 the banking, public finanglil histitutlons negotiable in^mul'lents l^i« (amet^dment) bill, 1988 /  to be/as introduced in lok satha_ 7i page 3 > lin e  32,-for "1^2 (1)' read "1^2»"2, page lin e  10,-for "the banks" read "banks"3 page h, lin e  2 5 ,-for "the period" read '^period"page hj a fte r  lin e  2 5 , -in s e r t              '(c) for the words "iiie year",                                                                  the -words            "the year or the period, as the case may be, "             s h a ll be substituted; '5 page h, lin e  29 and 30,-for "accunting" read "accounting"6, page lin e  3^ jbefore "year" in s e r t "concerned"7 page 5 , li n e  13 ,-for "word" read "words"8, page 8, lin e  26,-for "p ro v isio " read "proviso"9  page 9 , lin e  2 2 , -for "years" read "year"10, t'age -10, lin e s  13 ^nd 1+,-for "necesscary" read "necessary"i i  page 12, lin e  11, -  before "one hundred" in e r t "ri^ees"12 page 12, lin e  12 ,-before "five hundrei" in s e r t "ruft>ess"1 3  page ^1 2 , li n e  2 5 ,-before "ejach" i n s e r t ''o f"1^r page '13, lin e  16-,-afi^er "upon" - i n sert 'h is "1 5  p a g e '13, l i n e  ^3 , -fo r ''others''' rem  'bttier"16 ^^age l 5 j lin e ; 3 1 ,-for "accotfein?" read "a c c o m tin g ", r 7   ^age 78, l i n p | 3 i , -fot "cla iise " read "claioses"18 page 19 j liite: 2 bo ttom^-offlit ''may or''19 page 27j lin e  12 , -for "date" read "period o f  accounting"liewdejill;■sep tecivver ^ , i9s8_________sh a d r a \ ,  < 2 9 1 ^  ( sa k a )bsn no 105 of 1988 the banking, pubuc financial institutions and negotiable instruments laws (amendment) bill 1988 billfurther to amend the negotiable instruments act, 1881, 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 industrial development bank of india act, 1964, the bank­ing companies (acquisition and transfer of undertakings) act,1970, the regional rural banks act^ 1976, the banking companies (acquisition and transfer of undertakings) act, 1980, flfie export- import bank of india act, 1981, the national bank for agriculture and rural development act, 1981 and the industrial reconstruction bank of india act, 1984b e it enacted by parliament in the thirty-ninth year of the republic of india as follows: — chapter i p r elim in a r ytitle and((2) it shall come into force on such date as the central government commay, by notification in the official gazette, appoint, and different dates mencemay be appointed for different provisions of this actment chapter ii a mendments to the n egotiable instruments a ct, 1881a m end­m ent of section802 in section 80 of the negotiable instruments act, 1881 (hereafter in this chapter referred to as the negotiable instruments act), for the words "six per centum'', the words "eighteen per centum" shall be 5 substituted3 in section 117 of the negotiable instruments act^ in clause (c), for the words "six per centum", the words "eighteen per centum'' shall be substituteda m end­m ent of sectton 1174 in the negotiable instruments act, after chapter xvi, the follow- 10 ing chapter shall be inserted, namely: —insertion of new  c hapter xvil 'chapter xvii o f p en a lties in case o f dishonour o f certain  cheques fo r insufftciency of funds in the accountsd ishonour of cheque for insuffi­ciency, etc of funds in the account138 where any cheque drawn by a person on an account main- 15 tained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it 2 0  exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other pro­vision of this act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the 25 amount of the cheque, or with both:provided that nothing contained unless—in this section shall apply(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; 30(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice^ in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as 3 5  unpaid; and(c) the drawer of such cheque fails to make fhe payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice 40explanation—^for the purposes of this section, "debt or other uability" means a legally enforceable debt pr other liability, tf on in favour of holder13d it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability140 it shall not be a defence in a prosecution for an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on present­ment for the reasons stated in that sectiondefence which may not be allow­ed in any prosecu­tion un­ der sec­tion 13810offences by companjieg141 (1) if the person committing an offence under section 138 is a company, every person who, at the time the offence was commit­ted, was in charge of, and was responsible to, the -company fo,r the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:15provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence2025(2) notwithstanding anything contained in sub-section (1), where any offence under this act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordinglyexplanation—^for the purposes of this section,—(a) "company'' means any body corporate and includes a firm or other association of individuals; and(b) "director", in relation to a firm, means a partner in the30firm     142                  (1) notwithstanding criminal procedure, 1973,—                                         anything                                                         contained in the code ofcogniz­ance of offences(a) no court shall take cognizance of any offence punishable3 5  under section 138 except upon a complaint, in writing, made bythe payee or, as the case may be, the holder in due course of thecheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso40 to section 138;        (c) no court inferior to that of a metropolitan magistrate or     a judicial                 magistrate of the first class                                                shall try any                                                               offencepunishable under section 138 chapter iii a m endm ents to the r eserve b ank of i ndia a ct, 1934amend­ment of section 175 in section 17 of the reserve bank of india act, 1934 (hereafter in 2ofl934»this c hapter referred to as the reserve bank a ct), in clause (4b), the proviso shall be om itted i 56  in section 58 of the reserve bank act,—amend­m ent of section 58(a) in sub-section (1), after the woitis "the c entral g overnm ent,", the w ords "by notification in the official g azette," shall be inserted;(b) in such-section (2), in clause (p ), for the w ords "th e scheduled banks", the w ords and brackets "the banks (including post office 10 savings b an k s)" shall be substituted chapter iv a m en d m en ts to the b anking r egulation a ct, 19497 in section 11 of the banking regulation act, 1949 (hereafter in this 10'of amend- c hapter referred to as the banking regulation a ct), in sub-section (2), ^5 ™ct^on°ll clause (b ), in sub-clause (ii), the w ord "calendar" shall be om itted8 in section 29 of the banking regulation act,—(a) in sub-section (i ),—amend­m ent of section 29(i) in the opening paragraph,—(a) after the w ords "each calendar year", the w ords "or 20 at the expiration of a period of tw elve m onths ending w ith such date as the c entral g overnm ent may, by notification in the official gazette, specify in this behalf," shall be inserted;(b) for the words "th at year", the w ords "th at year or the period, as the case m ay be," shall be substituted; 25(ii) for the proviso, the following proviso shall be substi­tuted, nam ely: —"provided th at w ith a view to facilitating the transition from  one period of accounting to another period of accunting vmder this sub-section, the c entral g overnm ent may, by 30 order published in the official gazette, m ake such provisions as it considers necessary or expedient for the preparation of, or for other m atters relating to, the balance-sheet or profit and loss accoimt in respect of the year or period, as the case m ay be" ;(b) after sub-section (3a ), the following explanation shall be 35inserted, nam ely: - i'explanation— in sub-section (3a) , "year" m eans th e year, or as the case m ay be, the period referred to in sub-section (1)'9 in section 30 of the banking regulation act,—amend­m ent of section 30(a) in sub-section (ib ), for the portion beginning w ith the w ords "it m ay direct'' and ending w ith the words "specified in th« 40order", the following shall be substituted, namely: i—"it m ay at any tim e by order direct th at a special audit of the banking com pany's accounts, for any such transaction or class of transactions or for such period or periods as m ay be specified in the order, shall be conducted and m ay by the sam e or a different order either appoint a person duly quali­fied under any law for the tim e being in force to be an auditor of companies or direct the auditor of the banking company him self to conduct such special audit";10(b) in sub-section (1c), for the wordfj "the audit of the tran ­saction or class of transactions", the words "the special audit" shall be substituted;(c) in sub-section (2 ), the w ord ", and auditors, if any, appointed by the law  establishing, constituting or form ing the banking company concerned" shall be inserted at the end15amend­ment of section 5110 in section 51 of the banking regulation act, for the figures "31", the words, brackets, figures and letters "sub-sections (ib ), (1c) and(2) of section 30, 31" shall be substituted11 in the third schedule to the banking regulation act, in form  20 b, in the portion appearing after the heading "form  op p r o f it and l oss a ccount'', the w ord "december" shall be omittedamend­ment of third schedule chapter v a m endm ents to the state b ank op i ndia a ct, 195523 of 1955 12 in section 20 of the state bank of india act, 1955 (hereafter in25 this c hapter referred to as the state bank act)amend­ ment of section 20(a) in sub-section (3),—(i) the words, brackets and figure "and in sub-section (5)''shall be om itted; |(ii) for the words, figures, brackets and letter "section 19 or20 nom inated under clause (d) of that sub-section" and "four years", the words "th at section" and "three years" shall, respectively, be substituted;(iii) the words "or nom inated" and "or renom ination'' shallbe om itted; j35(iv) the following proviso shall be inserted at the end,nam ely;— i"provided th at no such director shall hold office conti­nuously for a period exceeding six years";(b) in sub-section (3a),—40 (i) for the words "a director", the words, brackets andfigure "subject to the provisions contained in sub-section (4), a director" shall be substituted;(ii) after the w ord and figures "section 19", the words, brackets and letter "or nom inated under clause (d) of that sub- 45 section" shall be inserted; '(iii) for th e w ords "duly appointed" and "for re-appoint-^ m ent'', the w ords "duly appointed or nom inated" and "for re ­appointm ent or re-nom ination, as the case m ay be" shall, res­pectively, be substituted;(iv) the follow ing proviso shall be inserted at the end, 5nam ely:— '"provided th at no such director shall hold office conti­nuously for a period exceeding six years";(c) for sub-section {4), the follow ing sub-section shall be sub­stituted, nam ely;— 10" (4) a director appointed im der clause (ca) or clause (cb) of sub-section (1) of section 19 or nom inated under clause (d) or clause (e) or clause (f) of th a t sub-section shall hold office during the pleasiu-e of the authority appointing or nom inating him, as th e case m ay be "; ' 15(d) sub-section (5) shall be om itted 13 in section 21a of the s tate bank act,—amende xnent of sectlien 21a(a) for sub-section (1), the following sub-section shall be sub­stituted, nam ely:—" (1) subject to the provisions contained in this section and 20 in sub-section (2) of section 21, a m em ber of a local board—(a) nom inated under clause (c) of sub-section (1) of section 21 shall hold office for