1) in clause (b), in mtb-c1ause (iii) j after the words "of which" the words 30 -, ", or the subsidiary or the holding company of which" shall be inserted amendmentof section 20 24 after section 21 of the banking regulation act, the following'-section shall be inserted, namely:-insertioft of newlection 21a "21a notwithstanding anything contained in the usurious loans act, 1918, or any other law relating to indebtedness in force in any 35 10otl9i8 state, a transaction between a banking company and its debtor shall not be reopened by any caurt on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive" rates of interest chari· ed by b;nking companies notte» be 8ub-,ed to 8crutin7 i»7courtl (i) in sub-section (3),-amendment of section 22 (a) in the opening portion, the words "all or any of" shall be omitted; 5  (b) for clause (c) , the following clauses shall be substituted, - namely:- (e) that the general character of the proposed management of the company will not b~ prejudicial to the public interest or the interest of its depositors; 10 (d) that the company has adequate capital structure and earning prospects; (e) that the public interest will be served by the grant of a licence to the coplpany to carry on banking business in india; 20 <f) that having regard to the banking facilities available in the proposed principal area of operations of the company, the potential sc2pe for expansion of banks already in existence in the area and other relevant cactors the grant of the licence would not be prejudicial to the operation and consolidation of the banking system consistent with monetary stability and economic growth; (g) any other condition the fulfilment of which would, in the opinion of the reserve bank, be necessary to ensure that the carrying on of banking business in india by the company will not be prejudicial to the public interest  or the interests of the depositors"; (ii) after sub-section (,1), the following sub-section shall be insetted, name~:-35 "(3a) before granting any licence under this sec'tion to a company incorporated outside india; the reserve bank may require to be satisfied by an'inspection of the books of the company or otherwise that the conditions specified in sub-section (3) are fulfilled and that the carrying on of banking business by such company in indid will be in the public interest and that the government or law of the country irt 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 lnflin" (hi) in sub-section (4) in clause (iii), after the word brackets and figure "sub-section (3)", the words, bra('k(!t~,c'ngnrr and letter flp~d sqb-section '(3a)" shalj be $nserted 26 in section 24 of the banking regulation act,-amendlilent of section 14 (4) in sub-section (1) , for the words "time and demand liabfllties", the words "demand and time liabilities" shall be substitutedj (b) in sub-section (za) ,-(i) in clause (a) for the words and figures "shall maintain 5 in india in cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than 25 per cent of the total of its demand and time liabilities in india", the following shall be substituted, namely:- 10 "shall maintain in india,-(a) in cash, or , (b) in gold valued at a price not exceeding the current market price or in unencumbered approved securities valued at a price determined in accordance with such '5 one or more of, or combination of, the following methods of valuation, namely, vahlation with reference to cost price, market price, book value, as may be specified by the reserve bank from time to time, an amount which shall not, at the close of business on any ~o day, be less than twenty-five per cent or such other percentage not exceeding forty per cent as the reserve bank may, from time to time, by notification in the official gazette, specify, of the total of its demand and time liabilities in indiil, as on the last friday of the second preceding fortnight"; (ii) for clause (b) the following clause shall be substituted, namely:-  (b) in computing the amount for the purposes of clause (4),-(i) the deposit required under sub-section (2) of 30 section 11 to be m~ with the reserve bank by a banking company incorporated outside india'  , (ii) any cash or balances maintained in indln by a banking company other than a rchedu}t'd bank with itself or with the re3erve bank or by way of net balnl1c'r! ~ ,  in current account in exce~9 of the aggregate of the cash 3:) or balance, or net balance rpquil'f'd to be maintained lpl_ section 18i    (iii) any balances maintained by a schechlled bank with the reserve bank in excess of the balance required to be u18intaincd by it wlder scction 42 of the reserve bank of lndia act, 1934; 20f 1934 5 (iv) the net balance in current accounts maintained in india by a scheduled bank; (v) any balances maintained by a regional rural bank in call or fixed deposit with its sponsor bank, sbll be deemed to be cash maintained in india"; 10 ! (ioii) the following explanation shall be inserted at the end, namely:- _  ,   "explanat-ion-for the purpose of clause (0) of this sub-section, the market pt'ice of an approved secl'fity shall be the pnce as on the ctate of the issue of the notitication or as 011 any earlier or later date as may be notified from time to time by the reserve bank in respect of any class or classes of securities"; (c) in sub-section (2b) j the words and figures "established under section 3"of the l:tegional rural hanks act, 1970" shall be omitted; 21 of 1976 20 (d) for sub-section (3), the following sub-sections shall be substituted, namely:-'(3) for the purpose of ensuring compliance with the provisions ot this section, every bank1ng company shall, not later than twenty aays atter the end of the montn to wbich it relate1:;, funush tolhe heserve bank m the prescribed form and manner a monthly return showing particulan of its assets maintained in accordance with this sec~oil, and its demand and time liabilities in l:ndia at tbe close of business on each alternate b'riday during the month, or if any sucb friday is a public holiday, at the close of business on the preceding working day: provided that every regional rural bank shall also furnish a copy of the said return to the national bank 35 (4) (a) if on any alternate ]'riday or, if such friday is a pubhc holiday, on the preceding working day, the amount maintained by a banking company' at the close of business on that day falls b,low the minimum prescribed by or under clause (a) of sub-section (2a), such banking company shall be liable to pay to the reserve bank in respect of that day's default, penal interest for that day at the rate· of three per cent per annum above the bank rate on the amount by which the amount actually maintained falls short of the prescribed minimum on that day; and (b) if the default occurs again 011 the next succeeding alternate· friday, or, if such friday is a pubuc holiday, on the preceding working day, and continues on succeeding alternate fridays or preceding working, days, as the case may be, the rate of penal interest shall be increased to a rate of five pr cent per 5 annum above the bank rate on each such shortfall in respect of that alternate friday and each succeeding alternate friday or preceding working day, if such friday is a pubuc holiday, on which the default continues (5) (a) without prejudice to the provisions of sub-section jo (3), the reserve bank may require a banking company to furnish to it a return in the form and manner specified by it showing particulars of its assets maintained in accordance with this section and its demand ~d time liabilities in india, as at the clm:e of business on each day of a month; and 15 (b) without prejudice to the provisions of b"ub-secfion (4), on the failure of a banking company to maintain as on any day, the amount so required to be· maintained by or under clause (4) of sub-section (2a) the reserve bank may in respect of such default, requir~ the banking company to pay penal interest for 110 that day as provided in clause (a) of sub-section (4) and if the default continues on the next s'ucceeding working day the penal interest may be increased as provided in clause (b) of sub-section (4) for the concerned days (6) (~) the penalty payable under sub-section (4) and sub-25 section (5) shall be paid within a period of fourteen days from the date on which a notice issued by the reserve bank demanding payment of the same is served on the banking company and in the event of failure of the banking company to pay the s~me within such period, the penalty may be levied by a direc- 30 bon of the principal civil court having jurisdiction in the area where an ~ftice 'bf the defaulting banking company is situated, such direction to be made only upon an application made by the reserve banlt in this behalf to the court j and (~) when the cour~ makes a direction under clause (4) it ~all issue a certificate specifying the sum payable by the~ 35 mg company and every such certificate shall be enforceable in the same manner as if it were a decree made by the court i ~t na (7) when under the provisions of clause (b) f b t' (4) penal interest at the increased rate of fiv 0 su -sec ion 40 the bank t h b e per cent above ra e as ecome payable by a banki thereafter the amount required t b  ng company, if sue d' it 0 e mamtamed on the next th~ ~e~~gp:e::;i~~ ~~~~~gord~y~uj~~ ~~d?elis a r:blic h()!i~y, mirumum, every director ma ow e prescnbed company wh  k ' nager or secretary of the banking 45 shall be puni~h~~len~;~g~~e a~~wilfully a party to the default, rupees and with ~ furth fi l~h may extend to five hundred  er ne which may extend to ftv hund d rupees for each subsequent alternate frida th e re working day, as the case may be, on which t:e ::fau~t ~=: 5° 5 (8) notwithstanding anything· contained in this section, if tbe reserve bank is satisfied, un an application ill writing by the defaulting banking company that the banking company had sufficlent cause for its failure to comply with the provisions of clause (a) of sub-section (2a) , the reserve bank may not demand the payment of the penal interest 'expzanation-in this section, the expression "public holiday" m~ans a day which is a public holiday under the negotiable instruments act, 1881' 26 of 1881 (3), the following sub-osection shall be inserted, namely:-10 27 in secticjn 29 of the banking regulation act, after sub-section amendmentaf section 29 "(3a) notwithstanding anything to the contrary contaihed in 1 of 1956 sub-~tion (3) of section 210 of the companies act, 1956, the period to which the profit and loss account relates shall, in the case of a banking company, be the period ending with the last working day of the y'car immediately preceding the year in which th: annual general meeting is held" 28 in section 34a of the banking regulation act, for sub~section (3), the following sub-section shall be substituted, namely:-amendmental section 34a  20  ' (3, for the purposes of this section "banking company" includes the reserve bank, the development bfulk, the exim bank, the national bank, the state bank of india, a corresponding new bank, a regional rural bank and a subsidiary bank' 29 in section 35 of the banking regulation act,-amendmpntof (i) after sub-section (1), the following sub~section shall be section 35 inserted and shall be creemed to have always been so inserted, namely:-"(la) (a) notwithstanding anything to the contrary con:' tained in any law for the time being in force and without prejudice to the provisions of sub~section (1), the reserve bank, at any time, may also cause a scrutiny to be made by anyone or more of its officers, of the affairs of ally banking company and its books and accounts; and 35 (b) a copy of the report "of the scrutiny shall be furnished to the banking company if the banking company makes a request for the same or if any adverse action is contemplated against the banking company on the basi:; of the scrutiny,"; (ii) in sub-section (2), after the words, brackets and figure "any officer making an inspection under sub-section (1) ", the words, brackets, figure and letter "or a scrutiny under s'ub-section (la) " shall be inserted; (iii) ill sub-section (3), after the words, brackets and figure "inspection' under sub~section (1) ", the words, brackets, figure and letter "or a scrutiny under sub "'section (ia)" shall be inserted; (iv) in sub-~ction (4), after the words "on any inspection", the words "or scrutiny" shall be inserted amendmentol section 3sb (i) in sub~scc1ioll (1), in clause (a), alter tho wurds "ally provision relating to", the words "the maximum permissible numocr of directors or" shall be inserted; (ii) in sub-section (2) for the words and figures "provisions of 5 sections 310", the words and figures "provisions of sedions 269, 310" shall be substituted; (iii) after sub-section (2), the following sub-section shall be inserted, namely:-1 of 1956  (2a) nothing contained in section 198 of the companies 10 act, 1956 shall apply to a banking company and the provisions of sub-section (1) of section 309 and of section 387 of that act shall, insofar as they are applicable to a banking company, have effect as if no reference had been made in the said }frovisions to section 198 of that act" 15 31 in section 36ab of the banking regulation act, in sub-sectiod (1), the proviso shall be omitted amendmento'f section 36ab 32 in section 36ad of the banking regulation act, for sub-section (3), the following sub-section shall be substituted, namely:-amendmentol section 36ad - (3) for the purposes of this section "banking company" includes !lo the reserve bank, the development bank, the exim bank, the national bank, the state bank of india, a corresponding new bank, a regional rural bank and a subsidiary bank' amendmentof section 42 (i) for the words and figures "sections 460, 464 and 465", the 25 word and f~gures "section 460" shall be substituted; and (ii) the words "or with the appointment of a committee of inspection" shall be omitted ,(a) in sub-section (5) in clause (i),-amendmentor aection45 (i) in the first proviso, for the words "as are applicable", in the two places ·where they occm', the words "as are, at the time of such payment or grant, applicable" shall be substituted; (ii) in the second proviso, for the words "the doubt or diiierence shall be referred", the words "the doubt or difference shall be referred, before the expiry of a period of three years 35 from the date of the payment or grant mentioned in that clause," shall be substit'uted; (b) in sub-section (8), the following shall be inserted at the end, namely:-"including the trustees or other persons managing, or connected ld any other manner with, any provident fund or other fund maintained by any of those companies or the transferee bank'" i (c) in sub-section (9), for the words "on and from such date as tnay be specified by the central government in this behalf", the words "on and from the date of the corning into operation of, or as the case mily be, the date specified in this behalf in, the scheme" 5 shall be substituted; (d) in sub-section (15), for the words and figures "any other banking institution notified by the central government under section 51", the words "a subsidiary bank, or a corresponding new bank" shall be substituted; 10 (t') the following e:t-p7anation shall be insl'rted at the end, namely:-t<explanation--references in this section to the terms and conditions of service as applicable to an employee shall not be con·;trued 3s extending to the rank and status of sllch employee" 5 of 1898 2 of 1974 amendment of sections 45aand 45j is 35 in sections 45a and 45j of the banking regulation act, for the words and figures "code of criminal procedure 1898", wherever they occur, the words and figures "code of criminal procedure, 1973" shall be substituted and in sub-section (5) of the said section 45j, the \'1rords "and all such trials shall be without the aid of a jury" shall be omitted amendment ot section 458 20 36 in section 455 of the banking regulation act, for the words "chief presidency magistrate or the district magistrate", wherever they occur, the words "chief metropolitan magistrate or the chief judicial magistrate" shall be substituted 37 after section 450x of the banking regulation act, the following insertion 25 part shall be inserted, namely: -of new partliib  "part um provisions relating to certain operations of banking colvipanles45y the central government may, after consultation with the reserve bank and by notification in the official gazette, make rules specifying the periods for which-(a) a banking company shall preserve its books, acc<?unts and other documents; and power of central governmentto make rules for the (b) a banking company shall preserve and keep with itself ~~~;vaditrorent instruments paid by it records 35 return of paid instrument to customer& 4~·z (1) where a banking company is required by its customer to return to him n pnidinstrument before the expiry of the period specified by rules mnde under section 45y, the· banking company shnll not return thl' instrum('nt ("x('cpt after making and keeping in its possession a true copy of all relevant p~n·ts of such instrument, such copy being mac'le hy n mc>eh:micnl or ot'!1cr process which in  itself en':lures the arcurncy of the copy (2) th~ banking eompnny f,hall he entitled to recovc'r from the customer the cost ot making such copies of the im:trnmf'nt explanation-in this section, "cl1!;tomer" includes a gove'rn-45 ment department and ~ corporation incorporflted by ot' '(lnder any !fomlnation for payment of de positors' money 45za (1) where a deposit is held by a banking company to the credit of one or more person's, the depositor or, as the case may be, all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be 5 returned by the bunking company (2) notwithst~nding anything contained in any other l~w for the time bf;!ing in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made in the prescribed manner purpor1s to confer on any person the right 10 to receive the amount of deposit from the banking company the nominee shah, on the death of the sale depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors in relation to such deposit to the exclusion of all other persons, i~ unless the nomination is varied or cancelled in the prescribed manner (3) where the nominee is a minor, it shall be lawful for the depositor making the nomin-ation to appoint in the prescribed manner any person to receive the amount of deposit in the event of his death :10 during the minority of the nominee (4) payment by a banking company in accordance with the provisions of this section shall constitute a full discharge to the banking company or its liability in respect of the deposit: provided that nothing contained in this sub-sec~on shall affect 25 the right or claim wliich any person may have against the person to whom any payment is made under this sectlon 45zb no notice ()f the claim of arw person, other than the person or persons in whose name a deposit is held by a banking company, 'shall be receivable by the banking company, nor shall the 30 banking company be bound by any such notice e·ven tho'ugh expressly given to it: notice of claim;; of other persons regarding deposits not receivable provided that where any decree order, certificate or other authority from a court of c~mpetent judsdiction relating to such deposit is produced before a banking company, the banking company 35 shall take due note of such decree, order, certificate or other authority ' ,  ' -, ·71 ,, 45zc (l) where any person leaves any article in safe custody with a banking company, such person may nominate, in the prescribed manner, one person to whom, in the event of t~ death of 40 the person leaving the article in safe cl1stody, such article may be returned by the h'nnking company nominationfor return of articles kept in safe custody with banking company (2) where thf' nominee is :1 minor, it shall be lawful for the person making the nomination to appoint in the prescribed manner any per~on to rec<'ive the article deposited in the event of his death 45 durmg t:1e minofjty of the nominee  ·(3) the banking company shall, before returning any artirlps ujlder this ~ection to the nominee qr the per~ appointed ul1~~r suimiect10n (2), prepare in such manner as may be cu:rect:ed by' the reserve bank from time to time an mventory of the said articles which shall be signed by such nemmee or person and sha1l deitver a copy of the inventory so prepared to such nominee or peracm 5 '(4) notwithstanding anything contained in any other law for the time being in force or in any disposition whether testamentary or otherwise, in respect of s'ilch article, where a nomination made in the prescribed manner purports to confer on any person the right, to receive the article from the banking company, the nominee shall, 10 on the death of the person leaving the article in safe custody, _ome entitled to the return of the article to the exclusion of au other persons, unless the nomination is varied or cancelled in the prescribed manner: provi'ded that nothing contained in this section shall affect the 15 right or claim which any person may have against the person to whom the article is returned in pursuance of this sub-section 45zd no notice of the claim of any perron, other than the penmn noti~e of or persons in whose name any article is held by a banking company - claims of in safe custody, shall be receivable by the banking company, nor shall other 20 the banking -company be bound by any such notice even thougli = expressly ~ven to it: articleii notreeelv provided that where any decree, order, certfftcate or other able authority from a court of competent' jurisdiction relating to such article fs produced before a banking company, the banking company 25 shad take due note of such decree order, certificate or other authority releaseot contedti of aafety locken 30 45ze (1) where an individual is the sole hirer of a locker from a banking company, whether such locker i~ located in th~ safe deposit vault of such banking company 01' elsewhere, such individual may nominate one person to whom in the event of the death of such individual the banking company ma~r give :'i('ces!'