 lok sabra co&uge1;da tothe ea,: kdjg cjt1p alh5s (ac~~isitijn and trc~jsft'ill of undertakings) bill, 1980 (to be/as in troduced in 10k sabha) 1 - page 2, in the marginal heading t8 clause 4,  liu: "undert 3kin gil read "undertakings" 2 page 8, line 2,-for "0 r emp 10 yee " read "or other employee" 3 page 11, line 24,-for "actvities" ~ ii acti vitie s" l\je~j dsihi; june q 1980 jyaistha 19, 1902 (saka)  ,~~l no 96, :tj- the banking companies (acquisition and transj'er of' undertakings) bill, 1980 a billto provide for the acquisition and transfer oj the undertaking, of certain ban1cing cc1mpanies, having regard to ~r size, resources coverage and organisation, in ordel' further to control the might' rjf the economy, to meet progressively, and serve better, tae cedl of the dev'e~opment of the economy and to promote the weljare of the people, iot conformity with the policy of the state t01vllrds securing the principles laid down in clauses (b) and (c) of article 39 of the c~titution and for matters connected therewith or incidental , jhe;7;eto be it enacted by parliam~nt in the thirty-first year of the republte of india as follows:-chapter i  preliminarys i, (1) this act may be called the banking companies (acquisition short and transfer of undertakings) act, 1980 tit and (2) it shall be deemed to have come into force on the 15th day of april • j~80, z in this act, unless the context otherwise requires,-lof 1956 10 ,(a) "banking company" does not include a foreign company , within the meaning of section 591 of the companies act, 1956; (b) '~corresponding new bank", in relation to an existing bank, means the body corporate specified against such bank in column 2 of the first schedule; 's ,(c) "c;::ustodian" means ,the person who becomes, or is appointed, a custodian under section 7; (d) "existing bank" means a ~an1dng company specified in column 1 of the first schedule, belnl a company the total of the demand and time liabuities in india of which, as shown in the return as on the 14th day ~ march, 1980, furnished to the reserve bank under section 42 of the i&eserve bank of india act, 1934 amounts to not less than rupees twohundrect crores; 2 of 1934 (e) words and expressions used herem and not defined but defined in the banking regul;;ttion act, 1949, have the meanings res-5 10 of 1949 pectively assigned to them in that act  chapter ii transfer of the undertakings of existing banks3 (1) on the commencement of th:s act, there shall be constituted 10 su'ch corresponding new banks as are specified in column 2 of the first schedule establishment of corresponding new banks and business thereof (2) the paid-up capital of every corresponding new bank constituted under sub-section (1) shall, until any provision is made in thb behalf in any scheme made under mction 9, be equal to the paid-up capital of 15 the existing bank in relation to which it is the corresponding new bank (3) the entire capital of eaeh corresponding new bank shall stand vt!sted in, and allotted to, the cent!:,l government (4) every corresponding new bank shall be a body corporate with perpetual succession and a common seal with power, subject to the 20 provisions of this act, to acquire, hold and dispose of property, and to contract, and may sue and be sued in its name (5) every corresponding new bank shall carey on and transact the business of banking as defined in clause (b) of section 5 of the banking regulation act, 1949, and may engage in one or more forms of business 25 10 of 1949 specified in sub-section (1) of section 6 of that act (6) every corresponding new bank shall establish a reserve fund to which shall be transferred the share premiums and the balance, if any, standing to the credit of the reserve fund of the existing bank in relation to which it is the corresponding new bank, and such further sums, 30 if any, as may be transferred in accordance with the provisions of section 17 of the banking regulation act, 1949 10 of 1949 4 on the commencement of this a,c,t, the undertaking of every existing bank shall be tr msferred to, and shall vest in, the correspond· ing new bank :15 undertaking of existing banks to veot in correa ponding new banks general effect of vesting 5 (1) the undertaking of each existing bank shall be deemed to include all assets, righ~s, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve 'funds, invest~ ments and all other rights and interests in, or arising out of, such property as were immediately before the commencement of this act in the 40 ownership, possession, power or control of the existing bank in relation to the undertaking, whether within or without incl1a, and all books of accounts, registers, records and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then lubsistlng of the exist- 4:-ing bank in relation to the undertaking (2) if, according to the laws of any country outside india, the provisions of this act by themselves are not effective to transfer or vest any asset or liability situated in that country which forms part of the