such term , not exceeding three years, as the centrnl g overnm ent m ay specify in this behalf and th ereafter until his successor has been didy nom inated; 25(b) elected under clause (d) of sub-section (1) of section 21 shall hold office for three years and thereafter u n til his successor has been duly elected, and shall be eligible for re-nom ination or re-election, as the case m ay be: ; 3^provided th a t no such director shall hold office continuously for a period exceeding six years,";(b) after sub-section (4), the following sub-section shall be inserted, nam ely:— |" (5) a m em ber of a local board nom inated under clause ^5(c) of sub-section (i) of section 21 shall hold office during the pleasure of the c entral g overnm ent"14' in section 39 of the state bank act,—amend­ment of section 39(a) for the w ords "in each year", the words "or such other date in  each year as the cfentral g overnm ent may, by notification in the 4q official gazette, specify" shall be substituted;(b) the following proviso shall be inserted ai the end, namely: —'provided th at w ith a view to facilitating the transition from one period of accounting to another period of accounting under this sub-section^ the c entral governm ent may, by order published 5 in the official g azette, m ake such provisions as it considers neces­sary or expedient for the closing and balancing of, or for other m atters relating to, the books in lespect of the concerned years"amend­ment of section 4015 in section 40 of the state bank act, in sub-section (j), after the w ords figures and letters "the 31st day of decem ber", the words and10 figures "or the date specified under section 39, as the case may be" shall be insertedamend­ment of section 4216 in section 42 of the state bank act, in sub-section (2), after the words, figures and letters "the previous 31st day of december", the w ords and figures "or the date specified under section 39, as the case may15 be" shall be insertedamend­ment of section 5017 in section 50 of the state bank act, in sub-section (1), after the words "the c entral cjovemment", the words ",by notification in the official g azette,'' shall be inserted chapter vi20 a mendments to the s tate b ank of india (subsidiary b anks)a ct, 1959section 2518 in section 25 of the state bank of india (subsidiary banks) act, amend- 1959 (hereafter in this chapter referred to as the subsidiary banks a ct), ment of in sub-section (1),—25 (a) in clause (c), the following proviso shall be inserted at theend, nam ely: —"provided that any nom ination of a director made by the state bank under this clause shall, except in so far as it relates to an officer of th at bank, be in consultation w ith the central 30 governm ent";(b) in clause (e), the words "in consultation with the state b ank" shall be omitted19 in section 26 of the subsidiary banks aet,-^amend­ment of sectton 26(a) in sub-section (i),—35(i) for the portion beginning w ith the words ", if nominated" and ending w ith the words "that sub-section,", the following shall be substituted, nam ely: —"nom inated under clause (b) or clause (c) or clause (e) of sub-section (1) of section 25 or appointed under clause (ca) or clause (cb) of th at sub-section";40(ii) for the word "nom inating", the words "nom inating of appointing" shall be substituted;ib) for sub-sections (2) and {2a), the following sub^sections shall be substituted, nam ely: —" (2) subject to the provisions contained in section 25, a director elected under clause (d) of sub-section (1) of th at section shall hold oflbce for three years and thereafter until his successor 5 is duly elected, and shall be eligible for re-election:provided th at no such director shall hold ofrce continuously for a period exceeding six years(2a) subject to the provisions contained in section 25 and in sub-section (1), a director nom inated under clause (c) and not lo being an officer of the s tate bank or a director appointed under clause (co) or clause (cb) or a director, not being an officer of the c entral g overnm ent, nom inated under clause (e) of sub­section (i) of section 25, shall hold office for such term  not exceeding three years, as the c entral g overnm ent m ay specify 15 and thereafter until his successor shall have been duly nom inated or appointed, and shall be eligible for re-nom ination or re­appointm ent, as the case m ay be:provided th at no such director shall hold office continuously for a period exceeding six years"; 20(c) sub-section (3) shall be om itted 20 in section 39 of the subsidiary banks act,—amend­ m ent of section 39(a) for the w ords "in each y ear" , the w ords "or such other date in each year as the c entral g overnm ent m ay, by notification in the official g azette, specify" shall be substituted; 25(b) the following provisio shall be inserted at the end, nam ely: —"provided th a t w ith a view to facilitating the transition from  one period of accountint^ to another period of accounting under this sub-section, the c entral g overnm ent may, by order 30published in the official gazette, m ake such provisions as it considers necessary or expedient for the closing and balancins? of, or for other m atters relating to, the books in respect of the concerned years" amendsection 43 of the subsidiary banks act, in sub-section (1), in 35ment of clause (a) after the words, figures and letters "the 31st day of decemsection43 b er", the w ords and figures "or the date notified under section 39, as the case m ay be," shall be insertedamend­ment of section 4422 in section 44 of the subsidiary banks act in sub-sections (2) and(3), after the words, figures and letters "the previous 31st day of decem- 49 ber", the w ords and figures "or the date notified under section 39, as the case m ay be" shall be inserted23 in section 63 of the subsidiary banks act, in sub-section (1), after ment of the w ords "the reserve bank,", the words "by notification in the official section 63 g azette," shall be inserted ' 45 chapter vii a mendments to the d eposit insurance and credit guarantee corporation a ct, 196147 of 1961amend­ment ofsection 624 in section 6 of the deposit insurance and credit g uarantee corpora- 5 tion act, 1961 (hereafter in this chapter referred to as the deposit insu­rance corporation a c t), in sub-section (2)-,—(a) in clause (i), after the word, brackets and letter "clause(c )", th e words, brackets and letters "or clause (d) or clause (e )" shall be inserted;10 (b) for clause (ii), the following clause shall be substituted,nam ely:—" (ii) subject to the provisions contained in clause (i), a director nom inated under clause (d) or clause (e) of sub-section(1), shall hold office for such period, not exceeding three years, j 5 as m ay be specified by the central g overnm ent in this behalf andthereafter until his successor assumes office, and shau be eligible for re-nom ination:provided th at no such director shall hold office continuously for a period exceeding six y e a rs/2q 25 in section 26 of the deposit insurance corporation act, in sub­section (2 )r - \amend­ment qf s e c ^ ^(a) for the words ",each years", the words "or such other date in  eadx year as the c entral g overnm ent may, by notification in the official cassette, specify" shall be substituted;25 w  & e following proviso shall be inserted at the end, namely: —"provided th at w ith a view  to facilitating the transition from  one period of accounting to another period of accounting im der this sub-section, the c entral g overnm ent m ay, by ordei published in the official gazette, m ake such provisions as it 30 considers necessary or expedient for the balancing and clos­ing of, or for other m atters relating to, the books or accounts in respect of the concerned years"amend­ment of26 in section 50 of jfce deposit insurasice corporation act, in sub-section(i), after the w ords "the reserve bank,'', the words "by notification in 35 the official g ^ t t e , " shall be inserted i chapter v in a m endm ents to the industrial d evelopment b ank of india a ct, 19mj»,of 1964amendinent ofs^ ib ii 627 in section 6 of the industrial development bank of india act, 1964 (hereafter in this c hapter referred to as the development bank act), ^  for sub-section {4a), the following sub-section shall be substituted, nam ely:— i" {4a) subject to the provisions of sub-section (4),—(a) every director nom inated under sub-clause (ii) or sub­clause (iv) of clause (c) of sub-section (i) and not being an 45 official of g overnm ent or not being an official or whole-timedirector of the reserve bank or a financial institution or the state p^nk or ^ nationalised bank or a state financial corporation; and(b) every director nom inated under sub-clause (iii) or sub­clause (v) of clause (c) of sub-section (1),shall hold office for such term , not exceeding three years, as the c entral g overnm ent m ay specify in this behalf and thereafter u n til his successor assum es office, and shall be eligible for re-nom ination: 5provided th at no such director shall hold office continuously for a period exceeding six years" '28 in section 18 of the d evelopm ent bank act, in sub-section (2), the follow ing proviso shall be inserted at the end, nam ely: —amend­ment ef section 18"provided th at w ith a view  to facilitating the transition from  10 one period of accounting to another period of accounting under this sub-section, the c entral grovernment m ay, by  order published in the official g azette, m ake such provisions as it considers necesscary or expedient for the closing and balancing of, or for other m atters relating to, the books or accounts in respect of the con- 15 cem ed years" 29 in  section 21 of the d evelopm ent bank act, in sub-section (2), the follow ing proviso shall be inserted at the end, nam ely:—amend­m ent of •eclfon 21''provided th at w ith a view to facilitating the transition from  20 one period of accoim ting to another period of accounting under this sub-section, the c entral g overnm ent may, by order published in the official gazette, m ake such provisions as it considers necessary or expedient for the closing and balancing of, or for other m atters relating to, the books or accounts in respect of the concerned years" 25 chapter ixa mendments to the b anking companies (a cq uisrnon  and t ransfkr of u ndertakings) a ct^ 1970to 3 q  5 of 1970amend­ment of tections    30              in section 3 of the banking companies (acquisition mid trans­fer of undertakings) act, 1970 (hereafter in thi s dtapiter referred as the bank nationalisation act, in                                                    sub-section (2a), in the proviso, f«r the words "rupees one hundred crores", tihe( words "rupees five hun­dred crores" shall be substituted31 in section 9 of the b ank n ationalisation act,—amend­ment ofsection 9(a) in sub-section (2),—                                                                 35      (i) in clause (a), for the words"rupees one hundred eror es", the words "rupees five hundred crores" shall be substituted;    (ii) in clause (c), for the words "corresponding new  bank to any other banking institution", the w ords "corresponding new  bank to any other corresponding new bank or banking institu- 40 tion" shall be substituted;(b) in sub-section (5), the explanation shall be num bered as explanation i, and after explanation i as so num bered, the follow­ing explanation shall be inserted, nam ely: —'explanation ii— for the purposes of this section, the ex­pression "corresponding new bank'' shall include a correspond­ing new  bank w ithin the m eaning of the banking companies (acquisition and transfer of u ndertakings) act, 198040 of 198032 in section 10 of the bank nationalisation act, in sub-section ( 1 ) -amendmeat of sectkm 1010 (ft) for the words "of each year", the words "or such otherdate in each year as the c entral