! to the lockfr and liberty to remove the contents of ~he locker (2) where any sucn locker is hired from 'a bankfnf! company bytwo or more 'ndividuals jointly, :md unner thp contract of hire the locker is to be operated  under the joint ,;i~atures of two or more of such hirers, ~ch hirel"s mav nomin~te one or more persons to whom, in the event of the death of such joint hirer or hirers, the banking company mav $ve iointly with the 5lrrviving joint h'!rer or foint hirers, as the ('else may be, access to the locker and liberty to remove the contents of :;;uch locker 40 (3) every nomination under sub-section "(i) or sub·sectinn (2) sliall be made in the' prescribed manner 45 (4) the bankin(! company shall before permitting the removal of the contents of any- locker by any nominee or jolntlv bv any nominee and survivnrs as aforesaid, prepare in such manner 8f! m'bv be directed by the reserve bank from time to time, an inventory of the cqlltents of the lqc'k~r which shall be sfemcd by such nominee ' jo!ntly 1ty such nominee and survivors, and shall deliver a cop,f oltha inventory so prepared to such nominee or domjnee and surviwn '(5) on the removal of the contents of any locker by any nominee or jointly by any nominee and survivors as aforesaid, the liability 5 of the banldng company in relation to the contents of the locker shall stand d1scharged, (6) no suit, prosecution or other legal proceeding shall 11e against 'b banking company for any damage caused or likely to be caused, for allowing access to any locker, and liberty to remove the 10 contents of such locker, in pursuance of the provisiono; of subaection (1) or sub-section (2), as the case may be 45zf no notice of the claim of any person, other than hirer or hirers of a locker, shall be receivable by a banking company nor shall the banking company be bound by any such notice ~en though 15 expressly given to it: notice of claimaof other per-bodiire-ardid, safety lockets notrec:elvable provided that where any decree, order, certificate or other ! authority from a court of competent jurisdiction relatine to the locker or its contents is pro~u('erl befo1'e the bankini! com13any, the banking company shalj take due note of such decree, o"der, certt- ao ftcate or other authority" amendmento! hction48 (i) in sub-section (2), for the words ccan officer making an inspection under that section", the word's "an ofticer making an idspection or scrutiny under that section" shall be substituted; 15 (ti) for sub-section (4), the following sub-seetion shah be substituted, namely: -' , "(4) if any other provision of this act is contravened or if any default is made in-(t) complying with any requirement of this act or of 30 any order, rule, or direction made or condition imposed thereunder, or (ii) carrying out the terms of, or the obltgatfons under, a sch~ sanctioned under sub-section (7) of section 45, by any person, such person shad be punish::tble with flne which 35 may extend to two thousand rupees, and where a contravention or default is a contfnuing one, with 1:1 further flne whfch mav extend to one hundreti, nmee'l for every day, during which the contravention or default continues" amendmentof hctioa47 ~ ,in s~on 47 of the banking regulati~n act, for the words "do 40 co"r tnfel""r to that of a pre!lirlencv m"ll1i,trate or a ma~strate of th ftrst class", the words clno court other than' that of a metropolita: magistrate or a judicial magistrate of the ftnt class or any cqurt super:lor thereto" shrll be substituted ' 40 section 51 of the bankin& regulati'ln act shall be re-numbered as sud-sec~jon (1) of tnat secuon, ana-(a) in sub-sectioil (1) as so re-nwnbered-(t) for tile ligurds, words, bracke~ and letters "19 to 21, 23 5 10 ~, ~ lexcjuwng sud-secuon lj) j ;:s1, ~ ~ jja, :so l~uqijl& clause lu) or liuo-secllon· tt) j, 46 to 'its'", me ogures, worus, ietters ana orackets "l~ to ~la, ~ to ~h, ~ lexclucullg sud-6ectlod "(j) j, ;:s1, ji, ;:15, 3;:)i~,:io lexc!uwng c&auae la) ot s~tjon (1) j ''>t to 4:),6j:'", ':to to 41s" silau be sudstltuteo; 10 lof 1970 (ii) for the words, fi&ures and brackets "or my correspcmdillg new bank conslnutea ull(1el' sectlod a ot toe t)aokid& ~om­pi:t1ues v~c'1uls1tlod unu 'j'r<aiuiler 01 ulluertajwlgs) act, ,ui'iu, or a ~&1uwll t(uraj j:)auk estadjj:>nea lliluer ioecllon ;:s ot the lteiluua1 t1uraj jj~ act, jlflo or any cojreslxljlujllg new dailjt 21 of 1976 fool 1980 collji\t~uleu ulluer secljon a of toue  bawwlg u>w,pujles lt\cqw-slijuu i:ulil jjtujlilec ol uduenajullgs) t\ct, 11:1(su, at any otder baljkfjlg ljlsuluw,qa not1l1ec1 by tile ~traj uovemm£nr jq tjwi bellau"", tne wur'us "or ally corr~podwdg new dadk or a ~~uwij i1w-al t)i:llllt or any sud'slujaty owiat" sllau be sudltitute<1;  (iii) in the proviso,-(a) in clause (a), tor the words ",eneral manager", the words "managmg djrector" shall be substitutec1; " (b) for clauses (0) and (c), the followllli clauses aball be suustttutec1, namejy:-so  (b) nothina contained in sub-cla'ule (iii) of ~u18 (b) of sub-'sectlojl (1) of section 20 shall apply m ally' bank re1erred to in sub-section (1) 1n&olar u tbe aid sub-clause (itl) of clause (b) precludes that bank from enterina into any commitment for granudi any loan or advance to or oil bebal:f of a company (dot beiab - government company) in wb1ch aot,- tban ton" per cent of the paid-up capital is beld (whether sidaly or taken togetjler) by the central government or tbe reserve bank or a corporation owned by that badk; add 35 (e) nothing contained in section 46 or ill section '1a shall apply to,-\ (i) an omcer of the central government or tbe reserve bank, nominated or appointed 88 director of the state bank of india or" any correapondfu, new bank or a regional rural'bank or adj subiddiary bank or a bankjn, company; or 45 (ii) an officer of the state bank of idd1a or a corresponding new bank or a regional rural bank or a subsidiary bank nominated or appointed -director of any of the said banks (not being the bank of which he is an ofbcer) or of a banklnl compad1"; ,(b) after sub-section (1) as so re-numbered, the following 8ubsection shall be inserted, namely:-"(2) references to a banking company in any rule or direction relating to any provision of this act referred to in tubsecti0i\ (1) shall, except where such rule or direction provides 5 otherwise, be construed as referring also to the state bank of india, a corresponding new bank, a regional rural bank and a subsidiary bank" ' amendmentof section 52, (4) sub-section (3) shall be c?mitted; 10 (b) after sub-section (4), the following sub-section ahau be inserted, namely:-"(5) every rule made by the central government under this act shall be laid, as soon as may be after it is made, be10n each house of parliament, while it is in session, for a total period 15 of thirty days which may be comprised in one session or in two or more successive sessions, and il, before the expiry of the session immediately following the session or the succetiive sessions aforesaid, both houses agree in making any modiftcation in the nue or both houses agree that the rule -should not be 20 made, the rule shall thereafter have effect only in such moc:wled form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule" amendmentof section 56 (i)  for sub-cla'use (ii) of clause (c), the following sub-clause 25 shall be substituted, namely:-- "(ii) clauses (if), '(h) and (nb) shall be omitted;"; (ii) for clause (f), the following clause shall be :substituted, namely:-• -  ' c  (1) for se<!hon 7, the following section shall be pubsututed, 30 namely:-use of words "'badk" "banker" or "1nm!dnt' , "7 (1) no co-operative society other ~ a co-operatlw bank shall use as part of its name or in coddect1oa with its business any of the words "bank" "han__ ar "banking", and no co-operative society shall carry on the s5 business at banking in india unless it uies as part of ita name at least one of such words  (2) nothing in this section shall apply to-(a) a primary credit society, or (b) a co-operative society fonned for the protection 40 of the, mutual interest of co-operative banks or c0- operative land mortgage banks, or (c) any co-operative society not being a primary credit society, fonned by the en:ployees of- (i) a banking company or the state bank of 45 indla or a corresponcung new bank or a mblldfary bank of such banking company, state bank of lddia or a corresponding new bank, or (ii) a co-operative bank or a primary credit society or a co-operative land mortgage baj'l_k, i insofar as the word "bank", "banker" or "banldng" appears as part of :he name of the employer bank, or as the case may be, of the bank, whose subsidiary the employer bank is" 'j (iii) after clause (f) the fol1owing cl,uses shall be inserted, namely:-" '(fi) in section 8 for the proviso, the following provjso [0 shall be substituted, namely:-"provided that this section shall not apply-(a) to any such business as aforesaid which wu in the course of being transacted on the commencement at clause (iii) of section 42 of the banking laws (amendment) act 1983, so, however that the said business shall be completed before the expiry of one year from such commencement; or (b) to any business al is specified in pursuance of clause (0) of sub-eection (1) of section 6;"; 20 (fii) in section 9, for the second proviso the following pr0-visos shall be substituted namely:-"provided further that in the case of a primary credit society which becomes a primary co-operative bank after the commencement of clause (iii) of section 42 of the banking laws (amendment) act, 1983 the period of seven ),ears shall commence from the day it so becomes a primary c0-operative bank: -  provided also that the reserve bank may m my parti-c:ajar ease, extend the aforeu1d period of  ~ by such period as it may consider necessary where it is satisfied that such extension would be in the interests of the depositors of the co-operative bank"'; (i'o) in clause (g), for the figures and' letters "lob, loc", the figures and letters "lob, lobb, loc" shall be substituted; 35 (v) for clause (j), the following clause shall be substituted, namely:-! - (1) for section 18" the following section shall be substituted, namely:-45 "18 (1) every co-operative bank, not being a state' co- cub operative bank for the time befng included in the second rei81'9" schedule to the reserve bank of india act, 1934 (hereinafter referred to as a "scheduled state ca-operathrc bank'"), shall maintain in india by way of cash reserve with itself or by way of balance in a current acconnt with the reserve bank or the state co-operative bank of the state concerned or by way of net balance in current accounts, or, in the case of a primary co-operative bank, with the central co-operative bank of the district concerned, or in one or more of the aforesaid ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in india, as on the last friday of the second preceding fortnight and shall submit to 5 the reserve bank before the fifteenth day of every month a return showing the amount so held on alternate fridays during a month with particulars of its' demand and time liabilities in india on such fridays or if any such friday is a public holiday under the negotiable instruments act, to 1881, at the' close of business on the preceding working day 26 of 1881  expwnation-in this section and in section 24-(a) "liabilities in india" shall not include-(i) the paid-up capital or the reserves or any credit balance in the profit and loss account of (he 15 co-operative bank; 26 of 1962 (ii) any advance taken from a state govern  ment, the reserve bank, the development bank, the exim bank, the national bank or from the national co-operative development corporation j20 established under section 3 of the -national cooperative development corporation act, 1962 by the co-operative bank; (iii) in the case of a state or central co-operative bank, also any deposit of money with it representldg 25 the reserve fund or any part thereof maintained with it by any other co-operative society within its area of operation, and in the case of a central co- operative bank, ejso an advance taken by it from the state co-operative bank of the state concerned; go (iv) in the case of a primary co-operative bank, also any advance taken by it from the state c0-operative bank of the state concerned or the' central co-operative bank of the district con,cerned; (v) in the case of any co-operauve bank, which 35 has granted an advance against any balance maintained with it, such balance to the extent of the amount outstanding in respect of such advance; and (vi) in the case of any co-operative bank, the amount of any advance or other credit arrangement 40 drawn and availed of against approved securities; (b) "fortnight" shall mean the period from saturday to the second follo)ving friday, both days inclusive; (c) "net balance in current accounts" shad, in relation to a co-operative bank, mean the excess, if any, 45 of the aggregate of the credit balances in current account mainta;ned by that co-operative bank with the state bank of india or a subsidiary bank or a cort'aponding new bank, over the aggregate ot the credit balances in current accounts held by the said b~ witli such co-operative bank; if) (d) for the purpose of computation of liabilities, the aggregate of the liapilities of a co-operative bank to the state bank of india, a subsidiary bank, a corresponding new bank, a regional rural bank, a banking company or any other financial institution notified by the central government in this behalf shall be reduced by the aggregate of the liabilities of all such banks and insti-tutions to the:co-operative 'bank;1 (e) any cash with a co-operative bank or any balance held by a co-operative bank with, another bank, shall not, to the extent such cash or such balance represents the balance in, or investment of agricuhural credit stabilisation fund of such co-operative bank, be deemed to be cash maintained in india (2) the reserve bank may, for the purposes of this section and section 24, specifv from time to time, with reference to any transaction or class of transactions, that such transaction or transactions shall be reatarded as ijabtlfty in india of a co--operative bank, and, if anv question arises as to whether any transaction or class of transactfons shall be reearded for the purposes ,of this section and section 24 as liability in india of a co-onerative bank, the decision of the reserve bank thereon shall be final"'; - "t i\l '(tn) for clat1s~ (m), the following claust' shnll be substituted  '''''; - namely: -i 'em) in section 20a, in sub-section '(1),-loua_ '(i) th«!' words and fi~lres "notwithstand;nl2' anvthin~ to the contrary contained in section 293 of the companies act, 1956," shall be omitted; 35 (ii) in clause (0) for the words "any of itq directors" the words "any of itc; past or present directors" shall be substituted:'; (vii) in clause (0) rel~tin~ to the modification of section 22- ~'~ (a) in sub-clause -(0 for sub-section (2) of section 22 aforesaid as substituted bv thl'lt sub-clau~e the followinq sub-section shall be subrtituted, namely:-23 ot 1985 45 "(2) everv co-operative socletv carrvins!; on business as a co-oderative bank at thp commencement of the bankine' laws (addlication to co-oderative societies) act, 1965 shall before the exoirv of three months from such commencement everv co-operative bank which comes into exirtence as a result of the division of any t,ther co-o'derathre society carrving on business as a en-operative bank or the amalv8-matian of two or more cn-onerathre societies cerrvine' on bankinj! business shall brfore the exniry of three months from its~o coming into existence_ every prim !ltv credit ~~r~ietv which becomes a primary ('o-operath·e b,m'k after such commencement shall before the expiry of three months from the date on which it so becomes a primary co-operative bank and every co-operative society other than a primary credit society shall before commencing banking 1;usiness in india, apply in writing to the reserve bank for a licence 5 'ullder this section: provided that nothing in clause (b) of sub-section (t} shall be deemed to prohibit-(i) a co-operative society carrying on business as a co-operative bank at the commencement of the banking 10 laws (application to co-operative societies) act, 1965; 23 of lints or (ii) a co-operative bank which has come into existence as a result of the division of any other co-operative society carrying on business as a co-operative bank, or 15 the amalgamation of two or more co-operative societies carrying on banking business at the commencement of the banking laws (appucation to co-operatlve societies) act, 1965 or at any time thereafter; or 23 ot 1ge1 (iii) a primaty credit society which becomes a pri 20 mary co-operative bank after such commencement, from carrying on banking business until it is granted a licence in pursuance of this section or is, by a notice in writing, notified by the reserve bank that the licence cannot be granted to it"; as (b) for sub-clause (ii) the fonowing sub-clauses shall be substituted, namely:-"(ii) sub-se~tion (3a) shall be omitted; (iii) in sub-section (4) in clause (iii), the words, brackets figure and letter "and sub-section (1a)" shall be 30 omitted;";  (triii) it" clause (p) for sub-clause (ii) , the following sub-clause shall be substituted, namely:-f (ii) after sub-section (4), the fonowing sub-section shall be inserted, namely: - 35 "(4a) any co-operative bank other than a primarv cooperative bank requirint! the permission of the reserve bank under this section shall forward its application to the reserve bank through the national bank which shall give its comments on the merits of the rrpplication and send ft 1:0 40 the reserve bank: provided that the co--operative bank shall also send an advance copy of the 8pplication directly to the reserve bank"'; (b:) far' clause (q), the fotiowjng clause shall be substituted 45 namely:-, '(q) in section 24-:-a (i) in sub·section (1) thp wi)rds "after the expiry two years from the commen('em~j1t of this act- shall omjtted;  (ii) for sub-sections (%) and (2a) , the following subsections shall be substituted, namely:-"(2) in computing the amount for the purposes of sub-section (1) ,-5 ,  2 of 1934 10 (a) any balances maintained in' india by a cooperative bank in current account with the reserve bank or by way of net balance in current accounts, and in the catje of a' scheduled state co-operative bank, also the balance required under section 42 of the reserve bank of india act, 1934 to be so maintained; (b) any balances maintained by a central cooperative bank with the state co-operative bank of the state concerned, and (e) any balances maintained by a primary cooperative bank with central co-operative bank of the district concerned or with the sta~e co-operative bank of the state concerned, shall be deemed to be cash maintained in india 20 23 of 1965 (2a) (a) notwithstanding anything contained in subsection (1) or in sub~ection (2), after the expiry of two years from the commencement of the banking laws (application to co-operative societies) act, 1965, or of such further period not exceeding one year as the reserve bank having regard to the interests of the cooperative bank concerned, may think fit in any particular case to allow,-2 of 1934 (i) a scheduled state co-operative bank, in addition to the average daily balance which it is, or may be, required to maintain under section 42 of the reserve bank of india act, 1934, and (ii) every other co-operative bank, in addition to the cash reserve which it is required to maintain under section 18, 35 45 shall maintain in india in cash, or in gold valued at a price not exceeding the current market price or in unencumbered approved securities valued at a price determined in accordance with such one or more of, or combination of, the lollowing methods of valuation, namely, valuation with reference to cost price, market price, book value as may be specified by the reserve bank from time to time, an amount which shall not, at the close of business on' any day, be less than twenty-five per cent or s'uch other percentage not exceeding forty per cent as the reserve bank may, from time to time, by notiftcation in the official gazette, specify, of the total· of its demand and time liabilities in india, as on the last friday of the second preceding fortnight (b) in computing the amount for the purpose of clause (a), the following shall be deemed to be cash maintained in india, namely:-(i) any balance maintained by a scheduled state co-operative bank with the reserve bank in excess of 5 the balance required to be maintained by it under section 42 'of the reserve bank of india act, 1934; 20f 1934 (ii) any cash or balances maintained in india by a co-operative bank, other than a scheduled state co-operative bank, with itself or with the state co- 10 operative bank of the state concerned, or in current account with the reserve bank or by way of net balance in current accaunts and, in the case of a primary co~perative bank, also any balances maintained with the central co-operative bank of the, j 5 district concerned, in excess of the aggregate of the cash or balances required to be maintained under section 18; (iii) any net balance in current accounts explanation-for the purposes of this sub-section- 20 (a) approved securities, or a portion thereof, representing investment of monies of agricultural credit stabilisation fund of a co-operative bank shall not be deemed to be 'ullencumbered approved securities; 25 (b) in case a co-operative bank bas taken an advance against any balance maintained with the state co-operative bank of the state concerned or with the central co-operative bank of the district concerned, such balance to the extent to which it: 0 has been drawn against or availed of shall not be deemed to be cash maintained in india; (c) for the purpose of clause (a), the market price of an approved security shall include the price as on the date of the issue of the notification or 8s 35 o~ any earlier or later date, as may be notified from time to time by the reserve bank in respect of any class or classes of securities;"; (iii) in sub-section (3), for the proviso, the following proviso shall be substituted, namely:-40 "provided that every co-operative bank, other than a primary co-operative bank, shall also furnish withip the said period, a copy of the said retum to the national bank:'; (iv) in sub-section (6), in clause (4), for the worda 45 "fourteen days", the words "thirty days" shall be substituted~; i (x) after clause (4), the following clause shall be inserted, namely:-'(qq) after section 24, the following section shall be inserted, namely:-5 10 "24a without prejudice to the provisions of section 53, power to the reserve bank may, by notification in the official gazette, exempt declare that; for such period and subject to !nch conditions as may be specified in such nofiflcation, the whole or any part of the provisions of section 18 or section 24, as may be specified therein, shall not apply to any co-operative bank or class of co-operative banks, with reference to all or any of the offices of such co-operative bank or banks, or with reference to the whole or any part of the assets and liabilities of such co-operativ~ bank qr banks" '; ~xd in clause (w) relating to the modification of section 35,-(4) in sub-clause (i), for item (b), the following item shall be substituted, namely:-, (b) the following proviso shalll:>e inserted at the end, namely:-20 "provided that the reserve bank may, if it considers it necessary or expedient so to do, cause an inspection to be made of a primary co-operative bank under this sub-section by one or more officers of a state co-operative bank in the state in wi1ich such primary co· operative bank is registered" '; (b) sub-clauses (iii) and (iv) shall be re-numbered as subclauses (iv) and (v) respectively and before sub-clause (iv) as 10 re-numbered, the -following sub-clause shall be inserted, namely:-30 "(iii) atter sub--section (4)" the following sub-section shall be inserted, namely:-"(4a) without prejudice to 'the provisions of subsection (4), the reserve bank may, if it considers it necessary or expedient so to do supply a cop of the 35 report on any inspection or scrutiny to the state cooperative bank and the registrar of co-operative societies of the state in which the bank which has been inspected or whose affairs have been scrutinised is registered" '; (xii) for clause (z), the following clause shall be substituted, 40 namely:-- (z) in section 36, in sub-section (1) ,-(a) clause (b) shall be omitted; (b) for clause (d), the following clause shall he substituted, namely:--45 ie (d) at any time, if it is satisfied that for the re· organisation or expansion of co-operative credit on sound lines it is necessary so to do, by an order in writing and on such terms and conditions as many be specified therein-(i) depute one or ·more of its oftlcers to watch the proceedings at any meeting ~f the board of 5 directors of the co-operative bank or of any other body constituted by it and require the co~perative bank to aive an opportunity to the ofticer so deputed to be heard at such meetings and to offer such advice on such matters as the officer may consider 10 necessary or proper for the reorganisation and expansion of co-operative credit on sound lines, and also require such officer to send a report of such proceedings to the reserve bank i (ii) appoint one or more of its officers to observe 15 the manner in which the affairs of the c~perative bank or its offices or branches are heinl conducted and make a report thereon;" ';  (xiii) in clause (za) relating to the modification of section 36a, in sub-clause (ii) , in sub-section (3) as inserted by that sub-clause, 20 for the words, brackets, letters and figure "in clause (ecc) of section 5", the words, brackets, letters and figure "in clause (cev) of section 5" shall be substituted; (xiv) after clause (za) , the following clause shall be inserted, namely:-25  (zaa) in section 36ad, sub-section (3) shall be omitted;"; (xv) for clause (zc) , the following clause shall be substituted, namely:-'(zc) in section 46,-(it) in sub-section (4), the word "or" occurring at the 30 end of clause (i) and clause (ii) shall be omitted; (ii) in clause (a) of the explanation, after the words "includes a", the words "co-operative society" shall be insert-, ed;'  chapter v 35 amendments to the state bank of india act, 195543 in chapter vi after section 35 of the state bank of india act, 1955 23 of (hereafter in this chapter referred to as the state bank act), the ]955 :following section shall be inserted, namely:-rnsertion of new section 35a arrangement with the state bank on appointment of directors to prevail "35a (1) where any arrangement entered into by the state 40 bank with a company provides for the appointment by the state l3ank of one or more directors of such company, such provisions and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the companies act, 1956, or in any other law for the time being 45 1 of 1156_ in force or in the memorandum, articles of association or any otht;r instrument relating to the company, and any provision regarding share qualification, age limit, number of directorships, removal from oftlce of directors and such like conditions contained in any such jaw or instrument aforesaid, shall not apply to any director appointed by the state bank in pursuance of the arrangement as aforesaid (2) any director appointed as aforesaid shall-5 (a) hold office during the pleasure of the state bank and may be removed or substituted by any person by order in writing of the state bank; (b) not incur any obligation or liability by reason only of his being 1i director or for anything done or omitted to be done loin good, faith in the discharge of his duties as a director or anything in· relation thereto; (c) not be liable to retirement by rotation and $11 110t be taken into account for computing the number of directors liable to such retirement" 44 in section 40 of the state bank act,-amendment of section 40 (i) in sub:section (1), for the words "auditors' report on the working of the state bank", the words "auditors"report and a report by the central board on the working and activities of the state bank" shall be substituted; 20 (ii) after sub-section (3), the foll~wing sub-section shall be ill6erted, namely:--"(4) the central government shall cause the auditors' report and the report by the central· board on the working and activities of the state bank to be laid, as soon as may be 25 after they are received, ,before each house of parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions" 45 in section 42 of the state bank act, in sub-section (2), after the word "working", the words "and activities" shall be im;erted amendmeut of section 'oj '1_ amendment of section 43 30 46 in section 43 of the state bank act, in sub-section (2), for the words "as may be", the words "as may, by general or speciaj order, be" shall be suhtitituted 47 in section 49 of the state bank act, after sub-section (2), the following sub-section shall be inserted, namely:-amendment of section , :t9 "(3) every rule made by the central government under this 35 act shall be laid, as soon aos may be after it is made, before each house of parliament, 'while it is in session, for a total period of thirty days which may be comprised in one session or in two or more s~ccessive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule or both houses agree that the rule sho'uld not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, hpwever, that any such modification or ~nulment shpll be without prejudice to the validity of anything previously done under that rule" i 48 in section 50 of the state bank act, after sub-6ection (3), the fol1owin~ s'ub-section shall be inserted, namely:-5 amendment of sectlod 50 " (4) every regulation shall, as soon as may be after it is made under this act by the central board, be forwarded to the central government and that government shall cause a copy of the same to be laid before each house of parliament, while it is in session, for a total period of thirty days, which may be comprised in one session or 10 in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the regulation or both houses agree that the regulation sho'uld not be made, the regulation shall thereafter have effect only in such modified 15 fonn or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation"  chapter vi amendments to the state bank of india (svbsl!