undertaking of an existing bank to, or in, the corresponding new bank, 5 the affairs of the existing bank in relation to such asset or liability shall, on and from the commencement of this act, stand entrusted to the chief executive officer for the tijrne being of the corresponding new bank, and the chief executive officer may exercise all powers and do all such acts and things as may be exercised or done by the existing bank 10 for the purpose of effectively transferr~ng such assets and discharging such liabilities (3) the chief executive officer of the corresponding new bank shall, in exercise of the powers conferred on him by sub-section (2), take all such steps as may be required by the laws of any such country outside is india for the purpose of effecting such transfer or vesting, and may either himself or through any person authorised y him in th;s behalf teal1ae any asset and discharge any liability of the existing bank (4) unless otherwise expressly provided by this act, all contradll, deeds, bonds, agreemen"ls, powerrs of attorney, grants of legal repre-20 sentation and other instruments of whatever nature subsist'ng or having effect immediately before the commencement of this act and to which the existing bank is a party or which are in favour of the existing bank shall be of as full force and effect against or in favour of the corresponding new bank, and may be enforced or acted upon as fully and 25 effectually as if in the place of the existing bank the corresponding new brnk had been a party thereto or as if they had heen issued in favour of the corresponding new bank (5) if, immediately before the commencement of this act any suit, appeal or other proceeding of whatever nature in relation to any busi-30 ness of the undertaking which has been transferred under section 4, is pending by or against the existing bank, the same shall not abate, be discontinued or be in any way, prejudicially affected by reason' of the transfer of the undertaking of the existing bank or of anvthin1 contained in this act but the suit appeal or other proceeding may be continued, 35 prosecuted and enforced by or against the corresponding new bank (6) nothing in this act shall be construed all applying to the assets, rights, powers, authorities and pr;vileges and prc'4?erty, movable and immovable, cash balances and investments in any country outside india (and other r~ghts and interests in, or arising out of, such property) and borrowings, liabilities and obligations of whatever k;nd subsisting im· 40 mediately before the commencement of this act, of any existing bank operating in that country if, under the laws in force in that country, it is not permissible for a bank;ng company, owned or controlled by government, to carryon the business of banking there  chapter iii payment of amount6 (1) every existin~ bank shall be given by the cen'tral government sum amount in re'>peet of the transfer, under section " to the ,, ponding new bank of tbe undertakin(' of the existing buk  a •• pecffted payment of amount ~ against each such bank in the sec!ond schedule - - 0 (2) the amount referred to in sub-sec'tion (1) shalt be given to every existing bank, at its option,-(a) in cash'(ta be paid by cheque' drawn on the ~eri'e- bdkf in three equal annual instalmdiits, the atnodirt of emil  iriltalftwtt' catlryling' interest rtt the rate (jf ftv~ and a half per' eentf pet dlhldil 5 henri' the cbmmencerrumt of this act; or (b) in saleable or otherwise transferable promissory notes or stock certificates of the central government issued and repayable' at par, and maturing at the end of-(i) ten years from the eommencemeat of this ad and 10 carrying interest from suc!'h commencement at the rate of- six' per cent per annum, or (ii) thirty years from the eomme'dcemel1't of this act afid' carrying interest from such commeneerrient at the rate of seven per cent per annum; or is (c) partly in cash (to be paid by cheque drawn on the reserve bank) and partly in such number of securities specified in subciuse (i) or sub-claus~ (ii), or both, of clause (b), as may jtt, required by the exi~ting bank; or (d) partly in such number of securities specified in sub-dause 20 (i) of clause (b) and partly in such number of securities spet1fied in sub-clause (ii) of that dause as may be required by the existiii'g' bank, (3) the first of the three equal annual instalments referred to in clliuse (a) of sub-section (2) shall be paid, and the securities referred 25 to in clause (b) of that sub-section shall be issued, within sixty days from the date of receipt by the central government of the option referred to in that sub-section, or where no such option has been exercised, from the latest date before which such option ought to have been exercised 30 (4) the option referred to in sub-section (2) shall be exercised by every existing bank before the expiry of a period of thr~e months from the commencement of this act (or within such further time, not exeeed" ing three months, as the central government