governm ent may, by notification in the official gazette, specify" shall be substituted;(b) the following proviso shall be inserted at the end, nam ely:—"provided th at w ith a view to facilitating the transition from  one period of accounting to another period of accounting under this sub-section, the central governm ent may, by order published in the official gazette, make such provisions as it considers necessary or expedient for the closing and balancing of, or for other m atters relating to, the books in respect of the20 concerned years'  chapter x amendmbaits to the regional rural b anks act, 197633) in section 19 of the regional r ural banks act, 1976 (hereafter21 of 1976 c hapter referred to as the r ural banks a ct), in sub-section (1),—amend­ment of section 1925 (i) for the words "of each year", the words "or such other date ineach year as the c entral governm ent may, by notification in the official gazette, specify" shall be substituted;(ii) the following proviso shall be inserted at the end, nam ely:—30"provided th at w ith a view to facilitating the transition from  one period of accounting to another period of accounting under this sub-section, the central governm ent may, by order published in the official gazette, make such provisions as it considers necessary or expedient for the closing and balancing of, or for other m atters relating to, the books in respect of the concerned vears"35«eetion30a m en d m en ts to the b anking c o m pa n ies (a cquisition and t ransfer o r u ndertakings) act, 198040 of 1980amend-%ment of section 335 in section 3 of the banking compani<$ (acqiiisitioi;! and trans­fer of undertakings) act, 1980 [hereafter in this chapter referred to as s the bank nationalisation act]^ in sub-section (2a), in the proviso, for the words ''rupees one hundred crores", the wofrds "rupees five hundred crores" shall be substituted36 in  section 9 of th e  b an k  n ationalisation a ct,—amoidaent of kctions(o) in sub-section (2),— 1 0(i) in clause (a ), for the words ''one huindred crores", the words "five hundred crores" shall be substituted;(ii) in clause (c), for th e  w ords "corresponding n ew  b an k  to an y  o th e r b an k in g  in stitu tio n ", th e  w ords "corresponding n ew  b an k  to an y  o th er corresponding new  ban k  o r b an k in g  15 in stitu tio n " shall be su b stitu ted ;(b) in sub-section (5), th e  explanation sh a ll be n u m b ered  as explanation i, and a fte r explanation i as so num b ered , th e  follow ing explanation shall be in serted , nam ely: —'explanation ii—f o r th e  purposes of th is section, th e 20 expression "co rresp o n d in g  n ew  b a n k " shall include a corres­ponding n ew  b an k  w ith in  th e m ean in g  erf th e  b anking com ­panies (a cquisition and t ra n sfe r of u nd ertak in g s) a ct, 1970" 5 of 197037 in section 10 of th e  b ank n ationalisation a ct, in sub-section (i),— ment of section 10(o) for th e  w ords "each y e a r", th e  w ords "o r such o th er d ate in 25 each y ear as th e c en tral g o v ern m en t m ay, b y  notification in  th e  official g azette, specify" shall be su b stitu ted ;(b) th e  follow ing proviso shall be in se rte d  a t th e  end, n a m e ly :—"p ro v id ed  th a t w ith  a view  to  facilitatin g  th e  tran sitio n  froin one period of accounting to an o th er period of accounting u n d er jq  th is sub-section^ th e c en tral g o vernm ent m ay, by  o rd er pu b ­lished in  th e  official g azette, m ake such provisions as it consi­ders necessary or ex p ed ien t for th e  closing an d  balancing of, or for o th er m a tte rs relatin g  to, th e books in resp ect of th e  concerned y ears" 35amendsection 19 of th e b an k  n ationalisation a ct, in subment of section (j), after th e  w ords "th e c en tral g overnm ent,", th e  w ords "by•ection w notification in th e official g azette," shall b e inserted chapter x ii a m endm ents to thei e xport-import b ank of i ndia a ct, 1&8128 of 198139 in section 6 of the export-im port bank of india act, 1981 (here­after iij this c hapter referred to as the exim  bank act) ,—amend­ment of section 65 (a) for sub-section (6), the following sub-section shall be sub­stituted, nam ely;—" (6) subject to the provisions contained in sub-section (7), any director nom inated under clause (b) or clause (|c) or clause (d) or clause (e) of sub-section (1) and not being an iq, ^  official of g overnm ent or not being a whole-tim e director or official of the reserve bank or the development bank or the sajd e xport credit and g uarantee corporation limited or a scheduled bank, shall hold office for such term , not excee<ung three years, as the c entral g overnm ent or, as the case may be 15 the authority nom inating him, m ay specify in this b ^ a lf  andthereafter until his successor enters upon office, and shall be e u ^ le  for re-nom ination:provided th at no such director shall hold office continuously fear a period exceeding six years'';20 (b) in sub-section (7), the w ord "other" shall be omitted40 in section 19 of the exim  bank act, in sub-section (2),—ammdmeia of aectionl9(a) for the words "each year", the words or such other date in each year as the c entral g overnm ent may, b|y notification in the official gazette, specify" shall be substituted;25 (b) the following proviso shau be inserted at the end, nam ely:—"provided that w ith a view to facilitating the transition from  one period of accounting to another period of accounting under this sub-section, the central g overnm ent may, by order published in the official gazette, m ake such provisions as it 30 considers necessary or expedient for the closing and balancing o4 or for other m atters relating to, the books or acooimts in respect of the concerned years"41 in section 22 of the exim bank act, in sub-section (2),—amend­ment of aech0d22(a) for the words "each year", the words or such other date in each year as the central governm ent may, by notification in the o fficii gazette, specify" shau be substituted;35(b) the following proviso shall be inserted at the end, namely: —40"provided th at w ith a view to facilitating the transition from one period of accounting to another period of accounting under this sub-section, the central governm ent may, by order published in the official gazette, make such provisions as it considers necessary or expedient for the closing and balancing of, or for others m atters relating to, the books or accounts in respect of the concerned years"amend­ment of section 3942 in  section 39 of the exim  b ank act, in sub-section (1), after th e w ords "th e c entral g o vernm ent", the w ords " by notification in th e official g azette,'' shall be inserted chapter xina m e n d m e n t s to t h e  n atio n a l b a n k for a griculture and r ural 5d ev elo pm en t a ct, 1981amend­ment of section'543 in section 5 of the n ational b ank for a griculture and r ural « d evelopm ent act, 1981 (hereafter in  this c hapter referred to as the n ational b ank a ct), in sub-section (3), the follow ing proviso shall be inserted at the end, nam ely;— 10"provided th at during the period df any casual vacancy of the n atu re referred to in section 11 in the office of the m anaging direc­ tor, the c hairm an m ay also exercise the pow ers and discharge the functions of the m anaging d irector until the person appointed by the c entral g overnm ent under section 11 to act as m anaging 15 d irector enters upon his office"44 in section 6 of the n ational b ank act, in sub-section (2), the follow ing proviso shall be inserted at the end^ nam ely: —amend­ ment of section 6"provided th at no such consultation shall be necessary in the case of directors appointed under clause (e) of sub-section (3)" 20in  section 7 of the n ational b ank act,—amendm ^ t of section?(a) for sub-section (2), the follow ing sub-section shall be sub­stituted, nam ely;—"(2) subject to the provisions contained in sub-section (5), a director appointed under clavise (b) or clause (c) of sub- 25 section (1) of section 6, shall hold office for such term , not exceeding thrse years, as the c entral g overnm ent m ay specify in this behalf and th ereafter until his successor enters upon his office, and shall be eligible for reappointm ent;provided th at no such director shall hold office continuously 30 for a period exceeding six years'';(b) in sub-section (3), the words, b ra ctets and figure "or any other director referred to in sub-section (2)'' shall b e om itted;(c) after sub-section (4), the follow ing sub-section shall be inserted, nam ely;—35" (5) the directors appointed under clauses (b) to (f) of sub-section (1) of section 6 shall hold office during the pleasure of the c entral g overnm ent"46 in  section 46 of the n ational b ank act, in  sub-section (2),—amend­ment of section 46(a) for the words each year" the w ords "or such other date in 4q each year as the c entral g overnm ent m ay, by notification in the official gazette, specify" shall be substituted;(b) the following proviso shall be inserted at the end, nam ely; —"provided that with a view to facilitating the transition from  one period of accounting to another period of accounting 45under this sub-section, the central g overnm ent may, by order published in the official gazette, make such provisions as it ^ considers necessary or expedient for the balancing and closingof, or for other m atters relating to, the books or accounts in 5 respect of the concerned years'' chapter xiv a m endm ents to the i ndustrial r econstruction b ank of i ndia a ct, 1984amend­ment of seclton'1047 in  section 10 of the in d u strial r econstruction b ank of india act, 62 of 1984 10 1984 (h ereafter in th is c hapter referred  to as the in d u strial r econstruc­tio n  b ank a ct), a fte r sub-section i(2), th e follow ing sub-section shall be in serted , n am e ly :—" (5) subject to the provisions of sub-section (2), a director nom inated under clause (c) or clause (d) of sub-section (1) and 15 not being an official of g overnm ent or not being an official or whole­tim e director of the development bank or a public financial institu­tion or the s tate b ank or a nationalised bank or a state financial corporation, sheill hold office for such term , not exceeding three years, as the authority nom inating him  may specify in this behalf20 and thereafter untu his successor enters upon his office, and shallbe eligible for re-nom ination:provided that no such director shall hold office continuously for a period exceeding six years''48 in section 29 of the industrial reconstruction bank act, in sub- atn»n<-25 section (2),— ' ment of section 29(o) for the w ords "each y e a r", the w ords ''or such other date in each year as the c entral governm ent may, by notification in the official gazette, specify" shall be substituted;(&) the following proviso shall be inserted at the end, nam ely:—30 "provided th at w ith a view to facilitating the transitionfrom  one period of accoimting to another period of accouning under this sub-section, the central governm ent may, by order published in the official gazette, m ake such provisions as it considers necessary or expedient for the closing and balancing35 of, or for other m atters relating to the boqks or accounts inrespect of the concerned years" 49 in section 32 of the industrial reconstruction bank act, in sub­section (2),—amendment of section 32(a) for the w ords "each y ea r" the words "or such other date in '0 each year as the central governm ent may, by notification in the official gazette, specify" shall be substituted;(b) ^ e  following proviso shall be inserted at the end, namely:"provided that w ith a view to facilitating the transition from one period of accounting to another period of accounting under this subsection, th e c entral g overnm ent m ay, by order published in th e