>iary banks) ~ct, 1959 2049 after section 36 of the state bank of india (subsidiary banks) aa of act, 1959 (hereafter in this chapter referred to as the subsidiary banks 1959 act), the following section shall be inserted, namely:-insertion of new section 36a "36a(1) a subsidiary bank shall, if so required by the reserve bank, act as agent of the reserve bank at all places in india, where 25  it has a branch, for-subsidiary bank to act as agent of the lteaerv bank (a) paying, receiving, collecting and remitting money, bullion and securities on behalf of any government in india; and (b) undertaking and transacting any other business which 30 the reserve bank may from time to time entrust to it (2) the terms and conditions on which any such agency business shall be carried on by the subsidiary bank on behalf of the reserve bank shall be such as may be agreed upon (3) if, no agreement can be reached on any matter referred to 35 in sub-section (2) or jf a dispute arises between a subsidiary bank and the reserve bank as to the in~rpretation of any agreement between them, the matter shall be re'ferred to the central government and the decision of the central government thereon shall be final (4) a subsidiary bank may transact any business or perform any functions e~trusted to it under sub-section (i), by itself or throu,h any agent app~oved by the reserve bank" so after section 38 of the subsidiary banks act, the following idjertion lection shall be inserted, namely:-of new section 3ba 5 10f 1956 10 arrange'"-ment with subsidiary banks on appointment of direc!-tors to prevail "38a (1) where any arrangement entered into by a subsidiary bank with a company provides for the appointment by the subsidiary banit of one or more directors of such company, such provision and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the companies act, 1956, or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to the company, and any provision regarding i!\harc qualification, age limit, number of directorships, removal from office or directol's and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the subsidiary bank in pursuance of the arrangement as aforesaid 15 (2) any director appointed as aforesaid shall-(a)' hold office during the pleasure of the subsidiary bank and may be removed or substituted by any person by order in writing of the subsidiary bank; 20 (b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto; f  (e) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors uable to such retirement" ' '  51 in section 43 of the subsidiary banks act,-(i) in sub-section (1) ,-amendment of section 43 ; (a) in the opening portion, for the words "and the reserve bank", the words ", the reserve bank and the central govem-30 ment" shall be s'ubstituted; (b) in clause (a), after the words "on the working", the words "and activities" shall be ins'erted; (ii) after sub-section (2), the following s'ub-section shall be inserted, namely:-35 "(3) the central go~rnment shall cause the auditor's report and the report by the board ·of directors on the working and activities of the subsidiary bank to be laid, as soon as may be after they are received, before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions" 52 i n section 44 of the su bsidiax-y banks act,-amendm«w1 of section 44 (a) in sub-section (1), in the proviso, for the words "the state 5 banlc, or to the reserve bank", the words "the state bank, the reserve bank or the central government" shall be substituted; (b) in sub-'section (2), after the word "working", the words "and activities" shall be inserted 13 in section 53 of the subsidiary banks act, after sub-section (2), 10 the following wb-section shall be inserted, namely:-amendment of section :53 • (3) where the state banlc: nominates any of its officers as director of a subsidiary bank, such director shall not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the- discharge of 15 his duties as director or anything in relation thereto" 54 in section 62 of the subsidiary banks act, for sub-section (3), the following sub-section shsl1 be substituted, namely:~ amend ment ot section 62 ,  (3) every rule made under this section shall be laid, as ~oon a'3 may be after it is made, before each ho'use of parliament, while 20 it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of tht session immediately following the se6sion or the successive sessions aforesaid, both houses agj'ee in making any modification in the rule or both houses agree that the rule should not 25 be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be witho'ut prejudice to the validity of anything previously done under that rule" 55 in section 63 of the subsidiary banks act, after sub-section (3), the 30 "'~ following sub-'3eetion shall be inserted, namely:-amendment 01 section 63 i • (4) every regulation shall, as soon as may be after it is made 'under this act by the state bank, be forwarded to the central governmeut and that government shall cause a copy of the same to be laid hefore each house of parliament, whil~ it is in session, for a 35 total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions af~resaid, both houses agree in making any modification in the regulation or both houses agree that the regulation should not 4" he made, the regulation shall thpreafter have effect only in such modified form or be of no effect as the case may be; so, however, that any ~u~~ )'nodification or annulment shall be witho'ut prejudlct: to the validly of anything previously done under that regulation" i  chapter vii amendments to me deposit insurance and credit guaiwftei: corporation act, 1961,, of leu 56 in section 2 of the deposit insurance and credit guarantee amend-5 corporation act, 1961 (hereafter in this chapter referred to as the ment of deposit insurance corporation act) ,_ section 2 looflm9 10 (a) in clause (b), for the wordo; and figures ", a subsidiary bank and any other banking institution notified under section 51 of the banking regulation act, 1949", the words "and a subsidiary bank" shall be substituted; (b) ior clause (ee) , the following clause shall be ubstituted, namely:-lot 1,0 4octll880 '(ee) "corresponding new bank" means a corresponc:jing new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970 or, as the case may be, under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1980;'; (e) in clause (i) ,-(i) after the words "banking company", at the first place ao where they occur, the words "or a corresponding new bank" shall be inserted and shall be deemed to have been inserted with effect from the 1st day of july, 1971; (ii) for sub-clause (i), the following sub-clauses shall be substituted and shall be deemed to have been substituted with 25 effect from the 19th day of july, 1969, namely:-"(i) a banking company referred to in clause (a) or clause (b) of sub-section (1) or section 13, or (ia) a corresponding new bank, to which the provisions of clause fa) of sub-section (1) of 'sectioll 13 apply, or"; 30 (d) in clause (k), the words and figures ", and includes any banking institution notified under section 51 of the said act after such commencement" shall be omitted 57 in section 4 of the deposit insurance corporation act, in sub- amendsection (1), for the words "fifteen crores of rupees", the words "ftfty ment ot :-j5 crores of rupees" shall be substituted section" 58 in aection 6 of the deposit insurance corporation act,--amendment of (a) for sub-section (2) the following sub-section shall be section 8 substituted, name1y:-"(2) (i) a direct",· nominated under clallse (0) or clause (c) 40 of sub-section (1) shall hojd office during the pleasure of the authority nominating him; and  (ii) 'a director nominated under clause (d) or clause (e) ot sub-section (i), shall pold office for such period not exceeding four years as may be specified by the central government and thereafter until his successor assumes office"; (b) in sub-section (3), in the opening portion, after the word, 5 brackets and letter "clause (d) ti, the words, brackets and letter "or clause (e)" shall be inserted; (c) after sub-section (4), the following bub-'section shall be inserted, namely:--"(5) if a director nominated under clause (e) of sub-eectfon 10 (1)-(0) becomes subject to any of the disqualiflcations mentioned in clauses (0) to (d) of sub-section (3); or (b) is absent without leave of the board for more than three consecutive meetings thereof, 15 his seat sh-all thereupon become vacant"  amendment of aect10n 11 59 in section 11 of the deposit insurance corporation act, the words and figures ", or, as the case may be"after it is notified under section 51 of the said act" shall be omitted 80 in section 13 of the deposit insurance corporation act, in sub- 110 sections (2) and (3), the brrcketr and letter" (b) ," shall be omitted amendment ot tec:tion' 13 amendment of sectloh 13a 61 in section 13a of the deposit immrance corporation act, in clawle (b) of sub-section (2), after sub-clause (ii), the following sub-clause shall be inserted, namely: - '  ~ "(iii) every co-operative bank which has come into existence after 25 the commencement of the deposit insurance corporation (amendment) act, 1968, as a result of the division of any other co-operative ~6 of 1968 society carrying on business as a co-operative bank, or the amalgamation of two or more co-operative societies carrying on banking business, at the commencement of the banking laws (application to go co-operative societies) act, 1985, or at any time thereafter, within 23 of 1966 three months of its having made an application for a licence under the said section:" amendment of section 16 62 in section 16 of the deposit insurance corporation act, in subsection (1), in the proviso, for the words and figures "of section 13", the 35 words, brackets and figures "of sub-section (1) of section is" shall be substituted and shall be deemed to have been substituted with effect from the 19th day of july 1969 amendment of 8edlon 32 63 in scction 32 of the deposit insurance corporation act, in wbsection (2), for the words "for not less than thirty days before each 4d house of parliament as soon as may be after ellch such report sa neelved by the central government", tim! worda "a~j soon u may be after they are rec(fived before each house of parliament while it is in hulon  " for a total pprlod of thirty days which may be comprised in one ~on or in two or more succossive sessions" shall be ~bltltuted  in section 50 of the deposit insut'8nce corporation act, after subaection ('), the following sub-section shall be inserted, namely:-amendment of section iso -  (4) every regulation shall: as soon as may be after it is made under this act by the board, be forwarded to the central govern-5 ment and that government shall cause a copy of the same to be laid before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more 'successive sessions, and if, before the expiry of the session immediately following the session or the successive 10 sessions aforesaid, both hou'ses agree in making any modification in the regulation, or both houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified fond or be of no effect, as the case may be; 50, however, that any such modification or annulment shall be without prejudice 15 to the validity of anything previously done under that regulation!'  chapter vui aib:ndments to the banking compa:"!"'; (acqulsinon and taansnn of undertakings) a~, 1970is in section 3 of the banking companies (acquisition and transfer amend-s of uno go ot undertakings) act, 1970 (hereafter in this chapter referred to as the ment of bank nationalisation act),-section 3 (i) in sub-section (5), for the words "one or more forms of business", the words "one or more of the other forms of business" shall be substituted; (ii) after 5ub-section (6), the following sub-section shall be inserted, namely:--  (7) (i) the 'corresponding new bank shall, if so reqnired by the reserve bank, act as agent of the reserve bank at all places in india where it has a branch, for-(a) paying, receiving, collecting and remitting money, bullion and securities on behalf of 'any government in india; and (b) undertaking and transacting any other busine which the reserve bank may from time to time entrust to it 35 (ii) the terms and conditions on which any 'such agency business shall be carried on by the corresponding new bank on beltalf of the reserve bank shall be such as may be agreed upon (iii) if no agreement can be reacbed on any matter referred to in clause (ii) , or if a dispute arises between the corresponding new bank and the reserve bank as to the interpretation of any agreement between them, the matter shall be referred to the central government and the decision of the central government thereon shali be final (i,,) the corresponding new bank may transact any business or perform any functions entrusted to it under clause (i) by itself or throueh any agent approved by the reserve bank" , 61 in section 9 of the bank nationalisation act,-(i) sub-section (5) shall be re-numbered a's sub-section (6) and before sub-section (6) as so re-numbered, the following sub-sectl  and explanation shall be inserted, namely:-'(5) on and from the date of coming into operation of a 5  scheme made under this section with respect to any of the matters referred to ill clause (c) of sub-section (3) or any ·matters incidental, consequential and supplemental thereto,-(a) the scheme shall be binding on the corresponding new ·bank or corporations or banking institutiod's, and also 10 on the members if any the depositors, and other creditors and employees of each of them and on any other persons having any right or liability in relation to any of them including the trustees or other persons, managing or in any other manner connected with, 'any provident fund 01' other 15 fund maintained by any of them; (b) the properties and assets of the corresponding new bank, or as the case may be, of the banking institution shall, by virtue of and to the extent provided in the scheme, stand transferred to, and vested in, and the liabilities of the cones- !zo ponding new bank, or, as the case may be, of the banking institution shall, by virtue of, and to the extent provided :in the scheme, stand transferred to, and become the uabilities of, the corporation or corporations brought into existence by reconstitution or the banking institution or the corr  25 ponding new bank, as the case may be explanation-in this section "banking institution" means a banking company and includes the state bank of india or a subsidiary bank' (ii) in sub-section (6) as so re-numbered, for the words "which 30 may be comprised in one session or in two successive sessiodb, and if, before the expiry of the session in which it is so laid or the session immediately following", the words "which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the succes- 35 sive sessions aforesaid" shall be substituted  67 in section 10 of the bank nationalisation act,-amend-__ t of l8cuonlo (i) after sub-section (4), the following e:rplandtiol1s shall be inserted, namely:-"ea;planation 1-for the purposes of this act-40 (a) the btuance-sheet shall not be treated u not di8-~losing a true and fair view of the affairs of the correspondm~ new bank, and (b) the profit and loss account shall not be treated u not showing a true balance of profit or lobs for the period 45 covered by such account, merely by reason of the fact that the balance-sheet or, as the cue may be, the profit and lou accouut, does not disclose all1 ioaflh9 matters which are by the provisions of the banking regulation act, f949, read with the relevant provisions of this act or a,ny other act, not required to be disclosed 5 e:rplanation h-for the purposes of this act the acct7unts of the corresponding new bank shall not be deemed as having not been properly drawn up on the ground merely that they do not disclos& certain matters if- 10 of 11'8 10 (i) those matters are such as the corresponding new bank is, by virtue gf any provision contained in the banking regulrtion act, 1949, read with the relevant provisions of this act, or any other &:t, not required to disclose; and (ii) the provisions referred to in clause (i) are specified in the balance-sheet and profit and loss accc7ildt of the corresponding new bank or in the auditor's report"; (ii) after sub-section (7), the following sub-section shall be inserted, namely:- (1 a) every corresponding new bank shall furnish to the central government the annual balance-sheet, the profit and loss account, and the auditor's report and a report by its board of / directors on the working and activities of the bank during the period covered by the accounts"; (iii) in sub-section (6), for the words "for not less than thirty dayw before each house of parliament as soon as may be after each auch report is received by the central government", the words '''as loon as may be after they are received before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions" shall be substituted; (if-') after sub-aection (8), the following sub-section shall be inserted, namely:-30 35 "(9) without prejudice to the foregoing provisions, the central govermnent may, at any time, appoint such number of auditors as it thinks fit to examine and report on the accounts of a corresponding new bank and the auditors so appointed shall have au the rights, privileges and authority in relation to the audit of the accounts of ·the corresponding new bank which an auditor appointed by the corresponding new bank has under this section," 68 aft~r section 16 of the bank na!ionalisation act, the follow;ng 40 section shall be inserted, namely:-· insertion of new i8etion 16a arrange_ ment with 45 "16a (1) where any arrangement entered into by a corresponding new bank with a company provides for the appointment by the corresponding new bank of one or more directors of such company, such provision and any appointment ot directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the companies act, 1956, or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to the company, and ~orre&-pondijrg bewbank on appointment of directors toprevau any provision regarding ware quawication, age limit, nwnbej: of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, ~ not apply to any director appoidted by the corresponding new bank in pursuaiwe of the arrangf'ment as aforesaid , 5 (~) any d1rector appointed as aforesaid shall- -(a) hold office dw'idg the pleasw:e 01 tlle ,f,',conesponding new bank and may be removed or substituted by any person by order in writing of the corresponding new banlt; (b) not incur any obligatioa or liability by reason only ot 10 his beillg a dirt'ctor or for anything done or omitted to be done ill goou fai1h m the dlscbarge of his duljes as a director or anytiullg in relation thereto; (c) not be liable to l'etirement by rota\lon and shall not 1)8 taken lllto account for coiuputia& the llumber ot directors 'wl~ 15 to such l'elu'ement" fi9 in sectioll 19 of the bank n ationalisation act, after sub-sectioo (3), the lol1<>wing sub-section shall be inserted, namely:-ameclment of iiectiob 19  (4) every regulation shall, as so011 as may be after it is lnade under this act by the board of directors of a co~pol1dldg new 20 bank, be iorwardeci to the central government md that govel'w:nellt sball cause a copy of the same to be laid  before eacll house of parliament, while it ls in session, tor a total period of thirty days whu:b may be comprist>u ljl one ,5ess,ion or in two or more auccessive iicsslow;, and if, before the expiry of tbe seision immediately follo~ ~5 mg tile session or the successive sessions aforesaid, both houses ;~gl'ec in maklng any modification in the regulation or both houses iigtee tnat tne regulation should not be made, the re~t1on sball tjle1'eafter have effect only in such modilied form or be of no e1fect, as the case may be; so, however, wlat any such modificatlon or 30 annulment shaij be wlthout prejudice to the validuy of any thins previously (lolle under tbat regulation"  chapter ix amelmm:ents to nu: regional rural l3a1us ar:r, 1976amendmeat of section 80 70 section 30 of the regional rural banks act, 1976 shall be re-11 of numbered as sub-section (1) thereof, and after sub-tlection (1) as 80 re- 35 19'18 numbered, the followma sub-section shall be inserted, ~:-  ' (2) every reiuj,ation shall, as so~)ll as may be after it is made under this act by the board of directors, be forwarded to the central government and that government shall cause a copy of the same to be laid before each ho!:,se of parliament, while it is in session, lor a total fo period of thirty days which may be comprised in one session or in two or idore successive sessions, and if, before the expiry of the session immediately foll~wing the se88ion or the aucce&ll:ve seulods aforesaid, both houses agree in making any modification in the 45 regulation or both houses agree that the regulation should not be made, the regulation shall thereafter have e1fect only in such modified form or be of no effect, as the case may be; 80, however, that any such modification or annulment shall be without prejudice to \he validity of anything previously done under that recujauon  , 50  ambndmjints to the banking companus (acqulsltion\nd transfer of undertakings) ac:r, 1980oaf 1980 amendment of iectitm3 71 in section 3 of the banking companies (acquisition and transfer 5 of undertakings) act, 1980 [hereafter in this chapter referred to as the bank (second) nattonalisation act],-(i) in sub-section (5), for the words "one or more forms of business", the words "one or more of the other forms of business" shall be substituted; 10 (ii) after sub-section (6), the following sub-section shall be inserted, namely:-"(7) (i) the corresponding new bank shall, if so required by the reserve bank, act as agent of the reserve bank at all places in india where it has a branch, for-15 (a) paying, receiving, collecting ilnd remitting money, bullion and securities on behalf of any gm~rnment in india: and (b) undertaking and transacting any other ~ltsiness which the reserve bank may from time to time entrust 110 to it   (ii) the terms and conditions on which any such agency business shall be carried on by the corresponding new bank on behalf of the reserve bank shall be such as may be agreed ullon (iii) if no agreement can be reached on roy matt~l' l"cfel'red to in clause (ii), or if a dispute ari~s between the rom'eosponding