may, on the application  of the existing bank, allow) and the option so exercised shall be- ftnal3s and shall not be altered or rescinded after it has been exercised (5) any existing bank which omits or fails to exercise the option referred to in sub-section (2), within the time specified in sub-se~tion (4), shall be deemed to have opted for payment in securities specified iii sub-clause (i) of clause (b) of sub-section (2) (6) notwithunding anything contained in thi~ sediion, any existing bank may, before the expiry of three months from the commtencement of this act (or within such further time, not exceedin~ three months, as the central government may, on the application of the existing bajik, allow) make an applica'tion in writing to the cel1trai govern- 4$ mflbt lot 8ft interim peyment of an amount equal to seventy-five per cent  ·tiiie  ount of the paid-up capital of such bank, intme!d'tiltely wore laieh eemmencement indicating therein whether th'e payment ts deshed  eash or in ~1,\ritjes specifle'd in sub-!le~tiqn (~), or in both  (7·)th  ()ebti'al gonnnent· shah, wifhin sixty tap f~ml dn reaipt of,-a appiiatiea, 'nferretto"in 'sub-section (6); maketkeill __ -,, ~- dire- :ejdattuabadtc -ill accordanlce with th' optior i 1iail, llar:_ sudfirptttlc!  s (8) the interim payment made to an existing bank under' gb section (7) shall be set off against the total amount payable to such mating' bank under this act and the balance of the amonnt remab:rlng cn:rtstiuidtrlg aftet such payml!nt shall be given to the ~xisting bank tn; at<j1'dane'ewtththe option exercised, or deemed to have beenexerelsed, 10 under sub-section (4) or sub-'section (5), as'the case may be~ prov1ded that where any part of the interim payment is obbdnf!ti by a'fil extstfng bank in cash, the i?ayment so obtained shall be set dft? in ''the first' instance, against the first instalment of the cash paj!mft't refe1ted to in sub-section (2), and in case the payment so obtainedejt  'ty ceeds' the amount df the first instalment, the excess amount shall' be a6jits~ against the second instalment and the balance of such ~ amount, if any, against the third instalment of the cash payment  chl<\pter iv management of corresponding new banks20 head oftlce and mana,e menl 7 (1) the head office of each corresponding new bank shall be at such place as the central government may, by notification in the offt'ciai gazette, specify in this behalf, and, until any such place is so specified, shall· be at such place at which the head office of the existing banjo" in relation to which it is the corresponding new bank, is on the commenae--2s meltt of this act, located, (2) the general superintendence, direction and management of the affairs and business of a correfqonding new bank shall vest in a board of directors which shall be entitled to exercise all such powers and do all such acts and things as the correfqonding new bank is t'uthorised to 30 exercise and do, (3)  (4) as soon as may be after the commencement of this act, the central g()vernment shall, in consultation with th", reserve bank, con-· stitute the first board of directors of a corresponding new bank, consisting of not more than seven persons, to be appointed by the central 35 geyemment, and every director so appointed shall hold offtce until< the board of directors of such corresponding new bank is- constitutecir in accordance with the scheme made under section 9: provided that thl! central government may, if it is of opinion that it is necessary in the interests of the corresponding new bank so to do, r~ a f?efson from the membership of the first board of 'directors 40 and, appoint any other pel'son in his plaee (b) every member of the first board of directors (not being an officer of the central government or o,f the reserve bank) shall receive such remuneration as is equal to the remuneration which a member of fli~'boardofdfrectors of the existing bank was entitled to receive fm 45 mediately before the commcmcement of this act, (4) until the first board of directors is appointed by the central government under sub-section (3), the general superintendence, direction and management of the affairs and business of a corresponding new bank shall vest in a custodian, who shall be the chief executive officer of that bank and may exercise all powers and do all acts and things as 5 mqy be exercised or done by that bank (5) the chairman of an existing bank holding office as such immediately before the commencement of this act, shall be the custodian of the corresponding new bank and shall receive the same emoluments as h was receiving immediately before soch commencement: 10 provided that the central government may, if the chairman of an existing bank declines to become, or to continue to function as, a cuatodian of the corresponding new' bank, or, if it is of cqinion that it is necessary in the interests of the corresponding new bqnk so to do, appoint any other person as the custodian of a corresponding new bank and the 15 custodian