official g azette, m ake such provisions as it considers necessary or exped'ent for the closing and balancing of, or for other m atters re ­lating to, the books or accounts in respect of the concerned years"ara«tdment of section 6950 in section 69 of the industrial r econstruction bank act, in sub- ^ section (i), after th e w ords "the c entral g overnm ent,'', the w ords "by notification in the official g azette," shall be inserted statement of objects and reasonsthe banking law s w ere last am ended through the banking laws (a m endm ent) act, 1985 (81 of 1985), the various provisions of which w ere brought into force on different dates in 1985 and 1986 since thpn, in the course of adm inistering various laws relating to banks and public financial institutions, a need has arisen for some further am endm ents to the n egotiable instrum ents act, 1881, the reserve bank of act, 1934, th e b anking r egulation act, 1949, the state bank of india act, 1955, the s tate bank of india (subsidiary banks) act, 1959, the deposit insurance and c redit g uarantee corporation act, 1961, the industrial d evelopm ent bank of india act, 1964, the banking companies (acqui­sition and t ransfer of u ndertakings) act, 1970, the regional r ural b anks act, 1976, the banking companies (acquisition and transfer of u ndertakings) act, 1980, the export-im port bank of india act, 1981 th e n ational bank for a griculture and r ural development act, 1981 and the industrial reconstruction bank of india act, 1984, to achieve the following objectives:— ,(i) to enable the g overnm ent to increase the paid-up capital of the nationalised banks so as to im prove the banks' debt: equity ratio and profitability;(ii) to invest the reserve bank of india w ith powers to have special audits of banks carried out w henever considered necessary in  the public interest or in the interests of the banking company or its depositors either by the banks' auditor or any other auditor specially appointed for the purpose;(iii) to provide uniform  tenure to all non-official directors and employee directors on the boards of the state bank of india and its subsidiary banks and certain financial institutions and to lim it th eir continuous m em bership of the board of directors of a bank or institution in keeping w ith the principle enunciated by the estim ates com mittee;(iv) to empower the central g overnm ent to change the account­ing year of any bank or financial institution by notification in the official g azette w hich would enable the c entral governm ent to change the present accounting year of banks and financial institutions to coincide w ith th e financial year (april—m arch) which is envisag' ed as the previous year for incom e-tax purposes;(v) to provide transfer of whole or part of the undertaking of one corresponding new bank to another corresponding new bank;(vi) to obviate avoidable delays by om itting the requiremfflit of prior consultation w ith the state bank of india or the reserve bank of india, as the case m ay be, in the m atter of nomination or appointm ent of officials of the c entral g overnm ent on the board of d irectors of subsidiary b anks of the s tate b ank of india and th e n ational b ank for a griculture and r ural d evelopm ent as obtaining in other analogous statutes;(vii) to provide for m aking of the regulations by the board of d irectors of the banks and financial institutions by notification in the official g azette;(viii) to enable the reserve bank of india to m ake regulations to govern clearing houses w h i^  have as m em bers, besides scheduled banks, other banks and post office savings banks;(ix) to am end the reserve bank of india act, 1934 to om it the ceiling on th e quantum  of loans and advances w hich could be m ade by th e r eserve b ank of india to the industrial finance corporation of india;(x) to revise the ra te of interest from  the present level of six per cent, to eighteen per cent, per annum  payable on a negotiable instrum ent from  the due date in case no ra te of in terest is specified, or payable to an indorser from  the date of paym ent on a negotiable instrum ent on its dishonour w ith a view to discouraging the w ith­holding of paym ent on negotiable instrum ents on due dates;(xi) to c h a n c e  the acceptability of cheques in settlem ent of liabilities by m aking the draw er liable for penalties in case of boun­cing of cheques due to insufficiency of funds in the accoxmts or for the reason th at it exceeds the arrangem ents m ade by th e draw er, w ith adequate safeguards to prevent harassm ent of honest draw ers(xii) to em power the chairm an, n ational bank for a griculture and rvural d evelopm ent (nabard) to exercise the pow ers and discharge the functions also of the m anaging d irector, nabard, during the period of any casual vacancy in the office of m anaging director, nabard for sm ooth functioning of nabard2 the notes on clause explain in detail the various provisions con­tained in  the billn e w  d e l h i;s b chavanthe 23rd august, 1988clause 2 —this clause seeks to amend section 80 of the negotiable instrum ents act, 1881 to revise the rat© of interest payable on a negotiable instrum ent from  the date on which the paym ent was due to the date of actual paym ent, from  the present level of six per centum  per a n n u m  to eighteen per centum  per annum  in oases w here no rate of interest is specified in the negotiable instrum entclause 3— this clause seeks to am end clause (c) of section 117 <sf the negotiable instrum ents act, 1881 to revise the rate of interest payable to an indorser from  the present level of six per centum  per annum  to eighteen per centum  per annum  in the event of dishonour of a negotiable instrum entclause 4—this clause inserts a new chapter xvti in the negotiable instrum ents act, 1881 the provisions contained in the new  chapter provide th at where any cheque draw n by a person for the discharge of any liability is returned by the bank unpaid for the reason of the insuffi­ciency of the am ount of money standing to the credit of the account on w hich the cheque was draw n or for the reason th at it exceeds the arran­gem ents m ade by the draw er of the cheque w ith the banker for th at account, the draw er of such cheque shall be deemed to have com m itted an offence in th at case, the drawer, w ithout prejudice to the other pro­visions of the said act, shall be punishable w ith im prisonm ent for a term  w hich m ay extend to one year, or w ith fine which m ay extend to twi<» the am ount of the cheque, or w ith boththe provisions have also been made that to constitute the said offence—(a) such cheque should have been presented to the bank w ithin a period of six m onths of the date of its draw al or w ithin the period of its validity, whichever is earlier; and(b) the payee or holder in due course of such cheque should have m ade a dem and for the pa3nnent of the said am ount of money by giving a notice, in w riting, to the draw er of the cheque w ithin fifteen days of th e receipt of inform ation by him from  the bank regarding the retvffn of the cheque unpaid; and(c) the drawer of such cheque should have failed to make the paym ent of the said am ount of money to the payee or the holder in due course of the cheque w ithin fifteen days of the receipt of the said noticeit has also been provided that it shall be presumed, unless the con­tra ry  is proved, th at the holder of such cheque received the cheque in the discharge of a liability defences which m ay or m ay not be allowed in an y prosecution for such offence have also been provided to make the provisions effective u sual provision relatin g  to offences by com panies has also been included in the said new  c hapter in  order to ensure th a t genuine and honest bank custom ers are not harassed or p u t to inconveni­ ence, sufficient safeguards have also been provided in the proposed new  c hapter such safeguards are—(a) th at no court shall take cognizance of such offence except on a com plaint, in w riting, m ade by the payee or the holder in due course of the cheque;(b) th at such com plaint is m ade w ithin one m onth of th e date on w hich th e cause of action arises; •(c) th a t no court inferior to th a t of a m etropolitan m agistrate or a judicial m agistrate of the first class shall try  any such offenceclause 5—^this clause seeks to m ake consequential am endm ent in th e reserve bank of india act, 1934 by om itting the proviso to clause (4b) of section 17 of the said act so as to om it the ceiling laid dow n on the quantum  of loans w hich could be advanced to industrial finance corporation of india by reserve b ank of indiaclause 6—this clause seeks to am end section 58(1) of the r eserve b ank of india act, 1934 to provide for m aking of the regulations by th e c entral b oard of the r eserve bank of india by notification in th e official g azette this clause also seeks to am end clause (p) of sub-section (2) of section 58 of th e said act to enable th e r eserve bank of india to m ake regulations to govern the operations of clearing houses having as m em ­bers besides scheduled banks other banks including post office savings bankclause 7—this clause seeks to am end section 11 (2) (b) of the b anking regulation act, 1949 in consequence of am endm ent in clause 8clause 8—^this clause seeks to am end section 29 of th e b anking r egulation act 1949 to enable the c entral g overnm ent to change th e  accounting year of a banking com pany by a notification in the official g azette and also to m ake such provisions as considered necessary or expedient to facilitate such transitionclause 9—this clause seeks to am end sub-sections (ib ), (1c) and (2) of section 30 of the banking regulation act, 1949 to em pow er th e r eserve b ank of india to have special audits of the accounts of a banking com pany for such transaction or class of transactions or for such period or periods conducted by the auditor of the banking com pany or by any other auditor specially appointed for the purposeclause 10—^this clause seeks to am end section 51 of the banking r egulation act, 1949 to m ake applicable th e provisions of section 30 [including sub-sections (1), (la ) and (3)] to state bank of india, sub­sidiaries of state bank of india or any corresponding new  bank or a re­gional r ural bankclause 11—^this clause seeks to am end the third schedule to th e b anking regulation act, 1949 in consequence of am «idm «nts proposed under clause 8 'clause 12—^at present the term of office of nom inated and elected directors vary from  statute to statute it is proposed to bring about uni form ity in the provisions governing the term  of office of nom inated/ elected directors in the various statutes governing banks and financial in­stitutions such as to provide that—(i) a non officiail director, non workm an employee director and a w orkm an em ployee director nom inated/appointed to the board shall hold office during the pleasure of the nom inating/appointing- -authority arid subject to the same for a period not exceeding 3 years as specified at the tim e of his nom ination/appointm ent and th at a director so nom inated/appointed m ay continue in office until his successor is nom inated/appointed and shall also be eligible for reappointm ent/re-nom ination provided th at no such director shall hold office continuously for a period exceeding 6 years(li) a non official director elected to the board shall hold ofbce for a period of 3 years and thereafter until his successor is elected and shall be eligible for re-election provided that no elected director shall hold office continuously for a period exceeding 6 years;(iii) directors who are officials of government, reserve bank of india state bank of tnf^ia and its subsi'^iarv banks other scheduled banks and n'iblic finaridal