new bank and the reserve bank as to the interpretation of any agreement between them, the matter shall be refel't'ffl (0 the central government and the rlecision of the central gnvernment thereon shall be final 30 (iv) the correspondfn~ new bank may transact f'nv busine~s or perfonn any functions entrusted to it lln~er chu<;e (f), bv itself or through any lh!ent auproved bv the resenre bank"  am,ej1dment of iectlon 872 in section 9 of the banle: (seconrl) nati'analisation act subflection (5) shall be re-nllmbered 1l~ sub-~ection (6) anti before sub-35 se-ction (6) as ~o re-numbered, thf' following sub-serti~n and e-eplar>ouon ~hal1 be inserted, namely: -' - - (5) on and from the date of mming into operation of a schpme made under this section with rp~pect to anv of the mattej:'s referred to jn clause (c) of sub-!!iection (2) or any mntters incld~nta1 consequential and supplementai thereto-45 (tt) the scheme shall be bindin~ on th~ rorres'!"londinrr new bank or corporations or banking institutions and '11<:0 on the membe~ if any the deoositors and oth~r crecp('rs and (>mploy~('~ of each of them nlld on any nther persons hrv;'1g any right or ii abiutyin t'elatfon to an" of them jndu(ung- \ he ~sb~ or othe't persom, mana1!fn~ or in "ny other mmlner connected with ilnv providrnt fund oy- othf--funil ma'ntnln't"d hy' any of thpm: - (b) the properties and 'seets of the correspondine new bank or, as the case may be, of the banking inatimtioo shall, by virtue of and to the extent provided in the scheme, stand transferred to, and vested in, and the liabilities of the corresponding  new bank or, as the case may be, of the banking idstftutiod shall, 5 by virtue of, and to the extent provided in the scheme, stand transferred to, and become the liabilities of,· the corporation or corporations brought into existence by reconstitution of the hanking institution or the corresponding new bank, as ~ case may be 10 explon4tion-in this section, "banking institution" means a banking company and includes the state bank of india or a subsidiary bank' -  13 in 'section 10 of the bank (second) nationalisatlon act,-amendment of -ctidh 10 (i) after sub-section (4), the following explanations shall be j 5 inserted, namely:-"'explanation i-for the purposes of this aet,-(a) the balance-sheet shall not be treated as dot di6-closing a true and fair view of the affairs of the correspond'lnl dew bank, and lito (b) the profit and lou account shall not be treated u not showing a true balance of profit or 1011 for the period covered by such account, 10tjilmt merely by reason of the fact that the balance-sheet or, as the case may be, the profit and lois accouut, does not disclose any ~5 matters which are by the provisions of the banking regulation act, 194f, read with the relevant provisions of this act or any other act, not required to be disclosed explanation il-for the purpose~ of this act, the accounts of the corresponding new bank shall not be deemed es having 30 not been properly drawn up on the ground merely that they do not disclose certain matters tf-(i) those matters are such as the corresponding new bank is, by virtu-e of any provision contained in the banking regulation act, 1949, read with the relevant provisions of 35 ii or 1m • this act, or any other act, not required to diselose; and (ii) the provisions referred to in clause (i) are specified in the balance-sheet and profit and loss account of the corresponding new bank or in the auditor's report it; (ii) after sub-secuon (1), the following bub-section shau be 40 insened, namely:-•• (7 a) every corresponding new hank shall fumblh to the central government the annual ba1ance-sheet, the profit and loss account, and the auditor's report and a report by its board of directors on th(> working and activities of the bank during the 45 period covered by the accounts"; (til) in sub-section (8), for the words "for not less than thirty days before each house of parliament as soon as may be after each such report is received by the central government", the words "as 'soon as may be after they are received before each house of parlia-, ment, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions" shall be substituted; (iv) after sub-section (8), the following 'sub-section shall be inserted, namely:-10 "(9) without prejudice to the foregoing provisions, the central government may, at any time, appoint such number of auditors as it thinks fit to examine and report on the accounts of a corresponding new bank and the auditors so appointed shall have all the rights, privileges and authority in relation to the 15 audit of the accounts of the corresponding new bank which an auditor appointed by the corresponding new bank has under this section" 74 after section 16 of the bank (second) nationalisation act, the following section shall be inserted, namely:-insertion ot hew section 16a 20 hu156 25 arrange_ ment with carre, ponciing new bank on appoint ment of director to prevail "16a (1) where any arrangement entered into by a corresponding new bank with a company provides for the appointment by the corresponding new bank of one or more directors of such comptmy, such provision and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the companies act, 1956, or in any other law for the time being in force or in t~ memorandum, articles of association or any other instrument relating to the company, and any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any j;uch law or instrument aforesaid, shall not apply to any director appoin~d by the corresponding new bank in pursuance of the arrangement as afo~said (2) any director appointed as;aforesaid shall-(a) hold office during the pleasure of the corresponding new 35 bank and may be removed or substituted by any person by order in writing of the corresponding new bank; (b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or any-40 thing in relation thereto; (c) not be liable to retirement by rotation and shall not be  taken into account for computing the number of directors liable to such retirement" 75 in section 19 of the bank (second) nationalisation act, after s'ilb-45 section (3), the following sub-section 'shall be inserted, namely:-amendmentof section i • "(4) every regulation shall, as soon as may be after it is made under this act by the board of directors of a corresponding new bank, be forwarded to the central government and that government shall cau~ a copy of the same to be laid before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more succes'sive sessions, and if, before the expiry of the session immediately follow-5 ing the session or the successive sessions aforesaid, both houses agree in making any modification in the regulation or both houses agree that the regulation should not be made, the regulation sball thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or 10 annulment shall be without prejudice to the validity of anything previously done under that regulation"  statement of objects and reasonsthe bill seeks to amend the bankers' books evidence act, 1891, the reserve bank of india act 1934 the banking regulation act, 1949, the state bank of india act 195-5, the state bank of india (subsidiary banks) act,' 1959, the deposit insurance and credit guarantee corporation act ] 961, the banking companies (acquisition and transfer of undertakings) act 1970, the regional rural banks act, 1976 and the' banking companies (acq'uisition and transfer of undertakin$s) act, 1980 in pursuance of the recommendations of the banking commission and of the committee on subordinate legislation and also in ,the light of the experience gained in the administration of those acts, the following are the more important amendments proposed in the bill:-(i) it is proposed to provide for the facility; of nomination to a "depositor", to nominate a person who could be paid, on the depositor's death the amount to the credit of the depositor'~ accounts likewise, the nominee of a person who has kept articles in safe custody with the bankers or has hired a locker will be able to get the articles kept in the bank's safe custody or locker in the event of the death of such a person the banks will be required to keep an inventory of the articles returned to the persons concerned in such manner as may be directed by the reserve bank from time to time (ii) the scope of the purposes for which banks can form s'ubsidiaries is being widened (iii) it is proposed to a'uthorise the reserve bank to increase the statutory liquidity ratio to be maintained in india by banks from 25 per cent up to a maximum of 40 per cent of the total demand and time liabilit:les of a bank in india and also to empower the reserve bank to impose penalties on banks which do not comply with the liquidity requirements of section 24 of the banking regulation act 1949, on the lines of similar provisions regarding maintenance of cash reserves contained in section 42 of the reserve bank of india act 1934 it is also proposed to change the period for filing of returns from weekly to fortnightly and to empower the reserve bank to specify the mode of valuation of security (iv) section 42 of the reserve bank of india act, 1934 is being amended to provide that the concept of average daily balance will now be linked to balances held at the close of business on each day of a fortnight instead of a week and to enable the scheduled banks to file fortnightly returns on ~ach altemte friday in a month instead of on each friday of the month (v) sections 45r, 45s and 45t of new chapter liic,tought to be inserted in the reserve bank of india act, 1934, provide that no individual or firm or an 'i1nincorporated association of individuals shall, at any time, have deposits from more than the specified number of depositors mentioned therein the officers of the reserve bank or the state governments, authorised in this behalf, will have power to obtain search warrant from a court so as  to enable them to enter into and search any premises suspected to be used for purposes connected with the receipt of deposits in contravention of the provisions of the act (vi) it is proposed to amend the state bank of india act, 1955 and the state bank of india (subsidiary banks) act, 1959 for lay  ing before each house of parliament, as in the case of nationalised banks, the auditors' report and the annual report on the working and the activities of the banks (vii) the banking regulation act, 1949 is being amended-(a) to empower the central government to frame rules specifying the periods for the preservation of the various types of records, s'uch as, books, accounts and other documents as also of the different instruments paid by banks; (b)· to provide that banks may return at the request of a customer a paid instrument before the prescribed preservation period,' only after making and keeping in the bank's possession a true copy of all relevant parts thereof made by mechanical or other processes ensuring the accuracy of the copy (viii) the bankers' books evidence act, 1891 is being amended-(a) to prqvide that during police investigations it would be sufficient for a bank to produce before police authorities certified copies of relevant extracts from its books unless the production of copies is considered not adeq'uate by an officer of a rank not lower than the rank of a superintendent of police; (b) to make it clear that if the original documents are destroyed by a bank in the usual course of its business and the copies of documents have been obtained by mechanical or other process before such destruction they shall be admissible in evidence (ix) it is further proposed to amend the state bank of india act, 1!}55 , the state bank of india (subsidiary banks) act, 1959 and the banking companies (acquisition and transfer of undertakings) act, 1970 and the banking companies (acquisition and transfer of undertakings) act, 1980 so as to provide a certain measure of pt'otection to the directors nominated by s'uch banks on the boards of companies assisted by them against prosecution as 8 result of non-compliance with provisions like share qualification, age limit, number of directorships, removal from office, retirement by retation, etc, contained in the companies act, 1956 or any other law or the memorandum or articles of association or any other instrument of the concerned company (x) it is further proposed to include the usual provision for laying of rules and regulations made under acts before parliaj ment in the banking regulation act, 1949, the state bank of india act 19f15, the state bank of india (s'ubsidiary banks) act 1959, the deposit insurance and credit guarantee corporation act, 1961, the banking companies (acquisition and transfer of undertakings) act 1970, the regional rural banks act, 1976 and the banking cbmpanies (acquisition and transfer of undertakings) act 1980 2 the notes on clauses explain in detail the various provisions contained in the bill new delm; the 27th april, 1983 pranab mukherjee clause 2-this clause seeks to substitute clause (4) of section 2 of the bankers' books evidence act, 1891 so as to amplify the definition of the term "legal proceedings" by including therein any investigation or inquiry under the code of criminal procedure, 1973, or under any other law for the time being in force for the collection of evidence conducted by a police officer or by any other person (not being a magistrate) authorised in this behalf by a magistrate or by any law for the time being in force this clause also seeks to amend clause (8) of the said section so as to provide that a copy made from the original document by mechanical or other process ensuring the accuracy of such copy, together with a certificate to that effect, as- also a copy prepared from the original doc~ment prior to the destruction of the original by a bank in the usual course of its business, together with a c~rtificate to that effect shall be admissible in evidence these amendments are based on the recommendations of the banking commission this clause further seeks to incorporate a new section in the bankers' books evidence act, 1891 so as to provide that thl! order of a court or judge for production and inspection <if books of thl! bank shall be construed a'i referring to an order made by an officer of a f rank not luwer than a superintendent of police as may be specified in this behalf by the government by which the police officer or any other per~on conducting the investigation or inquiry is employed clause 3-this clause seeks to amend clause (4b) of section 17 of the reserve bank of india act, 1934 so as to enhance the ceiling on advances that can be granted by the reserve bank of india to the industrial finance corporation of india, from rs 3 crores to rs 15 crores this amendment is cpnst:quential to the amendment already carried out to sub-section (3) of section 21 of the industrial finance corporation act 1948 by the industrial finance corporation (amendment) act, 1982 clause 4-the amendment seeks to enable the central governm-:nt t~) approve the for~ of securities that may be held by the reserve bank for the purposes of section 33 of the reserve bank of india act 1934 without having to formany notify the securities that may be so held ' clause 5-this clause seeks to amend explanation to section 40 of the ~eserve bank of india act 1934, so as to replace the reference to foreign exchange regulation act 1947, by a reference to foreign exchange regulation act, 1973 ~ cl~lise 6-this clause !ceks to amend section 42 of the reserve bank of india act, 1934,- (i) to en~ure that 10llos from national co-operative dcvelop-il~cnt  ,?orporatjon by the state co-operativc banks are not treated  is liabilities for the purpose of calculation of "cash reserves" ratio,   (ii) to ensure that loans ~rom sponsor banks by regional rural hanks ,!!"c d?t treated as hablhttcs for purposes of calculation of "cash rcsej'ves ratio, (iii) to authorise the reserve bank to settle any disputes or douots that may arise in c!a~:sifying transactions as liabilities  ( iv) to provide that the concept of average daily balance will now be linked to balances held at the close of business on each day of a fortnight instead of a week and that the scheduled banks will now be required to file fortnightly returns on each alternate friday in a month instead of on '!ach fnday of the month as hitherto provision is also being made for filing of a special return when: hlst friday of a month is not an alternate friday for the purpo!'te of subsection (2) of section 42 clause 7--consequential to the amendment of section 42 of the reserve bank of india act, 1934 section 43 is sought to be amended to enable the reserve bank to publish a consolidated statement each fort~ night, instead of each week as at present - clall~'e h-this clause seeks to amend section 45h of the reserve bank of india act, 1934 consequent to an amendment to section 5 j of the banking regulation act, 1949 (vide clause 40( a)( ii)] clause 9-this clause seeks to amend clause (bb) of section 451 of the reserve bank of india act 1934 which contains the definition of the term "deposit" the definition of the term "deposit" is being widened so as to include any receipt of money by way of deposit or loan or in any other form, bul specifically excluding certain types of deposits mentioned therein so as to enable individuals and unincorporated associations and firms to obtain funds or advances for their legitimate business clause to-this clause seeks to insert new chapter iiic containing sections 45r 45s and 45t in the reserve bank of india act, 1934 section 45s seeks to provide that no individual or firm or an unincorporated association of individuals shah at any time have deposits from more than the number of depositors mentioned therein section 45t seeks to vest in the officers of the reserve bank or the state governmellts, autho~ rised in that behalf the power to obtain search wart ant from courts so as to enable them to enter into and search any premises suspected to be used for the purpose connected with the receipt of deposits in contravention of the act such a warrant shall be executed in the same way and shall have the same effect as a search warrant issued under the code of criminal procedure ] 973 ' / cloll\cs i 1 and 12-these clauses seek to amend respectively section 58b and section 5se of the reserve bank of india act, ] 934 with a view to providing for penalties for contravening the provisions of new section 455 uf that act (vide clause 10) clause j 3-this clause seeks to amplify the existing definitioll in section 5 of the banking regulation act, 1949 of the term "approved securities" it also seeks to incorporate in that section the definitions of the terms "corresponding new bank", "development bank", "exim bank", "reserve bank", "sponsor bank" and "state bank of india" clause 14-this clause seeks to amend section 7 of the banking regulation ~ct, 1'49, so as to clarify therein that no company other than a bankmg company shall use any of the words, viz, "bank", "banker" or "banking" as part of its, name, or in connection with its business \ clause ] 5-this clause seeks to amend section 8 of the banking regulation act, 1949 in pursuance of the recommendation of the banking commission, to provide that the provisions of the said section do not hit the business which the central government may specify under section (i (1 )( 0) thereof as a form of business in which it is lawful for a banking company to engage clallse 1 (i-this clause seeks to' insert a new sub-section (2a) in section loa of the banking regulation act, 1949 'so as to provide that a director of a banking company other than its chairman or woholetimc direc-~ tor, by whatever name called, shall not hold office continuously for a period exceeding 8 years it also seeks to provide that if a chairman or other wholetime director of a banking company is removed from office as such chairman or wholetime director he shah also cease to be a director of the banking company and shali not be eligible to be appointed as director of such banking company for a period of four years from the date of his ceasing to be the chairman or wholetime director, as the case may be clause 17-this clause seeks to amend section 10b of the banking regulation act 1949 so as to provide that one of the directors of tke banking company shah be the chairman of its board of directors this clause further seeks to provide that a chairman whose term of office has come to an end in certain circumstances shall, subject to the approval of the reserve bank, continue in office until his 'successor assumes office clause t 8-this clause seeks to insert a new section iobb in the banking regulation act 1949; so as to empower the reserve bank to appoint any person as the chairman of a banking company when the office of its chairman remains vacant for a long time and when in the opinion of the reo;erve bank, the interests of the said banking company are likely to be adversely affected by the said office so remainin~ vacant clause 19-this clause seeks to substitute section toc of the banking regulation act, 1949, so ac; to provide that a chairman of a banking company, whether appointed by the banking company itself or by the reserve bank, and a director of a banking company appointed by the reserve bank under section loa of that act, shall not be required to hold any qualification shares in the banking company clau~e 20--"section i od of the banking regulation act 1949 is being amended as a result of the introduction of new section 10bb in the same act (vide clause 1 r) clause 2 i-this clause ~,eeks to substitute section 18 of the banking regulation act, t 949 so as to provide in accordance with the recommendation of the banking commission in this behalf that the ca'ih reserve, which every non-scheduled banking company is required to maintain in india shah be maintained by it with itself or with the reserve bank only and not with the reserve bank or the state bank of india or any other bank notified by the central government in this behalf a'i is provided) at present this cash reserve is to be maintained on the basis of the 3 per cent of the total of the demand and time liabilities in india as on the last f~day of the second preceding fortnight instead of calculating the same with reference to each day's demand and time liabilities further, the monthly return shall, henceforth, show the amount so held on alternate fridays during a month instead of showing the amount so held on fridav of each week at the same" time it seeks to introduce the concept of "net balance" for the purpose of arriving at the amount of "balance in current accounts" which is to be treated as liquid asset· in terms of this provision each bank will be required to work out the difference between the balance held by it in current accounts with the public sector banks anrl the b~lan~es wh~ch the pu~hc sector banks may have in current accounts with 1t and mc1ude ~n its hquld assets only the excess if any, of ~he former over ~~e l~!t~r  1 he ~l,~use fu~her seeks to modify the definition of the term habdltjes tn ircija occurrmg in the "explanation" below existing section 18 of the aforesaid act in respect or which minimum cash balances are to be m'aintained by every banking company, not being a scheduled bank in the case of a banking company, not being a scheduled bank, only the net liability of that ban~ to the enti~e b~nking system, that is after deduction of the balances mamtamed by it with all other banks fr~m its gross liabilities to all those other banks, will be deemed to be its liability to these banks, for the purpose of section 18 this exp/~nation also applies to all banks for th~ purpose of section 24 of the said act the explanation is further modlhed to ensure that loan from a sponsor bank by a regional rural bank is excluded for purposes of calculating statutory liquidity ratio under sect inn 24 of the bunking regulation act, 1949 the clause also seeks to authorise the reserve bank to settle any dispute or doubts that may arise in classifying transactions as liabilities clause 22-this clause seeks to amend section 19 of the banking regulation act, 1949, so as to amplify, in pursuance of the recommendation of the banking commisskn, the scope of the said section with a view to enlarging the purposes for which a banking company can form subsidiaries a banking company would, n()w be permitted to form subsidiaries for carrying on one or more kinds of business which it is r~plilitted to engage in under clauses (a) to (0) of section 6 ( 1) of the said act at present, a banking company is not permitted to form subsidiaries except for undertaking and executing trusts, administration of estates as executors and for doing banking business outside india clause 23-this clause seeks to amend section 20(1)(b)(iil) of the banking regulation act, 1949, so as to provide that a banking company is precluded from granting any loans or advances to a company when the banking company's director is a director, managing agent, manager, employee or guarantor of such company or its subsidiary or holding coin· pany or in which such director holds substantial interest clause 24-this clause seeks to insert a new section 21a in the banking regulation act, 1949, so as to provide that rates of interest charged by banking companies to the debtors shall not be r~opened in a court notwithstanding anything contained in the usurious loans act, 1918, or any other state law relating to indebtedness clsuse 25-this clause seeks to amend sub-section (3) of section 22 of the banking regulation act, ] 949, so as to widen the scope of the matters which the reserve bank may consider before granting a licence to a company to can)' on banking business in india and also insert 'a new sub-section (3a) which is basad on the existing clause (c) of sub-section (3) a consequential amendment is also being made to clause (iii) of sub-section (4) of that section cla~se 26-this clause seeks to amend section 24 of the banking regulation act, 1949, so as to empower the reserve bank to increase the statutory liquidity ratio which the scheduled and non-scheduled banks are required to maintain in india, from the ·present statutory minimum limit of 25 per cent to a maximum of 40 per cent of their total demand and time l~abilities ~ india with reference to the last friday of the second prece~li1g fortmght the ~lause further seeks to modify the mode of yaluatlon of approved securities fo~ the purpose of statut0l1' liquidity ratio m pursuance of the recommendations of the working group on public debt management set up by the reserve bank hence section 24 is bein~ amended with a view tc? giving reserve bank an en~blmg power to specify the mode of the valuation of approved securities in accordance with policy req~irements a~ ex!"anation is also added 'to provide that the market pnce shall be the price as on the date of issue of the notificatiofl or as on any earlier or later date as may be notified from time to time by the reserve bank in respect of any class or classes of securities th~ r reserve bank of india is also sought to be empowered to charge peaai interest if there is a default in the maintenance of the minimum statutory liquidity ratio the clause a~so includes amendme~ts consequential to the amendments proposed to section 1 8 of the act (ville clause 21) clause 27-this clause seeks to amend section 29 of the banking regulation act, 1949, so as to cja!ify th~t the period specifi~ in subsection (3) of section 210 of the compames act, 1956, relating to preparation of the balance-sheet and profi! and i~ss a~count shall, in !he case of a banking company, be the penod endmg with the last working day of the year immediately preceding the year in which its annual general meeting is held clauses 28 and 32-1n view of the insertion and revision of certaiu definitions in section 5 of the banking regulation act, 1949 (vide clause 13), consequential amendments arc being made to sections 34a and 36ad of the said act qlause 29-this clause seeks to amend section 35 of the banking regulation act, 1949, for the following purposes:-(i) to clarify that the reserve bank has always been empowered to conduct scrutiny of the affairs of banking companit!s in addition to conducting regular inspection under that section; (ii) to empower an officer conducting scrutiny to have the same powers as that of an inspecting officer under that section; and (iii) to provide that the reserve bank shall furnish a copy of the scrutiny report to the banking company if it makes a request or if any adverse ~ction is contemplated against the banking company clause 30-this clause seeks to amend section 35b of the bankinc regulation act, 1949, so as to make the reserve bank's approval necessary for any change in the maximum permissible number of directors of a banking company it also seeks to remove the existing dual control in regard to the managerial remuneration in the case of a banking company, one by the reserve bank under section 35b of the banking regulation act, 1949 and the other by the government of india in the circumstances mentioned in sub-section (4) of section 198 of the companies act, 1956 clause 31-this clause seeks to amend section 36ab of the banking regulation act, 1949, so as to remove the limit on the number of additional directors which the reserve bank can appoint on the board of a banking company under that section clause 33-under section 464 of the companies act, 1956, as amended in 1960, the earjier powers given to the liquidator have been withdrawn and the high court has been empowered to exercise a discretion for appointing a committee of inspection this clause seeks to make consequential amendments to ~cction 42 of the banking regulation act 1949 ' clause 34-ln addition to making some textual changes in section, 45 of the banking regulation act, 1949, this clause seeks to amend-(i) sub-section (8) of the aforesaid section so as to make it clear that the sc~em~ of am~lgamation of one banking, company with any bankiilg mstltution shall also be bmding on the trustees or other ~sons managing, or in any other manner connected with, ajjy provuient fund or other fund maintained by any such company or the transferee bank~  (ii) sub-s~tion (15) of the said section with a view toconfinmg the scope of the definition of the term "banking institution" to ~y banking company including the state bank of india, a subsidiary bank or a corresponding new bank; and  (iii) the said section by adding an explanation thereto so as to avoid a claim by an employee of the transferor bank that he should be given in the transferee bank the same ''rank or status" as he had in the transferor bank at the time of amalgamation clause 35-this cla'bse seeks to amend section 45a and section 451 of the banking regulation act 1949 respectively, so as to replace references to the code of criminal procedure, 1898, by references to the code of criminal procedure, 1973 and to make amendments to omit reference to jury trial clause 36-this clause seeks to amend section 45s of the banking regulation act, 1949, so as to replace the reference to chief presidency magistrate or the district magistrate by a reference to chief metropolitan magistrate or the chief judicial magistrate respectively these amendments are necessitated by the coming into force of the code of criminal procedure, 1973 clause 37-this clause seeks to insert a new part consisting 0: sectionlt 45y, 45z, 45za, 45zb, 45zc, 45zd 45ze and 45zf in the banking regulation act, 1949, based on the recommendations of the banking commission, so as-' (i) to empower the central government to frame rules specifying the periods of preservation of various types of records such as books, accounts and documents required to be maintained by a bankin2 company as also of the different instruments paid by it (section 45y); (ii) to enable a banking company to return at the request of a customer (including government departments and statutory corporations) a paid instrument, before the prescribed preservation -period only after making and ~eeping in its possession a true copy thereof made by mechanical processes (section 45z); (iii) to empower a banking company to make payment to the nominee of a d~positor or the person appointed under sub-section (3) of the new section 45za -of the amount to his credit, in the event of the death of the depositor (section 45za); (iv) to protect a banking company against any 'claim of the third party to the deposit (section 45zb): (v) to emlble a banking company to retum the m'ticles kept by a person in its safe custody to the nominee or the person appolnted under sub-section (2) of new section 45zc in the event of the death of th person leaving the articles in safe custody, after making inventory of the articles in the manner directed by the reserve bank, the inventory being signed by the person receiving the articles (section 45zc); (vi) to protect a banking company against any claim, to any articks, made by any person other than the person who placed the article in safe custody with the banking company (section 45zd); (vii) to enable a banking company to release the contents of a safety locker to the nominee ~r survivor of the hirer of such locker in the event of the deafh o€ the hirer, by making an inventory of the contents of a safety locker in the manner directed by the ~eservc bank the inventory being signed by the nominee or the survivor as also to protect the banking company against any liability for so releasing the contents of the locker (section 45ze); (viii) to protect a banking company against any claim to the contents of a safety locker made by any person other than ~e hirer of such locker who placed the articles in the safe custody with the , banking company (section 45zf) clause 38-this clause, besides making changes in sub-section (2) of section 46 of the banking regulation act, 1949 as consequent to amendment proposed vide clause 29, seeks to substitute sub-section (4) of the said section so as to make a failure to comply with any requirement of that act or of any order,,'rule or direction made thereunder or a failure to carry out the terms of an amalgamation sanctioned under section 45, as offences punishable with fine under section 46 clause 39-this clause seeks to amend section 47 of the banking regulation act, 1949, to substitute old functionaries under the code of criminal procedure, 1898 by new functionaries under the code of crimi· nal procedure, 1973 clause 40-this clause seeks to amend section 51 of the banking re~ation act so as:-(i) to make the prohibition contained in section 20 thereof against making advances to companies having a common director, inapplicable to advances by the public sector banks to companies in which the central government or the reserve bank or a corporation owned by that bank holds 40 per cent or more of the paid-up capital; (ii) to extend the statutory protection given by clause (c) of the proviso to section 51 thereof to an officer of the central government or the reserve bank or the state bank who may be nominated on the board of a corresponding new bank or a regional rural bank or any subsidiary bank or of a banking company and also to an officer of a corresponding new bank or a regional rural bank or a subsidiary bank who may be nominated as director on the board of any of the said banks; and (iii) to provide that a rule or direction made under the ace shall also apply to the state bank of india, any corresponding new bank, a regional rural bank and a subsidiary bank other amend· ments proposed to be made by this clause are of a consequenti~ nature clause 41-this clause seeks to amend section 52 of the banking regulation act, 1949, so as to provide for laying of rules made by the central government under the aforesaid act before each house of parlia-~ent t~e a!llendment also seeks to dispense with the condition of pre-vious publication of the rules to be framed under this section clau~e 42:-section 56 of the banking regulation act, 1949, specifies the modi~cations to certain sections of the act in their application to co-operative banks this clause deals with the modifications of the relev~t sections as a result of the proposed amendments to the banking regulation act the important -modifications are:  (i) the proviso 'proposed to be substituted for the existing pro-viso to section 8 (relating to prohibition of trading) provides that the period of completing any business referred to in 'that section wi]) be extended only up to the expiry of one year from the commencement of the amending legislation  (ii) the provisq!; proposed to be substituted for the second pro-viso to section 9 empower the reserve bank to extend the period of seven years for ~hsposl\l of non-banking asse,ts of a co-operative bank, if the reserve bank is satisfied that such extension would be in the interests of the depositljrs of the co-operative bank (iii) clause (j) of section 56 of the banking regulation act, 1949, which amends section 18 of the said act, in its application to co-operative societies, is being substituted by a new clause, the amendments being on the lines similar to the amendments to section 18 of the banking regulation act, as applicable to commercial banks (vide clause 21) this is to provide that the cash reserve of 3 per cent is to be maintained with reference to demand and time liabilities as on the last friday of the second preceding fortnight instead of calculating the same with rcference to each day's demand and time liabilities further, the monthly return submitted by co-operative banks shall show the position as on alternate fridays instead of every friday (iv) section 24, as applicable to co-operative banks is being amended to empower the reserve bank to increase the percentage of the statutory liquidity ratio from 25 per cent to 40 per cent maximum of the total of the demand and time liabilities in india as on the last friday of !he second preceding fortnight and also to change the period fur filing the returns showirg the position on alternate fridays instead of every friuay the sub-clause further seeks to umend the section as applicable to co-operative banks on the lines similar to the amendments to section 24 of the banking regulation act, 1949 as applicable to commercial banks (vide clause 26) in the matter of valuation of approved securities for the purpose of statutory liquidity ratio (v) a new section-section 24a-is proposed to be inserted empowering the reserve bank to exempt, by notification, any cooperative bank or class of co-operative banks from the applicability of the whole or any part of the provisions of section 18 or section 24 of the act with reference to all or any of the officei of such co-operaj tive bank or co-operative banks or with reference to the whole or any part of the assets and liabilities of such co-operative bank or co-operative banks and for such period and subject to such conditions as may be specified in the notification   , (vi) clause (d) of sub-section (1) of section 3b is proposed to be substituted by a new clause which would enable the reserve bank to depute one or more of its officers to watch the proceedings at any meeting of the board of directors of a co·operative bank or to appoint its officers to observe the manner in which the affjlirs of the co-operative bank or its offices or branches are conducted and make a report-thereon clause 43-this clause seeks' to insert a new section 35a in the state bank of india act, 1955, with a view to providing certain protection to - directors appointed by the state bunk on the boards of companies assisted by it against prosecution as a re<;ult· of non-compliance with the provisions contained in the companies act, 1956, or in any other law 0; in the memorandum or articles of association it further seeks to provide that such a director shall hold office during the pleasure of the state bank and may be removed by it further, such a director will not incur any obli-~ation or liability by reason only of his being a director or for lidything done or omitted to be done in good faith in the discharge of his duty as a director it alsl) provides that such director shall not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement clause 44-this clause seeks to amend sect jon 40 of the state bank of india act, 1955, so &'l to provide for a report by the central board on the working and activities of the state bank it also seeks to provide for laying before each hou~e c?f parliament the auditor's r~port ~nd the ~eport on the working and activities of the state bank of india, as 15 done in the case of the nationalised banks claltse 45-the amendment to section 42 of the state bank of india act, 1955, is consequential to the amendment proposed to ~ction 40 of the act by clause 44 clause 46-this clause seeks to amend section 43 of the state bank of india act, 1955, so as to empower the central board of the bank to delegate by general or special order the powers to the officers of the bank clauses 47 and 48-these clauses seek to amend section 49 and section 50 respectively of the state bank of india act, 1955, so as to provide for laving of rules and regulations made under the aforesaid act before each house of parliament clause 49-the national bank for agriculture and rural development act 19r 1 has amended section 45 of the reserve bank of india act, 1934 and accordingly the reserve bank has been empowered to appoint subsidiary banks also to act as its alzents in the absence of an explicit provision in the state bank of india (subsidiary banks) act, 1959 enabling the said banks to undertake such a~ency business, it is necessary to 'incorporate a new section 36a in the said ae;t for the purpose clause 50-this clause seeks to insert a new section 38a in the state bank of india (subsidiary banks) act 1959 (on the lines of new section 35a proposed to he inserted in the state' bank of india act, 1955, by clause 4~) with a vie iv to providing certain protection to directors appointed bv a subsidiary bclok on the boards of companies assisted by it against pros('cutic'o ns a result of non-compliance with the llt'ovisions contained in the companies act, 1956 or in any other law for the time being in force or in the memorandum or artic1~ of association it further seeks to provide that such a director shall hojd office during the plea!ilure of the subsidiary bank and may be removed by it further such a (iirector will not incur any obligation or liability by rea'\on only of his bein~ a director or 'or anything done or omitted to be done in good faith in the dischanze of his duty as a director it also nrovides on the jines of new section 35a that such director shall not be liable to retirement by rotation clause 5t-this clause seeks to make some verbal amendments to section 43 of the state bank of india (subsidiary banks) act, 1959 and also to provide for the auditors' reoort and the reoort bv the board of directors on the working and activities of 'a subsidiary bank being laid before each house of parliament c~a,~se 52-the amendments to section 44 of the state bank of india c~~~~:l~ltry banks) act, 1959 are consequential to t~~a~l1en_d':;!,~: clause 53-this clause seeks to amend section 53 of the" state bank of india (s?bsidiary banks) act 1959, with a view to providinl:{ that the officer nof!1mated by th~ state bank as a director of its suhsidiary bank s~al1 dot mcur any ?bhgation or liability by reason only of his &ein~' a d!fector or for anvthldj% done or omitted to be done in good faith in the discharge of his duty as a dir~tor ,clauses 54 a~ld 55-these clauses seek to amend section 62 and section 63 respectively of the state bank of india (subsidiary banks) act, 1959, ~o as to provide for laying of rules and regulations made under the aforesaid act before each house of parliament clause 56-this clause seeks to amend the definition of the term "jn~llrcd bank" in clause (i) of section 2 of the deposit lnsuranc~ and credit guarantee corporation act, 1961 so as to include therein a corresponding new bank constituted under the banking companies acquisition and transfer of undertakings) act, 1970, a<; also a corresponding new bank constituted under the banking companies (acquisition and transfer of undertakings) act, 1980 since clause (i) of section 2, as substituted by the de!,osit insurance corporation ( amendment) act, 1968 which came into force from the 1st july, 1971 did not include a reference to corresponding new banks constituted under the first nationalisation act, 1970, the amendment is sought to be made with retrospective effect from the 1st july, 1971 in respect of such banks in section 2(i), subclause (i) is also being substituted as an amendment consequential to the amendment of section 13 by the nationalisation act, 1970 being retrospective with effect from the 19th july, 1969, which is the date on which the nationalisation act 1970 came into force this clause also makes amendments consequent on certain amendments by clause 40 clause 57-this clause seeks to provide that the capital of the deposit insurance and credit guarantee corporation may 1?e raised to rs 50 crores instead of rs 15 crores as at present clause 58-this clause seeks to amend sub-section (2) of section 6 of the deposit insurance and credit guarantee corporation act, 1961 with a view to providing that the additional directors appointed under section 6 ( 1 ) ( e) of the act shall hold office for a term not exceeding four - years as may be specified by the central government it also seeks to provide that such director whose term of office comes to an end shall continue in office until his successor assumes office further, it seeks to amend sub-section (3) of section 6 of the act so as to provide that a director nominated by central government under clause (e) of sub-section ( 1) of section 6 shall not be capable of being nominated as a director in the circumstances indicated in sub-section (3) it further seeks to insert a new sub-section (5) so as to provide that the seat of a director nominated under clause (e) of sub-section (1) of section 6 shall become vacant in specified circumstances clause 59-this amendment is consequential to certain amendments by clause 40 clause 60-this clause seeks to amend sub-sections (2) and (3) of section 13 of the ~posit insurance and credit guarantee corporation act, 19,61 so as to omit the reference to clause (b) on the ground that the prov!sions of section 22 of the banking regulation act, 1949, are not applicable to the corresponding new bank vide section 51 of that act clause 61-consequent upon the proposed amendment to section 56 ( 0) of the banking regulation act 1949 [section 22 (2) of the said act as applicable to co-operative banks vide clause 42(vii)] this clause seeks to introduce a new sub-clause (iii) in clause (b) of sub-section (2) of section 13a in the deposit insurance and credit guarantcc corporation act, 1961 with a view to extending insurance coverage to deposits with such banks as mentioned in the said section 22(2) ~ clause 62-this clause seeks to amend section 16 of the deposit ~nsu!ance and credit guarantee corporation act, 1961 retrospectively m view of amendment of section 13 by the nationalisation act, 1970 clause 63-this clause s~eks to make textual changes in sub-section (2) of section 3~ of the deposit insurmcc i and credit guarantee corporation act, 1961, with regard tu laying of certain r\!ports before each house of parliament clause 64-this clause seeks to amend section 50 of the deposit insurance and credit guarantee corporation act, 1961, so as to provide for laying of regulations made under the aforesaid act before each house of parliament  clause 65-this clause seeks to make certain textual ch<lngcs in section 3 of the banking, companies (acquisition and trarlsfcr of undertakings) act 1970 further, the national b!lnk for agriculture and rural development act, 1981 has amended section 45 of the reserve bank of india act, 1934 and accordillgly, the reserve bank has been empowered to appoint a corresponding n~w bank to act as its agent in the absence of explicit provisions in the banking companies (acquisition and transfer of undertakings) act, 1970 enabling 1 corresponding new bank to undertake such agency busine~s, it is necessary to incorporate a new subsection ~" clause 66-this clause seeks to insert a new sub-section in section 9 of the banking companies (acq\lisition and transfer of undertakings) act, 1970 so as to specifically provide that a scheme made under section 9 of that act shall be binding on the creditors, depositors, employees and , other persons affected by it this clause further seeks to incorporate a;" , defmition of the term "banking institution" in the said section 0n the lines of definition in sub-section (15) of section 45 of the banking regulation act, 1949, as proposed to be amended by clause 34 it also s,eeks to amend sub-section (6) relatirig to laying of scheme before parliament clause 67-this clause seeks to introduce two "explanations" in section 10 of the banking companies (acquisition and transfer of undertakings) act, 1970 on the lines of the corresponding provisions in the companies act, 1956 dealing with the scope of the auditors' reports in the matter of certifying that the balance-sheet exhibits a true and fair view of the affairs of the nationalised bank concerned this clause further seeks to insert new sllb-section (7 a) in section 10 so as to rationalise the existing arrangements regarding the furnishing of its annual balance-sheet and accounts together with the auditors' report and the annual report on its working and activities by each nationalised bank to the central government it also seeks to make certain textual changes in sub-section (8) of the said section relating to laying of reports before parliament it also seeks to insert new sub-section (9) in section 10 of the act so as to empower the central government to appoint, at any time, such number of auditors as it thinks fit to examine and report on the accounts of a nationalised bank clause 68-' this clause seeks to insert a new se~tion 16a in the banking companies (acquis~tion and transfer of undertakings) act, 1970 (on the lmes of new secbon 35a proposed to be inserted in the state bank of india ~ct, 1955, by clause 43) with a view to providing certain protection to directors appointed by a nationalised bank on the boards of comp~ies i assiste~  by it ag~inst prosecution as a result of noq-com-pliance with the provisions contamed m the comparues act, 1956 or in any other law or m the memorandum or article:; of association it further seeks to provi~e that such a director shall hold offi~e during the pleasure of the nationalised bank and may be removed by it further, such a director will not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in' good faith in the discharge of his duty as a director it also provides on the lines of new section 35a that such director shall not be liable to retirement by rotation clause 69-thls c1ause seeks to amend section 19 of the bankinjt companies (acquisition and transfer of undertakings) act, 1970 so as to provide for the layinjt of regulations made by the board of directors of a corresponding new bank under the aforesaid act before each house of parliament clause 70-1111s clause seeb to amend section 30 of the regional rural banks act, 1976, so as to provide that regulations made under that act shall be laid before each house of parliament clause 71-this c1au!