inctit" tion<; n+ber tha'i workmen employee directors and non workm en etyir>lnvpe diractors shall hold office dur­ ing th e pleasure of the nom inating authorityclause 12 of the bill seeks to am end section 20 of the state bank of india act, 1955 to bring in uniform ity in the term  of office of directors on the lines indicated above 'clause 13-—this clause seeks to amend section 21a of the state b ank of india act, 1955 to bring in uniform ity in the term  of office of m em bers nom inated and elected to the local boards of state bank of india on the lines indicated in the note relating to clause 12clause 14—^this clause seeks to amend section 39 of the state bank of india act, 1955 to enable the central g overnm ent to change the accounting year of the state bank of india by a notification in the official g azette and also to m ake such provisions as considered necessary or expedient to facilitate such transitionclause 15—this clause seeks to m ake consequential am endm ent in section 40 of the state bank of india act, 1955 in the light of the amend­m ents to section 39 of the state bank of india act, as indicated in notes under clause 14clause 16—^this clause seeks to make consequential am endm ent in section 42 of the state bank of india act, 1955 in the light of the amend­m ents to section 39 of the state bank of india act, 1955 as indicated in notes im der clause 14clause 17—^this clause seeks to amend section 50 of the state bank of india act, 1955 to provide for m aking of the regulations by the central b oafd of the state bank of india by notification in the official gazettecilause 18—this clause seeks to am end section 25 of th e state b ank of india (subsidiary banks) act, 1959 to provide th at nom ination of a non official director under section 25(1) (c) of th e said a ct shall be m ade in consultation w ith the c entral g overnm ent and also to provide th a t for nom ination of an official of the c entral g overnm ent as a director on th e b oard of subsidiary banks of state b ank of india no consultation w ith s tate b ank of india is necessaryclouse 19—this clause seeks to am end section 26 of th e s tate bank of india (subsidiary banks) act, 1959 to bring in  uniform ity in  th e  term  of office of directors as explained in notes under clause 12clause 20—^this clause seeks to am end section 39 of th e s tate bank of india (subsidiary banks) act, 1959 to enable the c entral g overnm ent to change the accounting year of a subsidiary bank of state bank of india by  a notification in the official g azette and also to make such pro visions as considered necessary or expedient to facilitate such transitionclause 21—this clause seeks to m ake a consequential am endm ent in  section 43 of the state b ank of india (subsidiary banks) act, 1959 in the light of th e am endm ents proposed to section 39 of the said act as indicated in note relating to clause 20, clause 22—^this clause seeks to m ake consequential am endm ent in section 44 of the state b ank of india (subsidiary banks) act, 1959' in th e light of th e am endm ents prooosed to section 39 of th e said act as indicated in note relating to clause 20 , clause 23—this clause seeks to am end section 63 of the s tate b ank of india (subsidiary banks) act, 1959 to provide for m aking of the regu­lations by state bank of india in respect of th e subsidiary banks of s tate b ank of india by notification in the official gazetteclause 24—^this clause seeks to am end section 6 of th e deposit insur­ance and c redit g uarantee corporation act 1961 to bring in uniform ity in  th e term  of office of directors nom inated on th e b oard of d irectors of the corporation on the lines indicated in clause 12clause 25—this clause seeks to am end section 28 of th e deposit in­surance and c redit g uarantee corporation act, 1961 to enable th e cen­tral g overnm ent to change the accounting year of th e corporation by a notification in the official g azette and also to m ake such provisions as considered necessary or expedient to facilitate such transitionclause 26—^thls clause seeks to am end section 50 of the deposit insurance and c redit g uarantee c orporation act, 1961 to provide for m aking of the regulations by the board of the corporation by notification in the official gazette !clause 27—^this clause seeks to am end section 6 of the industrial d evelopm ent bank of india act, 1964 to bring in uniform ity in the term  of office of directors nom inated on the b oard of industrial developm ent of india on the lines indicated in clause 12clause 28—this clause seeks to in sert a proviso at the end of section18 of the industrial d evelopm ent b ank of india act, 1964 w ith a view  to enabling the c entral g overnm ent to m ake such provisions as considered necessary or expedient to facilitate the transition from  one date to the other appointed date in closmg and balancing of tne boojis and accounts of the d evelopm ent assistance jj'undclause 29—this clause seeijs to amend section 21 of the industrial developm ent bank of india act, 1964 to proviae for such provisions as considered necessary or expedient to facilitate the transition from  one date to the other appointed date in closing and balancing the books a i^ accounts of the industrial development bank of indiaclause 30—this clause seeks to amend section 3 (2a ) of the banking companies (acquisition and transfer of u ndertakings) act, 19^0 to increase the lim it on the paid-up capital of corresponding new beuiks governed by the said act from  tne present lim it of rs 100 crores to rs 500 crores i' xt clause 31—this clause seeks to make a consequential am endm ent to section 9(2) (a) of the banking companies (acquisition and transfer of u ndertakings) act, 1970 in view of the am endm ents proposed to sec­tion 3 (2a) of the said a ct as explained in the notes relating to clause 30 and also to am end section 9(2) (c) and the expianation under sub-section (5) of section 9 of the said act to provide ior transfer of the whole or any p art of the undertaking of one corresponding new bank to any other corresponding new  bankclause 32—this clause seeks to amend section 10 of the banking companies (acquisition and t ransfer of undertakings) act, 1970 to enable the c entral grovernment to change the accounting year of any corresponding new  bank governed by the said act by a notification in the official g azette and also to m ake such provisions as considered neces­sary or expedient to facilitate such transitionclause 33—this clause seeks to amend section 19 of the regional r ural banks act, 1976 to enable the central governm ent to change the accoim ting year of regional r ural banks by a notification in the official g azette and also to m ake such provision as considered necessary or expedient to facilitate such transitionclause 34—^this clause seeks to am end section 30 of the regional r ural banks act, 1976 to provide for m aking of the regulations by the board of directors of regional rural banks by notification in the official g azette i ' i clause 35—this clause seeks to amend section 3(2a) of the banking companies (acquisition and transfer of u ndertakings) act, 1980 to increase the lim it on the paid-up capital of corresponding new  banks governed by the said act from the present lim it of rs- 100 crores to rs 500 croresclause 36—^this clause seeks to m ake a consequential am endm ent to section 9(2) (a) of the banking companies (acquisition and transfer of u ndertakings) act, 1980 in view of the amendments proposed to section 3 (2a) of the said act as explained in the notes relatm g to clause 35 and also to am end section 9 (2) (c) and the explanation under sub-section (5) of section 9 of the said act to provide for tra'isfei" of the whole or any part of the undertaking of one corresponding new  bank to any o th er c o iie ^  ponding new  bankclaiise 37—this clause seeks to am end section 10 of the b anking com panies (a cquisition and t ransfer of u ndertajtings) act, 1980 to enable the c entral g overnm ent to change the accounting year of any corresponding new  bank governed by the said a ct by a  notification in the official g azette and also to m ake such provisions as considered neces­sary or e::peaient to facilitate such transitionclause 38—this clause seeks to am end section 19 (1) of the b anking com panies (a cquisition and t ransler ol u ndertakings) act, 1960 to provide for m aking of the regulations oy the b oard of d irectors of a cor­responding new  bank governed by the said a ct by notification in the official gazette ; , clause 39—this clause seeks to am end section 6 of the export-im port b ank of india act, 1981 to bring in unilorm ity in the term  of office of directors nom inated on the b oard of e xport-im port b ank of india on th e lines indicated in the notes relating to clause 12clause 40^—this clause seeks to am end section 19 of the export-im port b ank of india act, 1981 to enable the c entral g overnm ent to change the date as on w hich the books and accounts of the e xport d evelopm ent f und to be closed and balanced each year by a notification in the official g azette and also to m ake such provisions as considered necessary o r expedient to facilitate such transitionclause 41—this clause seeks to am end section 22 of th e export-im port b ank of india act, 1981 to enable the c entral g overnm ent to change the accounting year of the said b ank by a notification in the official g azette and also to m ake such provisions as considered necessary or expedient to facilitate such transitionclause 42—this clause seeks to am end section 39 of the e xport- im port b ank of india act, 1981 to provide for m aking of the regulations by the board of th e said bank, by notification in the official gazetteclause 43—this clause seeks to am end section 5 of the n ational bank fo r a griculture and r ural d evelopm ent act, 1981 to provide th at during the period of any casual vacancy in the office of the m anaging director, n ational bank for a griculture and r ural d evelopm ent (nabard), the chairm an, nabard m ay also exercise the powers and discharge the fim ctions of the m anaging d irector, nabard so th at the adm inistration of the organisation continues smoothlyclause 44—this clause seeks to am end sub-section (2) of section 6 of the n ational b ank for a griculture and r ural developm ent act, 1981 to provide th at for appointm ent of the officials of c entral g overnm ent as directors on the board of the said bank, no consultation w ith reserve b ank of india is necessaryclause 45—this clause seeks to am end section 7 of the n ational b ank for a griculture and r ural developm ent act, 1981 to brm g in uniform ity in the term  of office of directors nominated on the board of the said bank on the lines indicated in the notes under clause 12clause 46—this clause seeks to amend section 46 of the national bank lor a gricultural and r ural development act, iffsl to enable the c entral g overnm ent to change the accounting year of the national bank for a griculture and r ural development by a notification in the official g azette and also to make such provisions as considered necessary or ex­pedient to facilitate such transitionclause 47—this clause seeks to amend section 10 of the industrial r econstruction bank of india act, 1984 to bring in uniform ity in the term of office of directors nom inated on the board of the industrial recons­truction bank of india on the lines indicated in the notes relating to clause 12 i clause 48—this clause seeks to amend section 29 of the industrial r econstruction bank of india act, 1984 to enable the central govern­ m ent to change the date as on which the books and accounts of the rejnsti'uction assistance fund to be closed and balanced each year by a notification in the official gazette and also to make such provisions