~e seeks to make certain textual changes in section 3 of the bankine; companies (acquisition and 'transfer of undertakings) act, 1980 further the national bank for agriculture and rural development act 1981 haq amended section 45 of the reserve bank of india act 1934 and accordingly the reserve bank has been empowered to appoint a correspondtne; new bank to act as its agent in the absence of explicit provisions in the 'ranking companies (acquisition and transfer of undertakings) act 1980 enabling a correspondinr new bank to undertake such agency business, it is necessary to incorporate a new sub-section clause 72-this clause seeks to insert a new sub-section in section 9 of the ban king companies (acauisition and transfer of undertakings) act 1980 so as to specifically provide that a scheme made under section 9 of that act shall be binding on the creditors depositors employees and other persons affected by it this clause further seeks to incorporate a definition of the term "bankin~ institution" in the said section on the lines of definition in sub-section (15) of section 45 of the banking regulatiod act, 1949, as proposed to he amended by clause 34 clnu,e 73-this claus/" seeks to introduct" two "explanatio1ls" in section 1 0 of the 'rankinl! companieq (acquisition and transfer of undertakings) act, 1980 on the lines of the correspondin~ provisions in the companies act 1956 dealing with the scope of the auditors' r~port in the matter of certifying that the halance-sheet exhibits a true and fair view of the affairs of -the nationalised bank concerned this clause further seeks to insert new sub-section (7 a) ;n section 10 so as to rationalise the existing arrang~ments reparding the furnishing of its annual balance-sheet and accounts tovether with the auditors' reoort and the annual report on its workin~ and activities bv each nationalised bank to the central government it also seeks to make certain textual chane:es in sub-section (8) of the said section relating to layinl': of reports before parliament it also seeks to insert new suh-section (9) in section 10 of the act so aq to empow~r the c:entral government to appoint at any time such number of auditors as 1t thinks fit to examine and report on the accounts of a nationalised bank clause 74-this clause seeks to insert a new section 16a in the banking comp~nies (acquisition and transfer of undertakings) act 1980 (on the hne~ of new section 35a proposed to be inserted in the state bank ~f india act 1955-vide dause 43) with a view to providing - protection to directors appointed by a nationalised bank on the boards of c,!mpanies as~i~tcd by it ~gain~t prosecution as a requ1t of non-compliance with th: prowaons cont:uned in the companies act 1956 or in any nther jawor m the memorandum or articj~s of association it further seeks to provide that such a director sh~n hold office during the pleasure of the nationalised bank and may be removed by it further, such a director will not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duty as a director it also provides on the lines of new section 35a that such director shall not be liable to retirement by rotadon  • "" it i"'ii''1  !billi",,: clause 75-this clause seeks to amend section 19 of the banking companies (acquisition and transfer of undertakings) act, 1980 so as to provide for the laying of regulations made, by the board of directors of a corre~onding new bank under the aforesaid act before each house of parliament clause 6, sub-clause (b), of the bill seeks to amend sub-section (ia) of section 42 of the reserve bank of india act, 1~4 $0 as to empower tb:e reserve bank to specify, by notification in the gazette of india, different dates in respect of banks subsequently included in the second schedule to that act sub-clause (c) of that clause seeks to insert sub· section (ic) in section 42 of the said act enabling the reserve bank to specify from time to time any transaction or class of transactions which shall be regarded as liability in india of a scheduled bank clause 13 of the bill seeks to amend the definition of "approved securities" in section 5 of the banking regulatk~ act, 1949, as mepning, inter azia, such of the securities authorised tly' the central government under clause (f) of section 20 of the ndian trusts act, 1882 as may be prescribed by rules made by the central government under the banking regulation act, 1949 ,lo  1 ,;" cla'use 21 of the bill and clal,lsc 42· as applicable to co-operative 80-cieties seek to substitute section 18 of the banking regulation act, 1949 clause (d) of the explanation to sub-section (1) of the said section 18 empowers the central government to notify financial institutions for the purposes of that clause sub-section (2) of the said section 18 empowers the reserve bank to specify any transaction or class of transactions to be regarded as liability in indla of a banking company or a cooperative bank, as the case may be, for the purposes of section 18 and section 24 of the banking regulation act, 1949 clause 26 of the bill and clause 42 as applicable to co-operative societies, seek to amend section 24 (2a) (a) of the banking regulation act, 1949 so as to empower the reserve bank to increase the liquidity ratio from the present statutory minimum limit of 25 per cent up to a limit not exceeding 40 per cent, as may be specified by the reserve bank ill the notification the relevant clauses also provide for banking companies and co-operative banks furnishing a special return in the prescribed form and manner further, the reserve bank is empowered to specify the mode of valuation of securities to be adopted by banks for the purpose of section 24 of the bankini regulation act, 1949 clause 37 uf the bill seeks to insert a new section 45y in the bank, ing regulation act, 1949, which empowers the central government, after consultation with the reserve bank to make rules specifying the periods for which banks shall preserve and keep their books, accounts and other documents as well as different instruments paid by them different periods may have to be fixed for different types of records, depending upon the nature of each record, and keeping in view the needs' and practical difficulties of the banks, and usefulness in connection with tax and other regulatory proceedings this clause further seeks to insert new sections 41)za, 45zc and 45ze in the bankhlg regulation act, 1949, in pursuance whereof, the depositors of banks, persons leaving articles in safe custody  with banks, and hirers of safety lockers from banks are given the right of nomination in the manner prescribed by rules made by the central government 'under the said act th~ nomination so made can also be varied or ckncellcd in the prescribed manner the said sections 45zc and 45ze also require the banks to prepare, in such manner as may be directed by the rcflerve bank, an inventory of articles returned to claimants clause 42 of the bill seeks to insert a new section 24a as applicable to co-operative societies for empowering the fleserve bank to exempt, by notification, any co-operative bank or class of co-operative banks from the applicability oi the whole or any part of the provisions of section 18 or section 24 of the act, with 'reference to all or any of the omccs of such co-operative bank or co-operative banks, or with reference to· the whole or any part o~ the assets and liabilities of such cooperative bank or co-operative banks, and for such period and subject to such conditions as may be $pecified in the notification clause 46 of the bill seeks to amend section 43 of the state bank of india act; 19550 so as to provide for delegation of powers to the officers of the bank also by general or special ilrders made by tlle central board of the bank   the matters in respect of which an authority is empowered to issue any authorisation, notification or order or to make l"'lles, relate to matters of procedure and administrative details the delegation of legislative power is, therefore, of a normal character  annexure ex·1'racts from the bankfrs' books evidence act, 1891 - (18 of 1891)'" '" '" '" - ) 2 in this act,· unless there is something repugnant in the subject or deftnicontext,-tlona '" '" '" '" '" (4) "legal proceeding" means any proceeding or inquiry in which evidence is or may be given, and includes an arbitration: '" '" '" - - (8) "certified copy" means a copy of any entry in the books of a bank together with a certificate written at the foot of such copy that it it; a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business, and that 'such book is still in the custody of the bank, such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and oftlcial title - '" '" - '"  extracts from the reser've bank of india act, 1934 (2 of 1934) - '" '" '" •17 the bank 'shall be authorised to carry on and transact the several kinds of business hereinafter specified n~ely:-business which the bank may trmsact '" '" '" '" - (4b) the making to the industrial finance corporation of india of loans and advances,-'" - - - - (b) repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the central government· of any maturity or against bonds and debentures issued by the said corporation and guaranteed by the central government and maturing within a per~od not exceeding eighteen months from the date of such loan or advance: provided that the amount of loans and advances granted under clause (b) shall not at any time exceed three crores of rupees in the aggregate; - - - - - 33 (1) - - - - - a~tsnf ~ i •• uede-~rtmen, (6) for the purposes of this section, the foreign securities which may be held as part of the assets shall be-i (i) securities of the following kinds payable in the currency of any foreign country which is a member of the international monetary fund, namely:-(a) balances with the bank which is the principal currency authority of that foreign country and any other balances or securities in foreign currency maintained with or issued by the international monetary fund, the international bank for reconstruction and development, the international development association or the international finance corporation or asian development bank or the bank for international settlements or any banking or financial institution notified by the central government in this behalf, provided that they are repayable within a period of ten years;  '" -   transactions in foreign exchal'l'ge 40 the bank shall sell to or buy from any authorized person' who makes a demand in that behalf at its bffice in bombay, calcutta, delhi or madras" or at such of its branches as the central government may, by order determine, foreign exchange at such rates of exchange and on such conditions as the central government may from time to time by general or special order determine, havdng regard so far as rates of exchange are concerned to its obligations to the international monetary fund: provided that no person shall be entitled to demand to buy or sell foreign exchange of a value less than two lakhs of rupees explanation-in this section "authorized person" means a person who is entitled by or under the foreign exchange regulation act, 1947, to 'i of 1947 buy, or as the case may be, sell, the foreign exchange to which his demand relates - - - - - 42 (1) every bank included in the second schedule shall maintain with the bank an average daily balance the amount of which shall not be less than three per cent of the total of the demand and ~e liabilities in india of such bank as shown in the return referred to in 'sub-section (2): cash reserves of'sche dult!d banks to be kept with the bank provided that the bank may, by notification in the gazette of india, increase the said rate to such higher rate as, may be specified in the noti-slcation so however that the rate shall not be more than fifteen per cent of the total of the demand and time liabilities explanation-for the purposes of this section,-(a) "average daily balance" shall mean the ,average of the balances held at the close of busine~s on each day of a weeki (b) "week" shall mean the period from saturday to the followini friday,  both days inclusive; , (c) "liabilities" shall not include-- - - - - (iii) in the c~ of a state co-op~rauvebank also any loaa taken by such bank from a state government and any deposit of money with such bank representing the reserve fund or any part thereof maintained with it by any co-operative society within its area of operation; ·   - - - (d) the aggregate of the "liabilities" of a scheduled bank which is not a state co-operative bank, to,-- -  - - ~ of 1970 (iii) a corresponding new bank 'coq,stituted by section 3 of the banking companies (acquisition and transfel" of undertakings) act, 1970; -   - - shall be reduced by the aggregate of the liabilities or all such banks and institutions to the scheduled bank; (e) the aggregate of the "liabilities" of a scheduled bank which is a state co-operative ~, to,--   - - 50f 19'70 (iii) a corresponding new bank constituted by section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970; - - - - - shall be reduced by the aggregate of the liabilities of all such banks and institutions to the state co-operative bank -  - -  (2) every scheduled bank shall send to the bank a return signed by two responsible officers of such bank showing-(a) the amount of its demand and time liabilities and the amount of its borrowings from banks in india classifying them into demand and time liabilities; -  - -  at the close of business on each friday, and every such retwn shall be sent not later than five days after the date to which it relates: provided that the bank may, by notification in the gazette of india, delete or modify or add to any of the particulars specified in the foregoing clauses: provided further that where friday is a public holiday under the 01 1111 negotiable instruments act, 1881, for one or more offices of a scheduled bank, the re1:urn shall give the preceding working day's figures in respect of such office or offices, but shall nevertheless be deemed to relate tn that friday: provided also that where the bank is satisfied that the furnishing of a weekly return qnder this sub-section is impracticable in the case of any scbeduled bank by reason of the geographical position of the bank and its branches, the bank may allow such bank-(i) to furnish a provisional return for the week within the period aforesaid to be followled up by a final return not later than ten days after the date to which it relates, or (ii) to furnish in lieu of a weekly return 'd monthly return to be sent not' later than fourteen days afteor the end of the month to which it relates giving the details specified in thi's sub-section in respect of such bank at the close of business for the month (3) if the averap,l' daily balance held at th~ bank by a scheduled bank during any week is below the minimum prescribed by or under sub-'section (1)' or sub-section (la), such scherluled hank shall be liable to p~y to the bank in respect of that week penal interest at a rtlte of three pet" cent above the bank rllte on the amount by which such balance with the bank falls short of the prescribed minimum, and if during the next 'succeeding week, such avera~e daily bal'3nce is still below the prescribed minimum, the rates of penal interest shall be increased to a rate of five per cent above the bank rate in respect of that week and each subsequent week during which the default continues on the amount by which such balance at the bank falls short of the pre$_ed minimum (3a) when under the provisions of sub-'section ('l) penal interest at the increased rate of five per cent above the bank rate has become payable by a scheduled bank if thereafter the average daily balance held at the bank during the next succeeding week is still below the prescribed minimum,-" , (a) every director, manager or secretary of the scheduled bank who is knowin~lv and wilfullv a ~arty to the default shall be punishable with fine which may extend to five hundred rupees and with a further fine which m'av extend to five hundred rupee!; for each subsequent week durjn~ which the default continues, and (b) the bank mav prohibit the scheduled bank from receiving after the said week any fresh deposit and, if default is made bv the scheduled bank in complving with the prohibition referred to in clause (b) everv qirector and officer of the sche, duled bank who is knowinglv and wilful1v a party to such default or who throtlt!h neglil!enc'e or otherwise contributes to such default shall in resnect of pach such d('fault be punishable with fine which mav extend to five hundred rupees and with a furthf'!r flne which mav extend to flvp hundred rupees fot' each d'3v after the first on which a depo!';it received in contravention of such prohibition is retained by the scheduled bank e:rplanation-yj1! thi-::: sub-sertirm "officer" includes a manager, secretary, branch mnna~pr and hrnnch flecrl'tnry: - - - - - publica·· tionot consolidat eel stateme'nt by ~heau~ 43 the bank sh'311 'cnuse to hi> pl1hlisht'd ellc'!h wmlr n c'onsoliitated statement shmvinl:! theo ngf,i'e~:1b lhbilitl"!s and a~"1pt~ of all the' ~c'hf'~t11pd hanks top'pthpr, based o~' the' rptllrnc; ~md information received under this act or any other law for the time being in force - - - - - jooflm9 chapter mbnot to apply in certain cases 45r the provisions of this chapter shiill not apply to the state bank or a banking company as defined in section' 5 of the banking ~gulation act, 1949 or a banking institution notified under section 51 of that act or a regional rural bank or a co-operative bank or a primary agricultural credit society or a pri:mary credit society: 'provided that for the purposes of this chapter, the tamil nadu industrial investment corporation limited shall not be deemed to be a banking company deftni_ tiol1b  90tl8u 451 in this chapter, unless the context otherwise requires,-- - - - - (bb) "deposit" shall include, and shall be deemed always to have included, any money received by a non-banking institution by way of deposit or loan or in any other form, but shall not includ~ amounts raised, by way of share capital, or contributed as c8ipital by pa~:tners of a firm; ~ - - - - - (d) "firm" means a firm as defined in the indian partnership act, 1932, of which the capital subscribed by its partners' exceeds one lakh of rupees; cogni zanceot offencea (e) "non-banking institution" means a company, corporation, co-operative society or firm - - - - - 58e (1') no court shall take cognizance of any o1fence punishable under this act except upon a complaint in writing made by an officer of the bank, generally or specially authorised in writing in this behalf by the bank, and no court other than that of a metropolitan magistrate or a judicial magistrate of the first class or a court superior' thereto shall try any such offence  _ ! ~,,j - - - - -  extracts from the banking rlxmla'l'ion aur, 1949 (10 of 19(9) - • - • •5 in this act, unless there is anything repugnant in the subject or interprecontext,-_ tatmt 2 of 1882 (a) "approved securities" means securities in which a trustee may f invest money under clause (4) clause (b), clause (~) clause (c) i)r clause (d) of section 20 of the indian trusts act, 1882; - - - - (1) "reserve bank" means the reserve bank of india; - - - - - '1 (1) no company other than a 'banldng company shall use as 'part of 'its name any of the words "bank", "banker" or "banking" and nc;> company shall carry on the business of banking in india unless it \1si!'5 as part of its name at'least one of such words - - - - - use of words ''bank'', "banker", "banking" or "'bank mgcom peny·' trading bankin, company to be managed bywholr=, time chairman 8 notwithstanding anything contained in section 6 or in any contract, no banking company shall directly or indirectly deal in the huying 01' selling ,or bartering of goods, except in connection with the realisation of security given to or held by it, or engage in any u-ade, or buy, sell or barter goods for others otherwise than in connection with bills uf exchange received for collection or negotiation or with such of its busin(;ss a'd is referred to in clause (i) of sub-section (1) of section 6: provided that this section shall not apply to any such businessai  aforesaid which was in the course of being transacted on the cpnunence-, ment of this act, so however, that the said business shall be completed before the expiry of one ypar from such commencement explanation-for the purposes of this section, "goods" means every kind of movable property, other than  actionable claims, st9cks, shares, money, bullion and specie, and all instruments referred to in clause (a) of sub-section (1) of section 6 - - - - - lob (1) notwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company in existence on the commencement of section 3 of the banking laws (amendment) act, 1968, or which comes into existence thereafter shall hav>e a chairman of its board of directors who shall be entrusted with the management of the whole of the affairs of the banking com~any: provided that the chairman shall exercise his powers subject to the superintendence, control and direction of the board of directors: provided further that nothing in this sub-section shall apply to a banking company in existence on the commencement of the said ~tion for a ·period of three month's frem such commencement  - • - - - - (5) a chairman of the board of directors of a banking company may, by writing under his hand addressed" to the company, resign his office but shall continue in office until his successor assumes oftice - - - - ioc any director or chairman appointed by the reserve bank under section loa or section lob, as the case may be, shalt not be required to hold qualification shares in the banking company chairman or director appointed by the reserve baunot to be required to hold qualiftcatier! shares pro-vlsiorls of sections 10d any appointment or removal of a director or chairman in pursuance of section loa or section lob shall hav>e effect and any such person shall not be entitled to claim any compensation for the loss or termination of oftice, notwithstanding anything contained in any law ot in any contract, memorandum or articles ofsssociatiqn ~oa and lob to o-verride au other la1lts, eontraet6 etc 28 of 1881 - - - - - 18 every banking company, not being a scheduled bank, shall main-cash tain in india, by way of cash reserve with itself or in current account reserve opened with the res~rve bank or the state bank of india or any other bank noufied by the central government in this behalf or partly in cash with itself and partly in such account or accounts, a sum equivalent to at'lea'st three per cent of the total of ~ts time and' demand liabilities in india, and shall submit to the reserve bank before the fifteenth day of every month a return showing the amount so held on friday of each week of the preceding month with particulars of its time and demand liabilities in india on each such friday, or, if any such friday is a public holiday under the negotiable instruments act, 1881, at the close of b~siness on the preceding working day explanation-in this section and in section 24, "liabilities in india" shall not incltid~-(a) the paid-up capital or the reserves or any credit ba'ance in the proit and loss account of the banking company; 2 of 1934 (b) any advance taken from the reserve bank or from the state bank of'india or from the industrial development bank of india or from the export~import bank of india: or from the notional bank or from any bank notingd by the central go'lernment under clause (c) of the explanation to sub-section (1) of section 42 of the reserve bank