as considered necessary or expedient to facilitate such transitionclause 49—this clause seeks to am end section 32 of the industrial reconstruction bank of india act, 1984 to enable the central government to change the accounting year of the industrial reconstruction bank of india by a notification in the official gazette and also to make such pro­visions as considered necessary or expedient to facilitate such transitionclause 50—this clause seeks to am end section 69 of the industrial r econstruction bank of india act 1984 to provide for making of the re­gulations by the board of directors of the industrial reconstruction bank of india by notification in the official gazette financial memorandumat present, the banking companies (acquisition and transfer o£ undertakings) act, 1970 and the banking companies (acquisition and transfer of undertakings) act, 1980 provide that the paid-up capital of every corresponding new bank as are specified in column 2 of the first schedule to the aforesaid acts may be increased by the central gov­ernment, from time to time, provided that the paid-up capital of any such bank shall in no case be in excess of one hundred crores rupees the government has been contributing to the paid-up capital of the said banks in the last few years with a view to improving their profitability and, debt; equity ratio as a result, in the case of a few of the said banks, the paid-up capital has reached the present statutory limit of one hundred crores rupees- further contribution in respect of these banks would be possible only if the present limit is revised upwards2 clauses 30, 31 (a) (i), 35 and 36 (a) (i) of the bill increase the present statutory limit from rs 100 crores to rs 500 crores this would enable the central government to increaae the paid-up capital of the said banks to improve their profitability and debt; equity ratio3 a sum of rs 200 crores has been provided for this purpose in the budget estimates of the current year the expenditure will be met from out of the consolidated fund of india and will be of a non-recurring nature the eontfibutitm is laroposed to be got invested lay the said banks in special securities and would, therefore, come back into the public account of india4 the provisions of the bill do not involve any other expenditure of a recurring or non-recurring natureclause 6 of the bill seeks to am end section 98 of the reserve bank of india act, 1934 clause (p) of sub-section (2) of the said section 53 em powers the c entral board of the reserve bank of india to make with the previous sanction of the central government, regulations for the m atters relating to the regulation of clearing houses for the scheduled banks- the proposed am endm ent amplifies this power to make regulations for all the banks including post office savings banks this apart, the central g overnm ent is being empowered, by m aking suitable amendments in the concerned legislations, to  change the accounting year of the bank or finan­cial institution by notification in the qfftcial g azette and to provide for m atters connected therew ith to facilitate the transition from one date to the other in this behalf this would enable the central governm ent to change the present accounting year of the banks and financial institutions, if consfdered jiecessary so to do, to coincide w ith the financial year (year ending 31st m arch) which is now envisaged as the uniform  previous year for all the assessees and for all sources of income under the incom e-tax law2 the m atters in respect of which the said regulations m ay be made or the purposes for w hich the said notifications may be issued are m atters and purposes relating to procedure and detail and it m ay not be practicable to provide them, in the bill itself3 the delegation of legislation power is, therefore,, of a norm al character annexuree x t r a c t s f r o m  t h e n e g o tia bl e i n s t r u m e n t s  a c t, 1861(26 of 1881)interest when no rate specified,80 w hen no rate of interest is specified in the instrum ent, in terest on the am ount due thereon shall, notw ithstanding any agreem ent relating to interest betw een any parties to the instrum ent, be calculated at the rate of six per centum  per annum , from  the date at w hich the sam e ought to have been paid by the party  charged, until tender or realization of the am ount due thereon, or until such date after the institution of a suit to recover such am ount as the c ourt directsexplanation— ^when the party  charged is the indorser of an instru­m ent dishonoured by non-paym ent, he is liable to pay interest only from  the tim e th at he receives notice of the dishonour chapter x ii o f c o m p e n s a t io nrules as to com­pensa­tion117 t he com pensation payable in case of dishonour of a promissory note, bill of exchange or cheque, by any party liable to the holder or any indorsee, shau be determ ined by the following rules: - m m(c) an indorser who, being liable, has paid the am ount due on the same is entitled to the am ount so paid w ith interest at six per centum  per annum  from  the date of paym ent until tender or reali­zation thereof, together w ith all expenses caused by the dishonour and paym ent; ie x t r a c t s f r o m  t h e r eserv e b a n k  of i n d ia  a ct, 1934 (2 of 1934)17 the bank shall be authorized to carry on and transact the several kinds of business hereinafter specified nam ely: —    business which the bank may transact(4b) the m aking to the industrial finance corporation of india of loans and advances,—(a) repayable on dem and or on the expiry of fixed periods not exceeding ninety days from  the date of such loan or advance, against securities of the c entral g overnm ent or of any state governm ent; or(b) repayable on the expiry of fixed periods not exceeding eighteen m onths from  the date of such loan or advance, against securities of the c entral g overnm ent of any m aturity or against bonds and debentures issued by the said corporation and guaranteed by the c entral g overnm ent and m aturing w ithin a period not exceeding eighteen m onths from  the date of such loan or advance:provided th at the am ount of loans and advances granted under clause (b) shall not at any tim e exceed fifteen crores of rupees in the aggregate;58 (1) the c entral board may, w ith the previous sanction of the c entral governm ent, m ake regulations consistent w ith this act to pro­vide for all m atters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this actpower of the central board to make ^regula­tions(2) in particular and w ithout prejudice to the generality of the fore­going provision, such regulations m ay provide for all or any of the following m atters, nam ely: —(p) the regulation of clearing-houses for the scheduled banks;♦ ♦ ♦ ♦ ♦ e xtracts from the b anking r egulation a ct, 1949 (10 of 1949)11 il)(2) in the case of a banking company incorporated outside india—require­ment as to mini­mum paidup capi­tal and reserves(b) the banking company shall deposit and keep deposited w ith the reserve bank either in cash or in the form of unencumbered approved securities, or partly in cash and partly in the form of such securities—(ii) as soon as m ay be after the expiration of each calendar year, an am ount calculated at tw enty per cent, of its profit for th at year in respect of all business transacted through its branches in india, as disclosed in the profit and loss account prepared w ith reference to that year under section 29: provided that any such banking company may at any time replace—(i) any securities so deposited by cash or by any other un­encumbered approved securities, or partly by cash and partly by other such securities, so however, that the total amount deposited is not affected;(ii) any cash so deposited by unencum bered approved secu­rities of an equal'value29 (i) a t the expiration of each calendar year every banking com­pany incorporated in india, in respect of all business transacted by it accounts and balancesheetand every banking com pany incorporated outside india in respect of ah business transacted through its branches in  india shall prepare w ith reference to th a t y ear a balance-sheet and profit and loss account as on the last w orking day of the year in the fohns set out in the t hird schedule or as near thereto as circum stances adm it;provided th a t in the case of a bankihg com pany incorporated out­side india, the profit and loss account m ^y be prepared as on a date not earlier than tw o m onths before the last w orking day of the year(2) the balance-sheet and profit and loss account shall be signed—(a) in the case of a banking com pany incorporated in india, by the m anager or the principal officer of the com pany and w here th ere are m ore than three directors of tjae company, by at least th ree of those directors, or w here th ere are not m ore than three directors, by all the directors, and(b) in the case of a banking com pany incorporated outside india by the m anager or agent of th e principal office of the com pany in india-30 a )audit(ib ) w ithout prejudice to anything contained in the companies act,1 of 1956 1956, or any other law  for the tim e being in  force, w here the reserve b ank is of opinion th at it is necessary in th e public interest or in the interests of the banking com pany or its depositors so to do, it m ay direct the auditor of th e banking com pany to audit th e accounts of the bank­ing com pany in relation to any transaction or class of transactions speci­ fied in the order, and th e auditor shall comply w ith such directions and m ake a report of such audit to th e r eserve b ank and forw ard a copy thereof to the compainy(ic) the expenses of^ or incidental to, th e audit of the transaction or class of transactions specified in  the order m ade by the reserve b ank shall be borne by the banking company(2) the auditor shall have the powers of, exercise the functions vested in, and discharge th e duties and be subject to the liabilities and penalties imposed on, auditors of companies by section 227 of the com­panies act, 19561 of 195651 w ithout prejudice to the provisions of the state bank of india act, 1955, or any other enactm ent, the provisions of sections 10, 13 to13 of 195515, 17, 19 to 21a, 23 to 28, 29 excluding sub-section (3) 31, 34, 35, 35a, 36 excluding clause (d) of sub-section (1), 45y to 45zf, 46, to48, 50, 52 and 93 shall also apply, so far as m ay be, to and in relation to the s tate bank of india or any corresponding new  bank or a regional applica­tion of ccrtain provi­sions to the state bank of india and other notified ^banksr ural bank or any subsidiary bank as they apply to and in relation to banking companies:provided that—(a) nothing contained in clause (c) of sub-section (i) of section 10 shall apply to the chairm an of the state bank of india or to a m anaging director of any subsidiary bank in so far as the said clause precludes him  from  being a director of, or holding an office in, any institution approved by the reserve bank;(b) nothing contained in sul^clause (iii) of clause (b) of sub­section (i) of section 20 shall apply to any bank referred to in sub­section (3), in so far as the said sub-clause (iii) of clause (b) pre­cludes that bank from  entering into any commitment for granting any loan or advance to or on behalf of a company (not being a g overnm ent company) in which not less than forty per cent, of the paid-up capital is held (w hether singly or taken together) by the c entral governm ent or the reserve bank or a corporation owned by that bank; and46 or in section 47a shall(c) nothing contained in section apply to—(i) an dfficer of the central governm ent or the reserve bank, nom inated or appointed as director of the state bank of india or any corresponding new  bank or a regional rural bank or any subsidiary