of india act, 1934 restric_ tio'h on nature of aubsi diary companiee 19 (1) a banking company 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 undertaking of the 8dministration of estates as executor, trustee or otherwise, the providing of safe deposit vaults or, 'with the previpus permission in writing of the reserve bank, the carrying on of the business of banking exclusively outside india, or such other purposes as are incidental to the business of banking i - -    1 of 1956, 20 (1) notwithstanding anything to the contrary contained in section 77 of the companies act, 1956, no banking company shall-restrictionson loan98tld advances    " (b) e~ter into any commitment for granting any loan or advance to or on behalf of-- -   - 1 of 1956,  (iii) any company (not being a subsidiary of the banking company or a company registered under section 25 of the companies act, 1956, or a government company)· of which any of the directors of the banking company is a director, managing agent, manager, employee ,or guarantor or in which he holds substanti8i interest, or   - "  panies mainte· 'nance of a percentage ot assets zz (1) - - !ii - (3) befol'e granting any licence under ·thm section, the &!serve bank may require to be satisfled by an inspection of the books of the company or otherwiise that all or any of the following conditions are ful1ll1ed, name1y:- - -  - - (c) in the case of a company incorporated outside india that the carrying on of banking b~by sw:h 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 -  - -  (4) the reserve bank may ~ancel a licence granted to a banking company under this section--  - - - (iii) if at any time; any of the conditic>ns referred to in slib-sectiod (3) is not fulfilled: provided that before cancelling a licence under clause (ii) or clause (iii) of this sub-section on the ground that the banking company ha failed to:comply with or has failed to fulfil any of the conditions referred to therein, the reserve bank, unless it is of opinion that the delay will be prejudicial to the interests of the company's depositors or the public, shan grant to the company on ~uch terms as it may specify, an opportunity of taking the necessary steps for complying with or fulfilling such condition - - - - - 24 (1) after the expiry of two years from the commencement of this act every bankinf, company shall maintain in india in cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which 'shall not at the close of business on any day be less than 20 per cent of the total of its time and 'demand liabilities in india explanation-for the purposes of this section, "unencumbered approved securities" of a banking company shall include its approved securities lodged with another institution for an advance or any other credit arrangement to the extent to which such securities haye not been drawn against or availed of: - - - - - (2a) (a) notwithstanding anything contained in sub-section (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 2 of 198-4 '(i) a scheduled bank, in addition to the average daily 9ti1ance which it is, or may be, required to maintain under section 42 of the reserve bank of india act, 1934, and (ii) every other banking company', in addition to the cash ,reserve which it is required to maintain under section 18, shall maintain in lndia in cash, gold or unencumbered approved securities, valued at a price not exceeding the current, market price, an amount which shall not at the cl~ k of business on any day be leb's than 2s per cent of the total of its demand and time lipliuties in india; (b) in computing the amount for the purp>ses'of clause (a),-(0 the deposit required under sub-section (2) of 'section 11 to be made with the reserve bank by a banking company incorporated outside india, and (ii) any cash or balances maintained in india by a banking c0mpany 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 aggregate of the cash or balance or·both required to be maintained under section 18, and touts (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 in current account maintained in india by a scheduled bank with the state bank of india or with any other bank which may be notified in this behalf by the central government, shall be deemed to be cash maintained in india 21 of 1976 (2b) the reserve bank may, by notification in the official gazette, vary the percentage referred to in sub-section (2a) in ~--pect of a regional rural bank established under section 3 of the regional rural banks act, 1976 26 of 1881 (3) for the purpose of ensuring compliance with the provisions of this section, every banking company shall, not later than fifteen days after the end of the month to which it relates, furnish to the reserve bank in the prescribed form and manner a monthly return shpwing particulars of its assets maintained in accordance with this section, and its time and demand liabilities in india at the close of business on each friday during the month, or if any friday is a public holiday under the negotiable instruments act, 1881, at the clo'se of business on the preceding working day: provided that every regional rural bank shall also furnish a copy of the said return to the national bank - '" '" - - 34a (1)  '" - ' - production of docu mentsof confiden-tial dature i of 19'10 21 of 1976 of1980 (3) for the purposes of this section, "banking company" includes the export-import bank of india, the' industrial development bank of india, the national bank, the reserve bank, the state bank of india a corresponding new bank constituted under section 3 of the banking companies (acquisition and tran'sfer of undertakings) act, 1970, a regional rural bank established under section 3 of the regional rural banks act, 1976, a corresponding' new bank constituted under section 3 of the banldng companies (acquisition, and transfer of u~dertakings) act, 1980, and any subsidiary bank 35 (1) - - - - - (2) it shall be the duty of every director or cjther omcer or employee of the banking company to produce to any oftlcer making an inspection under sub-section (1) all such books, accounts and other documents in his custody or power and to furnish him with any  statements and information ,relating to the affairs of the banking company as the said officer may require of him within such time as the said officer may specify (3) any person making all inspection under sub-secticm (1) luay examine on, oath any director or other officer or employee of the banking company in relation to its business, and may administer an oath accordingly,  (4) the reserve bank shall, if it 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 of opinion after considering the report that the affairs of the banking company are being conducted to the detriment of the interests of its 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-(a) 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 central government may defer, for such period as it may think fit, the passing of an order under this sub-section, or ca~el ,or modify any such order, upon such terms and conditions as it may think tit to impose - - - - - e~lanation-for the purposes of this' section, the expression "banldng 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 '8 bankirig company incorporated 'in india-(a) all its subsidiaries formed for the purpose of carrying on the busine-ss of banking exclusively outside india; and ' (b) all its branches whether sltuated in india 'or outside india - -  - - - 358 (1) in the ~se of a banking company-amend mentsof pl'ovisions re-jolting to appoint-jjjents'of managing directol"0, etc, to be subj'ectto pj"t"vious approval of the f"eserve bank (a) no amendment of any provision relating to the appointment 9r re-appoi~tment or termination of appointment or remuneration of a chairman, a managing director or any other director, whole-time ur otherwjse or of a manager or a chief executive officer by whatever name called, whether that provision be 'containedin the company's memorandum or articles of association, or in an ~greement 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;    - - explanatio'n - ::fot' the purposes of this sub-sectibn, any ,provision conferring any beneflt or providing ariy amenity or perquisite, 'in 'whatever form, whether during or after the· termination of the term of oftlce of the chairman or the ~nager or the chiei executi~ ofticer by whatever name ,called or the managin6: director, or any other di):ector, whole-time ,or otherwise, shall be deemed to be a provision relating' to his remuneration   1 of 1956 power of reserve bank to appoint additional directors {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 oi s~ctions 310 and 311 apply in relation to the manager of a company) of the companies act, 1956, shall apply to any matter in respect of which the approval of the reserve bank has to be obtained under sub-section (1)  - - - - - 3gab (1) if the reserve bank is of opinion that ~n the interest of banking policy or in the public interest or in the interests of the banking gompany or its deposi~ors it is necessary so to do, it may, from time to time by order in writing, appoint, with effect from such date as may be specified in the order, one or more' persons to hold office as additional directon; of the banking company: ' provided that the number of additional directors so appointed shall not at any time exceed five or one-third of the maximum stl'ength fixed for the board' by the articles, whichever is less  -  - - - 36ad (1) ~  -  5 ot 1970 pu:1ishmenu; for certain activities in relation to bank in,com pabies 21 ot 1976 40 of 1980 (3) for the purposes of this section, "banking company" includes the export-import bank of indi~, the reserve bank, the industrial development bank of india, the national bank, the state bank of india, a corresponding new bank constituted under'section 3 of the banking companles (acquisition and transfer of undertakings) act, 1970, a regional rural bank established under section 3 of the regionill rural banks act, 1976, a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1980, and any subsidiary bank 1 of 19')6 power to dispense with meetings of creditors, etc power of reserve bank to apply to 14'of 1947 '" -  '" '" 42 notwithstanding anything to the contrary contained in sections 460, 464 and 465 of the companies act, 1956, the high court may, in the pro-  ceedings for winding up a banking company, dispense with any meetings of creditors or contributories or with the appointment of a committee of inspection if it considers that no object will be secured thereby sufficient to justify the delay and' expense  '" '"   45; (1)  '" '" '" '" (5) the scheme aforesaid may contain provdsions for all or any' of the following matters, namely:-'" '" '" - - (i) the continuance of the services of all the employees of th~ banking company (excepting such of them as not being workmen within the ,meaning of the industrial disputes act, 1947 are specifically mentioned in the scheme) in the banking company itself on its reconstruction or, as the case may be, in the trans'foer,ee bank at the same remuneration and on the same terms and conditions of service, which they were getting or, as the case may be, by which they were centl~al governmentfor suspension of bu3inesg bya bankingcompanyand to prepare beidg govemed, immediately before the date of the order of mora-torium: "  l _di - provided that the scheme ahali contain a provision that-f'i2z " lchemeof j'ecodiu-tutionor ~ mation (i) the banking company shall payor grant not later than the expiry of the period of three years trom the date od which the scheme is sanctioned by the central government, to the said employees the same remuneration and the same terms and conditions of service as are applicable to employees of corresponding rank or status of a comparable banking company to be determined for this purpose by the reserve bank (whose deter mination in ¢is respect ~hall be final);' (ii) the transferee bank shall payor grant not later than the expiry of the aforesaid period of three years, to the said employees the same remuneration and the same terms and conditions of service as are applicable to the other emplsyees of corresponding rank or status of the transferee bank subject to the qualiftcatlons and experience of the said employees being the same as or equivalent to those of such other employees of the transferee bank: provid~ further 'that if in any case under clause (ii) of the first proviso any doubt or difference 'arises as to whether the quau-fication and experience of any of the said employees are the same as or equivalent to the qualifications and experience of the other employees of corresponding rank or status of the transferee bank, the doubt or difference shall be referred to the reserve bank whose decision thereon shall be final; - - - - - (8) on and from the date of the coming into operation of the scheme or any provi'sion thereof, the scheme or such provision shall be binding on th~ banking company or, as the case may be, on the transferee bank and any other banlting 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 liability in relation to any of those eom:panies or the transferee bank part ilia to over ride other ]a  (9) on and from such date as may be specified by the central government in this behalf, the properties and assets of the banking company shbll, by vtirtue of and to the exretit 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, sumd transferred to, and become the liabilities of, the transferee bank " " - - " (15) in this section, "banking mstitution" means any banking company and includes the state bank of' india or any other banking institution notified by the central government under section 51, ' " " - - - gao the provisions of this part and the rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in the companies act, 1956 or the code of civil procedure, 1908 or the code of criminal procedure, 1898 or any other law for the time being in force or any instrument havlng effect by virtue of any such law; but the provisions of any such law or instrument in so far as the same are not varied by, or inconsistent with, the provisions of this part or rules made thereunder shall apply to all proceedings under this part     ~ special provisions for punishing 45j (1) the high court may, if it thinks fit, take cognizance of and try in a summary way any offence alleged to have been committed by any person who has taken part in the promotion or formation of the bank'ing company which is being wound up or by any director, manager or officer thereol: 1 of 1956 5 of 1898 off~es in rela-provided that the offence is one punishable under this act or under lion to the companies act, 1956 banking coin_ (2) when trying any such offence as aforesaid, the high court may panies also try any other offence not referred to in sub-section (1) which is an being offence with which the accused may, under the code of criminal prace- wu,ound p dure, 1898, be charged at the same trial (3) in any case tried summarily under sub-section (1), the high court-(a) need not summon any witness, if it is satisfied that the evidence of such witness will not be material; (b) shau not be bound to adjourn a trial for any purpose unless adjournment is, in the opinion of the high court, necessary in the interests of justice; 5 of 1898 (c) shall, before passing any sentence, record judgment embodying the s'ubstance of the evidence and also the particulars specified in section 263 of the code of criminal procedure, 1898, so far as that section may be applicable; ~ and nothing contained in sub~ection (2) of section 262 of the code of criminal procedure, 1898, shall apply to any such trial 1 of 1956 5 of 1898 (4) all offences in relation to winding up alleged to have been committed by any person specified in sub-section (1) which are punishable under this act or under the companies act, 1956, and which are not tried in a summary way under sub-sec~ion (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  5 of 1898  (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  - -    - 45s (1) for the purpose of enabling the official liquidator or the chiefpr _ special officer appointed under sub-section (3) of section 37 to take into flidenc! e his custody or under his control, all property, effects and actionable claim1il magis: to which a banking company, is or appears to be entitled the official trate and liquidator or the special officer, astbe case may be, may request in dist~ict  writing the chief presidency magistrate or the district magistrate, within ~:~~~o whase jurisdiction any property, books of account or other documents of assist such banking company may be situate or be found, to take possession offlcial thereof, and the chief presidency magistrate or the district magistrate, as the case may be, shall, on such request being made to him,-' (4) take possession of such property, books of accounts or other documerts, and  (b) forward them to the official liquidator or the special officer liquidator in taking charge of - property of banking company 'being wound up (2) where any such property and effects are in the possession of the chief presidency magistrate or the district magistrate, as the case may be, such magistrate shall, on request in writing being made to him by the official liquidator or the special officer referred 1;0 in' sub-section (1) sell such property and effects and forward the net proceeds of the sale to the official liquidator or the special officer: provided that such sale shall, as far as practicable, be effected by public auction (3) for the purpose of securing compliance with the provisions of sub-section (1), the chief presidency magistrate or the district magi&-trate may take or cause to be taken such steps and use or cause to be used such force as may in his opinion, be necessary (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 - - - - - penalties (s (1) - - - - - cogni zanceof offences, (2) if any person fails to produce any book, account or other document or to furnish any statement or information which under sub-section, (2) of section 35 it is his' duty to produce or furnish, or to ~r any question relating to the business of a banking company which he is asked by an officer making an inspection'llnder that section, he shall be punishable with a fine which may extend to two thousand rupees in respect of each offence, and if he persists in such refusal, to a further fine which may extend to one hundred rupees for every day during· which the offence contin'lles - -  - - (4) if any other provision of this act is contravened or if any default is made in complying with any requirement of this act or of any order, rule or direction made or condition imposed thereunder, any penon guilty of such contravention or default shall be punishable with flne which may extend to two thousand rupees, and wlu!le a contravention or default is a continuing one, with a further fine which may extend to one hundred rupees for every day during which the contravention or default continues  - - - - - 4'1 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 or, as the case'may be, the national bank generally or specially authorised in 'writing in this behalf by the reserve bank or, as the case may 'be, the national bank, and no court inferior to that of a 'presidency magi'strate or a magistrate of the first class shall try any such offence  - - - - 23 of 1955  - sot 19'to21 of 1976 appuca tion of certain provision to the state barrk of india and other tlotifted, banks  '_ 198051 without prejua1ce to the provislons)f the state bank of india act, 1955, or any other enactment, the provisions of sections 10 13 to 15 17" 19·to 21, 23 to 28, 29 [excluding-sub-section (3)],31, 34,35, 35a, 36 [ex~ eluding clause (d) of sub-section (1)], 46 to 48, 50, 52 and 53 shall also apply, so far as may be, to and in relation to the state bank of india or any corresponding new bank constitut~d under section 3 of the bankling companies (acquisition, and transfer of undertakings) act, 1970, or a regional rural bank established under section 3 of the regional rural banks act, 1976, or any corresponding new bank constituted under section 3 of th~ banking comp~nies (acquisition and transfer of undertakings) act, 1980, or any oth8'r banking institution notified by the central government in this behalf as they apply to and in relation to banking companies: provided that-(0) nothing contained in clause (e) of sub-section (1) of section 10 shall apply to the chainn:an of the state bank: of india or to a general manager of any subsidiary bank in so far as the said clause precludes him from being 'a director of or bolding an officp in, any institution approved by the r~serve bank; (b) nothing contained in section 19 shall apply to tbe holding by the state bank of india of shares 1n the capital of any such subsidiary bank; and (e) nothing contained in section 46 or in section 47a shall apply to !lny officer of the central government or tbe 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 banldng fdstitution notified by the central government under this section s2, (1)   -   power of central governmentto make rules 100f 1897, , | act        | to    ||------------|-------|| plytoc()-  |       || operative  |       || societies  |       || aubjecttc |       || modiji   |       || cations   |       || use        | of    || word       |       || "bank",    |       || ~at1'ker"  |       || or         |       |(3) all rules made under this section shall be subject to the condition of previous publication, and the date to be spec'lfted under clause (3)' of section 23 of tbe general clauses aet, 1897, shall not be less than six months from the date on which the draft of the proposed rules was published: provided tliat in respect of the ftrst occasion on which rules are made under this section (including the rules made for the first time on matters specifted in sections loa and 47a) the provisions of this sub-section shah not apply   -", ~ " " - - " 56 tbe provisions of this act, as in force for the time being, shall apply to, or in relation to, co-operative socie1des as tbey apply' to, or in relation t:', banki'ng companies subject to the following modifications, namely:-- - -  " (c) in section ~,-- - " ' - (ii) dau'ses (ff) and (h) shall be omitted; - " " " " (f) for section 7, tbe following section shall be substituted, namely:-- '7 (1) no co-operative society other than a co-operative bank shall use as part of its name any of the ",,'0rds "bank", "banker" or "banking" and no co-operative society shall carry on the business of banking in india unless it uses as part of its • name at least one of such words (2) nothing in this section shall apply to--(a) a primary credit society, or (b) a co-operative society formed for the protection of the mutual interests of co-operative banks or co-operative land mortgage banks, (c) any co-operative society, not being a primary credit society, formed by the employees of a banking company or the stat~ bank of india or any other banking institution notified by the central government under section 51 or the employees of a subsidiary of such banking company or the sta~ bank of india or, as the case may be, 'such banking institution'; (g) sections 10, loa, lob, loc and iod shall be omitted; - - - - - • (;) for section 18, the followin~· section shall be substituted, namely:-'18 every co-operative bank, not being a s,tate co-operative bank for the time being included in the second schedule to the reserve bank of india act, 1934, shall maintain in india, by 2 of 1934 way of cash reserve with itself or in current account opened with the reserve bank or the state bank of india or the state cooperative bank of the state concerned or with any other bank notified by the central government in this behalf or, in the case of a primary co-operative bank, with the central co-operative bank of the district conceraed or partly in cash with itself and partly in such account or accounts, a sum equivalent to at least three per cent of the total of its time and demand liabilities in india, and shall submit tq the reserve bank before the l~th day of every month a return showing the amount so held on friday of each week of the preceding month with particulars of its time and demand liabilities in india on each such friday, or, if any such friday is a public holiday under the negotiable instruments act, 1881, at the clo'se of business on the preceding, working day 26 of 1881 explanation-in this section and section 24 "liabilities in india" shall not include,-- (a) the paid-up capital or the reseryes or any credit balance in the proflt and loss account of the co-operative bank; (b) any advance taken from a state government, the reserw bank, the state bank of india, the industrial development bank of india, the export-import bank of india, the national bank or any bank notified by the central government under clause (e) of the explanation to sub-section (1) of section 42 of the reserve bank of india act, 1934; j of 191 •• ' (c) in the ji,ilse of a state or central co-operative bank, also any deposit of money wtth it representing the reserve [undor any part thereof required to be maintained with it by any other co-operative society within its area of operation, and in the case of a central co-operativ!e ,bank, also an advance taken ~y it from the state co-operative bank of the state concerned; - lof 1956 (d) in the case of a primary co-operative bank, also any advance taken by it from the state co-operative bank of the state concerned or the central co-operative bank of the district concerned';     (m) in section 2qa in sub-section (1), the words and figures "notwithstanding anything to the contrary contained in section 293 of the companies act, 1956," shall be omitted;     - (0) in section 22,-23 of 1965 (i) for sub-sections (1) and (2) , the following sub-sections shall be substituted, namely:--  - - ' (2) every co-operative society carrying on business as a co-operative bank at the commencement of the banking laws (application to co-operative societies) act, 1965, 'shall before the expiry of three months from such commencement, every primary credit society which becomes a primary cooperative bank after such commencement shall before the expiry of three months from the date on which it so becomes a primary co-operative bank and every co-operative society other than a primary credit society shall before commencing banking bu'siness in india, apply in writing to the resex:ve bank for a licence under this section: provided that nothing in clause (b) of sub-section (1) shall be deemed to prohibit-23 of 1~3 (i) a co-operative society carrying on business as a co-operative bank 'at the commencement of the banking laws (applic,ation to co-operative societies) act, 1965, or (ii) a co-operative bank which has come into existence a's a result of the division of any other co-operativf" society or the amalgamation of other co-operative socteties carrying on business in either case as a cooperative bank or banks at such commencement, or (iii) a primary credit society which becomes a primary co-operat've bank af~er such commencement, ~rom carrying on banking business until it is granted a licence in ~ursuance of this section or is, by a no~ice in writing, notified by the reserve bank that the licence cannot be granted to it";  - - - ' (p) in section 23,-- -  -  (ii) after sub-section (4), the following sub-'dection shall be inserted, namely:-"(4a) any co-operative bank requiring the permission of the reserw bank under this section shall forward its application to the reserve bank through the national bank which shall give its comments on the merits of the application and send it to the reserve bank: ' i' provided that the co-operative bank shnll also' send an advance copy of the application directly to the reserve bank"; ,(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; ('~i) for sub-sections (2) and (2a) , the following sub-sections shall be substituted, namely:-< (2) in computing the amount for the purposes of subsection (1) ,-(a) any bamnces maintained in india, by a c0-operative bank in current account with the reserve bank or the state bank of india or with any other bank which may be notifif~d in this behalf by the central government, including in the case of a state co-opei'ative bank, the balan('e' required under section 42 of the reserve 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-operative bank of the state concerned, and (c) any balances rn~ntained by a primary co-operative bank with the central co-operative bank of the district concerned or with the state co-operativebank of the state concerned, shall be deemed to be cash maintained in india (2a) (a) notwithstanding anything ~ contained in subsection (1) or in 'sub-section (2), after the expiry of two years from the commencement of the banking laws (application to co-operative societies) act, 1965, or of such further 23 of 19611 period not exceeding one yenr as the reserve bank, having regard to the interests of the co-operative bank coneerned, may think fit in any particular case to allow,-(i) a state co-operative bank,in addition to the average c1ahy balance which it is, or may be, required to maintain' under section 42 of the reserve bank of india act, 1934, and 2 of 1934 (ii) every other co-operative bank, in aadition to the cash reserve which it is required to maintain under section l8, shali maintain in india in cash, gold or unencumbered approved eecurities, valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than twetlty-five per cent of the total of its demand and time liabilities in india; (b) in computing the amount for the purpose of clause (a),-(i) any cash or balances maintained in india by a co-operative bank, other than a scheduled state cooperative 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 and also any balances mantained with the state co-operative bank of the state concerned, and, in the case of a primary co-operative bank, also any balances maintained with the central co-operative bank of the district concerned or with the state co-operative bank of the state concerned in excess of the aggregate of the cash or balances or both required to be maintained under section 18; and (ii) any balance maintained by a scheduled state cd-eperative bank with the reserve bank in excess of 20t 1914 ~e balance required to be maintained by it under &1!ction 42 of the reserve bank of india act, 1934, and any balances in current account maintained in india by a: 'scheduled state co-operative bank with the state bank of india or with any other bank which may be notified by the central government, shall be deemed to be cash maintained in india explanation-for the purposes of this suh-section,-(a) approved securities, or a portion thereof, representing ivestment of agricultural credit stabilization fund of a co-operative bank shall not be deemed to be unencumbered approved securities; (b) balance with the state co-operative bank of the  state concerned or with the central co-operative bank of the district concerned, or a portion thereof, representing investment of agricultural credit stabilization fund of a co-operative ba~ shall not be deemed to be cash maintained in india; (c) dn case a co-operative bank has taken an advance against any balance maintained with the state bank of india or with any- other bank which may be notifted in this behalf by the central government or with the state co-()perative bank of tbe state i concerned' or with the central co-operative bank of the district concerned, such balance to the ej-tent to which it has been drawn against or availed of shall not be deemed to be cash maintained in india"; - - - - ;"  (w) in section 35,-(i) in 'sub-section (1),-- - - - - (b) the following proviso shall be inserted at the end, namely:-"provided that the reserve bank may, if it considers necessary or expedient so to do, cause an inspection to be made of a primary co-operative bank under this subsection by one or more officers of a state co-operative bank in the state in which such primary co-operative bank carries on business and may, if it considers it necessary and expedient so to do, 'supply a copy of the said report to the state co-operative bank or the registrar of co-operative societies of the state in which the inspecled bank is registered"; (ii) in sub'iiection (4), clause (b) 'shal~ be omitted; (iii) in sub-scction (6), for the expressions "reeional rural banks" and "regional rural bank", wherever they occur, the expressions "co-operative banks other than primary co-operative banks" and "co-operative bank other than a primary co-operative bank" shall, respectively, be substituted; (iu) the explana«on shall be omitted; - - - - - (z) in section 36, in sub-section (1), clauses (b) and (d) shall be omitted; (za) in section 36a,--- - - - - (ii) after sub-section (2), the f~llowing sub-section shall be inserted, namely:-"(3) subject to the provisions of sub-sections (1) and (2), a co-operative society carrying on business as a primary co-operative bank at the commencement of the banking laws (application to co-operative societies) act, 1965, or a co-23 of 1981 operative 'society which becomes a primary co-operative bank after such commencement shall, notwithstanding that it does not at any time thereafter satisfy the requirements of the definition of primary co-operative bank in clause (ccc) of section 5, continue to be a primary co-operative bank: within the meaning of this act, and may, with the approval of the ~erve bank and subject to such terms and condition's as the reserve bank may specify in that behalf, continue to carry on the business of banking"; - - - - - (%c) in section 46, in clause (a) of the ezplanation, after the words "includes an, the words "co-operative 'society,'" shall be inserted; , (zd) in section 47, the words, brackete, figures and letters "subsection (5) of section 36m or" shall be omitted; (ze) section 49 shall be omitted; (zf) in section 49a, for the proviso, the following proviso shall be substituted, namely:- "provided that nothing contained in this section shall apply to-(a) a primary credit society,   dotla (b) any other co-operative society accepting such deposits at the commencement of the banking laws (application to co-operative societies) act, 1965, for a period of one year from the date of such commencement; and (e) any savings bank scheme run by the government"; (zg) sections 49b and 49c s~ be omitted; (zh) in section so, the figures and letters "10, 12a, 16" "3sb," and "43a" shall be omitted; (%i) 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 official liquidator may ftie lists of debtors to the court having jurisdiction under part m or part nia and the particulars which such lists may contain" shall be omit~; (ii) sub-section (4) shall be omitted; (zk) for section 55 and the first schedule, the following se~tion shall be substituted, namely:-"55 (1) the bankers' books evidence act, 1891 shall apply in relation to a cb-operative bank as it applies in relation to a bank as, defined in section 2 of that i act act 180t 1891 and act 48 of - 1949 to apply in relation to coopel'ative banb (2) the banking companies (legal practitioners' clients' accounts) act 1949 shall appty in relation to a  co-operative bank as it applies in relation to a banking company as defined in section 2 of tpat act "';   -   extracts from the state bane of india act, 1955 (23 op 1955)"   " (1) the state bank shall furnish to the central government and returns, to the reserve bank within three months from the 31st day of december, as on whicl1 its books are closed and bal~ed its balance sheet, ~ together with the profit and loss account and the auditors' report~on the working of the state bank during the period covered by the accounts: provided that the central government may, after consultation with the ~serve bank, extend the said period of three months by such" further period, not exceeding three months, as it may think fit      balance sheet, etc, - of state bank may be d1bc:ussed at general meetiiig 42 (1) - -   - - (2) the shareholders present at an annual general meeting shall be entitled to discuss the balance sheet and the profit and loss account of the state bank made up to the previous 31st day of december, the report· of the central board qn the working of the state bank for the period tovered by the accounts and the auditors' report on the balance sheet and accounts  chapter viii\ miscellaneous - - - 43 (1) -  state bank may appoint of6eera 8d'dother employees (2) tbeofficers, advisel's and employees of the state bank: shall exercise such powers and perform such duties as may be entrusted or delegated to them by the central board ,  extracts from the state bank of india (subsidiary banes) act, 1959(38 of 1959) - - - - - 43 (1) a subsidiary bank shall furnish to the state bank and the reserve bank-returns to be funisheel by a subsidiary bank ' gena!ral meetfh,li ~  (a) within three m~ntbs from the 31st day of december as on which its books are closed and balanced, its balance sheet, together with the profit and loss account and the auditor's report, and a report by the board of directors on the working of the subsidiary bank during the period covered by the accounts; and - - - - ' provided that the reserve bank may, after consultation with the state bank, extend the said period of three months by such further period, not exce~ding three months, as it may think fit , - - - - 44 (1) a general meeting (hereinafter referred to as an annual general meeting) of a subsidiary bank shall be held in each year at the place where the heed office of the subsidiary bank is situate, and any other general meeting may be convened by the board of directors at any time:· provided that such annual general meeting shall be held before the expiry of six weeks from the date on which the balance-sheet, together with the profit and loss account and auditor's report, is, under subsection (1) of section 43, forwarded to the state bank, or to the reserve bank,  whichever date is earlier (2) the shareholders present at an annual general meeting shall be entitled to discuss the balance sheet and profit and loss account of the bank concerned, nlade up to the previous 31st day of december, the report of the board of directors on the working of that bank for the period covered by the accounts and the auditors' report pn the batnee sheet and accounts  - - - - - 62 (1)  -    power of central government, to make rules (3), all rules made under this sectionshall be laid for not less than thirty days before each house of parliament as soon as may be atter they are made, and shall be subject to such mo4ilicawons as par!lament may make during the session in which they are so laid or the session immediately following   - ' extracts it'rom the deposit instlllance and clledit guarantee definitions corporation ai:r, 1961 (47 oj' 1961), - - - -  2 in this act, unless the context otherwise requires,-- -  10 of 1949 (b) ''banking company"" means ibny cqmpany which tram»acts the business of banking in india and includes the state bank, a ,f; subsidiary bank and any other banking institution notified under " section 51 of the banking regulation act, 1949, but does not ,'nelude the tamil n adu industrial investment corporation limited;    -  40 of 1980 (ee) "corresponding new bank" means a corresponcing new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970 or a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakin&'i) act, 1980;  -    ,(i) "insured bank" means a banking company or a regional rural bank or an eligible co-operative bank for the time being registered under the provisions of this act and includes for the purposes of sections 16, 17, 18 and 21,-(i) a banking company referred to in clause (a) or clause (b) of section 13, or   - - ,  loot 1949 (k) "new banking company" means a "banking company whlch begins 'to transact the business of bqnking after the commencement of this act under a licence granted to it under section 22 of the bankiing regulation act, 1949, and includes any banking institution notified under section 51 of the said act after such commenoement; - - - - - capital ofcox--poration 4 (1) the authorised capital of the corporation shall be one crore of rupees but the central government may in consultation with the reserve bank, increase such capital from time to time, so, however, that the total authorised capital shall not exceed fifteen crores of rupees - -  -  6 '(1) - - - •• - board of director9 (2) a director nominated under clause (b) or clause (c) of suj; section (1) shall hold office during the pleasure of the authorit~ nominating him and a director nominated under clause (d) of'sub-sectlon (1) shall hold of!ice for such period not exceeding four ~ars as may' be specified by the central government (3) a person shall not be capable of being nominated as a director under clause (d) of sub-sec1llon (1) if-,(4) he has been removed or dismissed from the service of govenunent or of a local authority or of a corporation or company in which not less than fifty-one per cent of the paid-up share capital is held by government; or - (b) be is or at any time has been acljudicate~ as an insolvent or has suspended payment of his debts or has compounded wlth his creditors; or (c) he is of unsound mind and stands so declared by a cojdp&-tent court; or - (d) he has been convicted of any offence which, in the o~n of the central government, involves moral turpitude - -    10 of 1949 registrationof new bank·· ingcom_ patries 11 the corporation shall register every new banking company as an insured bank ns soon as may be after it is granted a licence under section 22 of the banking regulation act, 1949, or, as the case may he, after it is notified under section 51 of the said act - - -  - 13 (1) - - - - - cancellation ~ registra-tiob (2) the provisions of clawles (a), (b), (c), (d) and (h) of sub-section (1) shall apply, to a coitesponding new bank as they apply to a banking company  - : l<:ii (3) the provisions of clauses (4), (b), (c), (d) and (h) of subsection (1) shall apply to a regional rural bank as they apply to a banking company  - - ,  - 13a (1)  •  - - beptra tlon of eooperatlve banks (2) subject as aforesaid-- -   - (b) the corporation shall ~gister as an insured bank--   - (ii) a primary credit society becoming a primary co-operative bank after such commencement within three months of 11 having made an application for a licence under the said aection:j provided that a bank referred to in clause (b) shall not be ~o registered if it has bt!en informed by notice in writing by the reserve bank that iuch a licence cbddot; be granted to it - - - - - 16 (1) where an order for the winding up or liquidatidtj of a insured bank is mad~, the corporation shall, subject tt> the other provision of this act, be hable to pay to every 'depositor of that bank in accordance with the provisions of section 17 an amount equal to the amount due to him in respect of his deposit in that bank at the time when such order is made: - provided that the liability of the corporation in respect of an insured bank referred to in clause (a) or clause (b) of section 13 or clause (a) or clause (b) of section 13c shall be limited to the deposits as on the date of the cancellation of the registration: provided further that the total ainount payable by the corporation to anyone depositor in respect of his deposit in that bank in the same capacity and in the same right 'shall not exceed one thousand and five hundred rupees: provided further that the corporation may, from time to time, having regard to its financial position and to the interests of the banking system of the country as a whole, raise, with the previous approval of the central government, the aforesaid limit of one thousand and five hundred rupees   '" '" '" 32 (1) '" '" lit lit annual accounts and reports (2) the central government shall cause every auditor's report and n!port of the working of the corporation to be laid for not less than thirty days before each house of parliament as soon !as may be after each such report is received by the central government '" lit  '"   extracts from the banking companies (acquisition and transfer of undertakings) act, 19'zo (5 of 1970)'" lit '" - - 3 (1) '" '" - - '" loot 1949 establishment of 1c'orres pod'ding new banks and bwines thereof  (5) every corresponding new bank shall carry on and transact the business of banking as defined in clause (b) of section 5 of the banking regulation act, 1949, and may engage in one or more forms of business specified in sub-sectton (1) of section 6 of that act powerot central government to make scheme (5) every scheme -made by the central government under this act shall be laid, as soon as may ,be after it is mad~, before each house of pbl'l'iament while it is in session for a total period of thirtyl days which may be compri&ed in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, botli houses ~gree in making any· modiftcatlon in the scheme of both houses' agree that the scheme should not be made, the 'scheme shall thereafter have effect only ,in such modi1led form or be of no effect, as the may be so, however; that any such modification or annulment shall be without prejudice to the validity of anytbing previously done under that scheme - - - - 10 (1) - - - - - cloiiureof accounts ami dispnsal dfprofit& (4) every auditor of a corresponding new bank shall make a report to the central government upon the annual baladce-sbeet and accounts and in every such report shall state-(a) whether, in his opinion, the balance-sheet i~ a full and fair balance-sheet containing all the necessary particulars and is properly drawn up so as to exhibit a true and fair view of the affairs of the corresponding new bank, and in case he had called for any explanation or information, whether it has been given and whether it is satisfactory; (b) whether or not the transactions of the corresponding new bank, which have come to his notice, have been within the powers of that bank; ,(c) whether or not the returns received from the oftlces and branches of the corresponding new bank have been foulld adequate for the purpose of his audit; ,(d) whether the profit and loss account shows a true balance of profit or loss for the period covered by such account; and (e) any other matter which he considers should be brought to the notice of the central government - - - - - ' '- • _-(8) the central goverrunent shall cause every auditor's report and report on the working and activities of each corresponding new bank to be laid for not less than thirty days before each house of parliament as soon as may be after each such report is received by' the central gove1'lullel1t - - - ;ex'l'bacts fbojri the :rrgronal rmw banks n:rl 1976 (21 of 1976) - - " - - power idib repla; udhs , 30 the board of directors of a regional rural bank may, after consultation with the sponsor bank and the reserve bank, and with the previous sanction of the central government, jpak:e regulations, not incouistent with the provisions of this act and the rules made thereunder, to provide for all matters for which provision is necesaary - or expedient for the purpose of giving effect to the provisions of this act - - - - - 10 of 1941 establishment of correa ponding new banks and busines - thereof powerot central governmeat to make scheme - - - - - - i 3 (1) - -  - -  (5) every c~rresponding new bank shall carry on and transact the business of banking as defined in clause (b) of section 5 of the banking regulation act, 1949, and may engage in one or more forms of business specified in sub-section (1) of section 6 of that act - - - - - 9 (1) - - -  - (5) every scheme made by the central government under this act shall be laid, as soon· as may be after it is made, before each house of parliament, while it i'i~ in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immedi'ately following the sersion or the successive sessions aforesaid, both houses agree in making any modification in the scheme or both houses agree that the scheme should not be made, the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that scheme      closure' of accouhts andd1l posal of profits 10 (1) - - -  - (4) every auditor of a corresponding new hank shall make a report to the central government upon the annual balance-sheet and accounts and in every such report shall sta~ (a)' whether, in his opinion, the balance-sheet is a full and fair balance-sheet containing all the necessary parti'culars and is properly drawn up so as to exhibit a true and fair vi~w of the alfalrs of the corresponding new bank, and in case he had called for any explanation or information, whether it has been given and whether it i's satisfactory; (b) whether or not the transactions of the corre,aponding new bank, which have come to his notice, have been witb'fn the ·powers of that bank: '(e) whether or not the returns ntceived from the offices and branches of the corresponding njw bank haye been found adequate for the purpose of his audit; '(d) whether the profit and loss account shows a true balance of profit or loss for the 'period covered by such account; and (e) any other matter which he considers 'should be brought to the notice of the central government - - - (8) the central government shall cause every auditor's report and report on the working and activit!~s of each corresponding new bank to be laid for not less than thirty days before each house of parliament as soon ~s may be after each 'such report is received by the central government - - -  a billfurther to amend the bankers' books evidence act, 1891, the reserve bank of india act, 1934, the banking regulation act, 1949, the state bank of india act, 1955, the state bank of india (subsidiary banks) act 1959, the deposit insurance and credit guarantee corporation act, 1961, the banking companies (acquisition and transfer of undertakings) act, 1970, the regional rural banks act, 1976 and the banking companies (acquisition and transfer of undffrtakings) act, 1980 (shri ptanab kumar· mukherjee, minister of finance) , 