bank or a banking company; or(ii) an officer of the state bank of india or a corresponding new bank or a  regional r ural bnk or « subsidiary bank nomi­nated or appointed as d lx ^ to r of any of the said banks (not being the bank of w hich he is an officer) or of a banking companyf o r m  o f  p r o f i t  a n d  l oss a c c o u n t profit and loss account for the year ended expenditure interest, paid cn deposits,borrowings, etcsalaries and allowances and provicent income ♦(less provision made during the year for bad and doubtful debts and other usual or necessary provi­sions)f u n d     interest pnd discountdirectors' and local committee members fees and allr-wancesprovident fundcommission, excxhange and rents brokeragerent, taxes, insurance, lighting, etclaw chargespostage telegrams ?nd stamps and it os f e e s net profit on sale of investments, gold and silver, land premises and other assets (not credited to reserves or any p^rticulpr fund or account)net profit on revaluation cf investments, gold and silver land, premises and other assets not credited to reserves (i any particular fund or account)depriciation on and repairs to the banking company's property   income from non-banking assets and prcfit trorn sale of or dealing with such assets other receiptsless (if any)stationery, printing, advertisement, etcloss from sale cf or de^ling with nonbankin assets  ^ t o ta lother expenditure balance cf profit♦net loss cn sale or revaluation of investments, geld and silver, land, premises and ether assets, if any, it may be deducted from incomethis form shad be accompanied b> a note containing the following particulars, n^ui cly:^particulars of remuneration relating to managing director/manager or chief executive officer showing separately all payments made or provided during the year in respect of each of the following i'ems and the total of all such items, namely:—(i) salaries, (ii) allowances,(iii) sitting fees,hv) bonus,'^v) employer's contributions to provident fund, pension fund or any other supcr?nnuition fund(vi) payments by way of gratuiiies, pensions or otherwise, in excess of the employer's contiributions and interest thereon, and(vii) the monetary value of any r ther benefits or perquisites e xtracts from the s tate b ank of i ndia a ct, 1955 (23 of 1955)   20 term of office of chair­manmanagingdirector,etc(3) subject to the provisions contained in section 19 and in sub­section (5) a director elected under clause (c) of sub-section (i) of section 19 or nom inated under clause (d) of th at sub-section shall hold office for four years and thereafter untill his successor shall have been duly elected or nom inated and shall be eligible for re-election or re­nom ination(3a) a director appointed under clause ( ^ )  or clause (cb) of sub-section (i) of section 19 shall hold office for such term, not exceeding three years, as the central g overnm ent may specify and th ereafter until his successor shall have been duly appointed, and shau be eligible for re-appointm ent(4) a director nom inated under clause (e) or clause (f) of sub­section (1) of section 1& shall hold office during the pleasure of the authority nom inating him(5) the following provisions shall have effect in relation to direc­tors nom inated under clause (d) of sub-section (1) of section 19, to the c entral board reconstituted for the first tim e on or after the commen­cem ent of the state bank of india (arhendment) act, 1964, namely; —35 of 1964({) if the num ber of such directors holding office at the end of one year from  the date of such reconstitution is not more than three, then one of such directors, and if such num ber exceeds three, then tw o of them , shall retire at the end of the said year;(ii) if the num ber of such directors holding office at the end of tw o years from  the date of such reconstitution is not more than three, then one of such directors, and if such num ber is four, then tw o of them , shall retire at the end of the said two years;(iii) if the num ber of such directors holding office at the end of three years from  the date of such reconstitution is not more than two, then one of such directors shall retire at the end of the said three years;(tv) any such director holding office for a period of four years from  the date of such reconstitution sliall retire at the end <jf such period;(v) the director or directors to retire a t the end of each year undter c la u se  (i), (it) snd (hi), shall be deteim ined by lotterm of ofee of meailjers ctf ldcal boai^,21 a (1) subject to the provisions contained in this section and in sub-section (2) of section 21, a m em ber of a lbfcai board nom inated un­der clause (c) of sub-section (1) of section 21 or elected under clause (d) of th a t sub-section shall hold office for two years and thereafter until his successor has been duly nom inated or elected and shall be eligible for re­ nom ination or re-election, as the case m ay be:provided th at out of the six m em bers nom inated under cwuse (c) of sub-section (1) of section 21, on the constitution of a new local board or the reconstitution of an existing local board for the first tim e on or after the com m encem ent of the state bank of india (amendment) act, 1964, three shall retire at the end of one year and three shall retire at the end of two years from the date of the constitution or, as the case m ay be,, reconstitution of th at local board, and the members to retire at the end of the first yedr sliall be d^erm iried by lot39 t he c entral b oard shall cause th e books of th e s tate b ank <to be closed, and balanced as on th e 31st day of decem ber in each y earbooks to be balanced each yeai)i returns40 (i) the s tate b ank shall furnish to th e c entral g overnm ent and to  th e r eserve b ank w ithin three m onths from  th e 31st d ay  of decem ber, as on w hich its books are closed and balanced its beilanced sheet, together w ith the profit and loss account and the auditors' report and a  report by th e c entral board, on the w orking and activities of the s tate b ank during the period covered by the accounts:provided th a t the c entral g overnm ent m ay, aftei' consultation w ith th e r eserve bank, extend the said period of three m onths by such fu rth er period, not exceeding th ree m onths, as it m ay th in k  fit42, (!)»»(2) the shareholders present at an annual general m eeting shall be entitled to discuss the balance-sheet and the profit and loss accoim t of th e state bank m ade up to th e previous 31st day of decem ber, the report of th e c entral b oard on the w orking and activities of the s tate b ank for th e period covered by the accounts and the auditors' r ^ o r t  on th e balance-sheet and accountsbalancesheetetc, ofstatebankmaybediscussedat generalmeeting50 (1) the c entral b oard m ay, after consultation w ith th e r eserve b ank and w ith the previous sanction of th e c entral g overnm ent m ake regulations, not inconsistent w ith this a ct and the rules m ade there­under, to provide for all m atters for w hich provision is expedient for th e purpose of giving effect to th e provisions of this actpower of central to make regula­tions board e xtracts fbom  the s tate b ank of india (s ttbsidiary b anks) a ct, 1959 (38 o r 1959)2s (i) subject to th e provisions of sub-section (2), the board d irectors of a subsidiary bank shall consist of th e following: —ofcomposi­tion of the boardof direc­tors(c) not m ore than five directors to be nom inated by th e state b ank of whom  not m ore th an  three shall be officers of th a t bank;(e) a director, if any, to be nom inated by the c entral g overn­m ent in consultation w ith the s tate bankterm of oflbceof directors26 (1) a  director of a subsidiary b?mk, if nom inated under clause(b) of sub-section (i) of section 26 or if an officer of the s tate b ank and nom inated under clause (c) or if an c ^ c e r of the c entral g overn­m ent and nom inated under clause (c) of th a t sub-section, shall hold office during the pleasure of the authority nom inating him(2) subject to the provisions contained in section 25, a director nom inated under clause (c) of sub-section (i) of th at section and not being an officer of the state bank, a director elected under clause (d) and a director, not being an officer of the central government, nomi­nated  under clause (e), of th at sub-section, shall hold office for three years and thereafter until his successor is duly nom inated or elected, as th e case m ay be(2a) a director appointed under clause (ca) or clause (c&) of sub­section (1) of section 25 shall hold office for such term, not exceeding three years, as the c entral g overnm ent m ay specify and thereafter until his successor shall have been duly appointed, and shall be eligible for re-appointm ent(3) a director of a subsidiary bank vacating his office shall be eli­gible for re-nom ination or re-election, as the case m ay be chapter v n a ccounts and a ttdit39 a  subsidiary bank shall cause its books to be closed and balanced as on the thirty-first day of december in each yearclosing ofannualaccounts43 (1) a subsidiary bank shall furnish to the state bank, the reserve bank and th e c entral cjovem m ent^returns to be furnished by a sub sidiary bank(a) w ithin three m onths from  the 31st day of december as on w hich its books are closed and balanced, its balance-sheet, together w ith the profit and loss account and the auditor's report, and a report by the board of directors on the w orking and activities of the subsi­diary bank during the period covered by the accounts; and general nieetings44 (1) »    (2) the shareholders present at an annual general m eeting shall be entitled to discuss the balance-sheet and profit and loss account of the bank concerned, m ade up to the previous 31st day of december, the re­p o rt of the board of directors on the w orking and activities of that bank for the period covered by the accounts and the auditor's report on the balance-sheet and accounts(3) n othing contained in this section relating to an annual general m eeting shall apply in relation to a subsidiary bank if, as on the previous 31st day of december, all the shares in the issued capital of that bank are held by the s tate b ank61 (i) the s tate b ank m ay, w ith the approval of the r eserve bank, in  respect of a subsidiary bank regulations, n o t inconsistent w ith this a ct and the rules m ade thereunder, to provide for all m atters for w hich provision is necessary or expedient for the purpose of giving effect to the provisions of this a c tpower of the state bank to make regula­ tionse xtracts from the d eposit i nsvbance and credit g uarantee c qrppbation a ct, \ m  (47 op 1961)| 6 (1)     ||-------------|| board of    || directors  |(2) (i) a (r ector nom inated under clause (b) or clause (c) of sub­section (1) shall hold office during the pleasure of the authority nom ina­ting him ; and(it) a  director nom inated under clause (d) or clause (e) of sub­section (3), shall hold office for such period not exceeding four years as m ay be specified by the c entral g overnm ent and thereafter until his successor assum es oflbce;| 28 (1)     |     | '■=    |     |    ||--------------|------|---------|------|-----|(2) the b oard shall cause the books and accounts of the corporation to be balanced and closed as on the 31st day of december, each yearprepara­tion of balancesheet, etcby cor­porationregula­tions5® (1) the b oard m ay, w ith th e previous approval of the reserve bank, m ake regulations not inconsistent w ith this act to provide for all m atters for w hich provision is necessary or expedient for the purpose of giving effect to the provisions of this a ct e xtracts i^iom the industrial d evelopment b ank of i ndia a ct, 1964 (18 of 19w)| 60 (1) -    ||--------------|| constitu­     || tion of      || board       |(4a) subject to the provisions of sub-section (4), every director nom i­nated im der sub-clause (hi) or sub-clause (t;) of clause (c) qf su l> s^tio n  (2) shau hold office for such te n n  i^ot exceeding three years as the c ent­ral g overnm ent m ay specify in this behalf i«- (1) (2) the board shall cause the books and accounts of the fund to be closed and balanced as on the 30th day of june each year, for such other date, as the c entral g overnm ent may, by notification in the official gazette, appoiiit ,21 (1 )counts i and au­dit of developiient assist­ance fund(2) the board shall cause the books and accounts of the development b ank to be closed and balanced as on the 30th day of june each yeai' or such other date, as th e central governm ent may by notification in the official gazette, appointprepara­tion of accounts balancesheete x tra c ts  fro m  th e  b an k in g  c om panies (a cq u isitio n  and t ransfer of u nderrakings) a ct, 1970 (5 op 1970) chapter ii t ra n sfs? of the undertakings of existing banks3 (1)   (2a) n otw ithstanding anything contained in sub-section (2), the paidup capital of every corresponding new bank constituted under sub-section (1) m ay from tim e to tim e be increased by—establish­ment of correspon­ding new banks and business thereof(a) such am ounts fis the board of directors of the corresponding new  bank may, after consultation w ith the reserve bank and w ith the previous sanction of the central government, transfer from the re­ serve fund established by such bank to such capital;(b) such am oim t as the central governm ent may, in consultation wuh the reserve bank, contribute to such paid-up capital:ptovided th at the paid-up capital of any such bank shall in no case be in excess of rppees one hundred croresj <> (1)   (2) in particular, and w ithout prejudice to the generality of the fore­going power, the said scheme m ay provide for all or any of the following m atters, nam ely:—!power of cent­ral govenunent to make scheme(o) the capital structure of the corresponding new bank, so how ever th at the paid-up capital of any such bank shall not be m excess of ru p e ^  one crores;(c) the reconstitution of any corresponding new  bank into tw o or m ore corporations, the am algam ation of any corresponding new  bank/, w ith any other corresponding new  bank or w ith another bank­ing institution, the tran sfer of the w hole or any p art of the under­ taking of a corresponding new  bank to any other banking institution cff th e transfer of the w hole or any p art of th e undertaw ng of any other banking institution to a corresponding new  bank;-   ♦ (5) on and from  th e date of coming into operation of a scheme m ade under this section w ith respect to any of the m atters referred to in clause (c) of sub-section (2) or any m atters incidental, consequential and supplem ental thereto,—((o) the schem e shall be binding on the corresponding new  bank or corporations or banking institution, and also on the m em bers, if any, th e depositors, and other creditors and em ployees of each of them  and on any other persons having any rig h t or liability in relation to any of them  including the trustees or other persons, m anaging or in  any o th er m anner connected w ith, any provident fund o r other fim d m aintained by any of them ; i(b) th e properties and assets of the corresponding new  bank, or as th e case m ay be, of th e banking institution shall, by virtue of and to th e ex ten t provided in the scheme, stand transferred to, and vest­ed in, and th e liabilities of the corresponding new  bank, or, as th e case m ay be, of th e banking institution shall, by v irtu e of, and to th e ex ten t provided in  the scheme, stand transferred to, and become the liabilities of, the corporation or corporations brought into exist­ ence by reconstitution of th e banking institution or th e correspond­ing new  bank, as the case m ay be ■explanation— in this section, "banking institution" m eans a banking com pany and includes the s tate b ank of india or a subsidiary bank chapter v m iscellaneous10 (1) every corresponding new bank shall cause its books to be closure closed and balanced on th e 31st day of decem ber of each y ear and shall accoappoint, w ith the previous approval of the r eserve bank, auditors for the audit of its accountsunte and dfeposal of profits e xtracts from the r egional r ural b anks a ct^ 1976 (21 of 1976)  chapter v a ccounts ai>fd a udit19 (1) e very regional r ural b ank shall cause its books to be closed closiire of accand balanced as on the 81st day of decem ber of each year and shall appoint w ith the approval of th e c entral governm ent auditors for audit of its accounts \ <the power to make regula­tions36 (1) the board of directors of a regional r ural bank may, after consultation w ith the sponsor bank and the reserve bank, and w ith the previous sanction of the c entral government, m ake regulations, not inconsistent w ith th e provisions of this act and the rules m ade there­ under^ to provide for all m atters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this acte xtract from the b anking c om panies (a cquisition and t ransfer of u ndertakings) a ct, 1980(40 of 1980)♦ ♦ ♦ ♦ chapter ii t ransfer of the undertakings of existing banks3 (i)    ♦ (2a) n otw ithstanding anything contained in sub-section (2) the paid-up capital of every corresponding new  bank constituted under sub-section (1) m ay from  tim e to tim e be increased by—establish­ment of corres­ponding new banks and busi­ness thereof(a) such am ounts as the board of directors of the corresponding new  bank m ay, after consultation w ith the reserve bank and w ith th e previous sanction of the c entral grovemment transfer from  the reserve fund established by such bank to such paid-up capital;(b) such am ounts as the c entral governm ent may, in consulta­tion w ith the reserve bank, contribute to such paid-up capital:provided th at the paid-up capital of any such bank shall in no case be in excess of rupees one hundred crores9 (i)  ♦ ^ ♦ ♦(2) in particular, and w ithout prejudice to the generality of the foregoing power, the said scheme m ay provide for all or any of the following m atters, nam ely: —power of central govern­ment to make schen\p(a) the capital structure of the corresponding new  bank, so how ever th at the paid-up capital of any such bank shall not be in excess of rupees one hundred crores(c) the reconstitution of any corresponding new  bank into two or m ore corporations, the am algamation of any corresponding new bank w ith any other corresponding new  bank or w ith another bank­ing institution, the transfer of the whole or any part of the undertaking of a corresponding new  bank to any other barjring institution or the transfer of the w hole or any part of the undertaking of any othet bank­ing institution to a corresponding new  bank; chapter v miscetlanbotrs10 (1) every corresponding new  bank shall cause its books to be closed and balanced on the 31st day of decenibet of each year alid shall appoint, w ith the previous approval of the r eserve bank, auditors for th e  audit of its accountsclosure of acc­ounts ana disposal of profits,power to make regu­lations19 (1) the board of d irectors of a corresponding new  bank may, after consultation w ith the reserve b ank atid w ith the previous sanction of the c entral g overnm ent, m ake regulations, not iriconsistent w ith the provisions of this act or any schem e m ade thereunder^ to provide for all m atters for w hich provision is expedient for the purpose of giving effect to the provisions of this act e xtracts fro m  the export-im p o r t bank of in d ia a ct, 1981 (28 of 1981)6 (1)constitu­tion of board(6) any director liditiihdted under sub-clatise (lit) of clause (e) of sub-feection (i) shkll hdld office fbr ^ df tw o yedfs(7) a ny other director nom inated under ttis  section shall hold office during the pleasure of the authority nom inating him19  (1) ^ ^  (2) the board shall cause the books and accounts of the e xport d e ­velopm ent fund to be closed and b ^an ced  as on the 31st day of decem­ber each year♦ ♦ ♦  accountsanddit ofexportdevelopmelitfund22 (1)    (2) the board shall cause the books and accounts of the exim  bank to bfe closed atid balanced as on the 31st day 6t decetnbfet each yearprepara­tion ci accounts and ba­lancesheetpower to make regula­tions39 (1) the board may, w ith the previous approval of the c entral gk«rerlim€9it, m ake regulations not incolisistetit w ith this act to provide fbr all m atters for w hich |)rovision is necessaty or expedient for the purp b ^  of giving ^ e c t  to the provisions of tiiis acte xtracts from the n ational b ank for a griculture and r ural d evelop­m e n t a ct, 1981(61 of 1981)manage­ment5 (i)     (5) subject to the provisions of sub-section (i) and save as other­wise provided in the regulations made under this act, the m anaging d irector shall also have powers of general superintendence, direction and m anagem ent of th e affairs and business of the national bank and m ay also exercise au powers and do all acts and things which may be exer­cised or done by the n ational bankboard of directors,6 (1) ♦    (2) the c hairm an and other directors shall be appointed by the central g overnm ent in consultation w ith the reserve bank7 (i)  ^(2) the directors appointed under clauses (b) to (f) of sub-section(1) of section 6 shall hold office for a term  of three years:provided th at such director shall notw ithstanding the expiration of his term  continue to hold office until his successor enters upon his officeterm of office of chairman and other directors, retirement and pay­ ment of fees(5) the c entral governm ent may, in consultation w ith the reserve bank, rem ove the chairm an or any other director referred to in sub-section(2) at any tim e before the expiry of his term  of office after giving him a reasonable opportunity of showing cause against the proposed removal46 (1)    (2) the board shall cause the books and accounts of the national bank to be balanced and closed as on the thirtieth day of june, each yearprepara­tion of balancesheet, etc, of national banke x t r a c t s  fr o m  t h e  i n d u s tr ia l r e c o n s tr u c tio n  b a n k  o f india a ct, 1984(62 of 1984)29 (i) ♦ ♦ k (2) the board shall cause the books and accounts of the fund to be closed and balanced as on the 30th day of june each yearaccounts and audit of recons­ truction assistance fund(2) t he b oard shall cause the books and accounts of the r econstruc­tion b ank to be closed and balanced as on the 30th day of ju n e each year3 2  (1)  4:  prepara­ tion of accounts and balancesheet69 (i) the board m ay, w ith the previous sanction of the c entral g overnm ent, m ake regulations, not inconsistent w ith the provisions of this act and the rules m ade thereunder, to provide for all m atters for w hich regulations are necessary or expedient for the purpose of giving effect to the provisions of this a ct and of th e rules m ade thereunder4c  ^ ♦ ♦power of re­construc­tion bank to make re­gulations billfu rth er to am end the n egotiable instrum ents act, 1881, the r eserve bank, of india act, 1934, th e b anking r egulation act, 1949, the state b ank of india act, 1955, the s tate bank of india (subsidiary banks) act, 1959, th e deposit insurance and c redit g uarantee corporation act, 1961, the industrial d evelopm ent bank of india act, 1964, the bank­ing com panies (acquisition and t ransfer of u ndertakings) act, 1970, th e regional r ural banks act, 1976, th e b anking companies (a cquisition and transfer of u ndertakings)' act, 1980, the export- im port b ank of india act, 1981, the n ational b ank for a griculture and r ural d evelopm ent act, 1981 and the industrial reconstruction bank of india act, 1984,(shri s b chavan, minister of finance)