so appointed shall receive such emoluments as the central government may specify in this behalf erplanation-in this sub-section and in sub-section (1) of section l~, the expression "chairman", in relation to any existing bank, includes the i;lerson carrying out the duties of the chairman or otherwise func- 20 tinning as the chief executive officer of that bank (6) the custodian shall hold office during the pleasure of the central government 8 every corresponding new bank shall, in the discharge of its functions, be guided by such directions in regard to matters of poliey in- 25 volving publk intere~t as the central government may, after consultation with the governor of the reserve bank, give corresponding new banks to be guided by the directions of the central government 9 (1) the central government may, after consultation with the lteserve bank, make a scheme for carrying out the provisions of this act power of central govern_ ment to make scheme (2)· in particular, and without prejudice to the generality of the fore- 30 going power, the said scheme may provide for all or any of the following matters, namely:-(a) the capital structure of the eorresponding new bank, so however that the paid-up capital of any such bank shall not be in excess of rupees fifteen crores; 35 (b) the constitution of the board of directors, by whatever name called, of the corresponding new bank and all such matters in - connection therewith or incidental thereto as the central government ml'ly consider to be necessary or expedient;  (e) the reconstitution of any corresponding new bank into two 40 or more corporations, the amalgamation of any corresponding new bank with any other corresponding new bank or with another banklng institution, the transfer of the whole or any part of the undertaking of a corresponding new bank to any other banking· institution or the transfer of the whole or any part of the undertaldng of any other banking institution to a corresponding new bank; 5 (d) such incidental, consequential and supplemental matters as may be necessary to carry out the provisions of this act (3)  every board of directors of a corresponding new bank, constituted under any scheme made under sub-section (1), shall include-(a) representatives of the employees, and of depositors, of such bank; and 10 (b) such other persons as may represent the interests of each of the following catf'gories, namely, farmers, workers and artisans, to be elected or nominated in such manner as may be specified in the scheme 15 (4) the central government may, after consultation with the' reserve bank, make a scheme to amend or vary any scheme made under sub-section (1) (5) every scheme made by the central government under this act shall be laid, as soon as may be after it is made, before each house of 20 parliament, while it is m session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the scheme or both houses agree that the scheme should 25 not be made, the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that scheme  chapter v miscellaneous10 (1) every corresponding new bank shall cause its books to be closed and balanced on the 31st day of december of each year and shall appoint, with the previous approval of the reserve bank, auditors for the audit of its accounts closure ot account anddiaposal of profttl 1 of 1956 3s (2) every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under section 226 of the companies act, 1956 and shall receive such remuneration as the reserve bank may fix in consultation with the central government (3) every auditor shall be supplied with a copy of the annual balance-40 sheet and profit and loss account and a list of all books kept by the corresponding new bank, and it shall be the duty of the auditor to examine the balance-sheet and profit and loss account with the accounts and vouchers relating thereto, and in the performance of his duties, the auditor-4s (a) shall have, at all reasonable times, access to the books, accounts and other documents of the corresponding new bank; (b) may, at the expense of the corresponding new bank, employ accountants or other persons to assist him in investigating such accounts; and (c) may, in relation to such accc;wnta" ~4ne ~ custodian or any 04icer or employee of the cor~eqq~di:j),g" pew :bfillk ,(tfi),evuy,&uditor of a correepondini~uw,bu)k, aaallmake ' report to the~entral government upon tae,amnalbayao&llbeet,aad accounts and in every such report shall state-s (a) whether, in his opinion, the balance-sheet is a !ull-~ fair balance-sheet containing all the necessary particulars and is properly -,drawn up so as to exhibit ii 'true and fair view of the' affairs· ()f the cor~espol1dingnew bank, and in- case he had celled for any explanation or information, whether it has been given, and w~~ej: it is satis- 10 factory; (b) whether or not the transactions of the corresponding new  :bank, which have come to his notice, have been within the powers -of that bank;  (c) ,whether or not the returns received from the' offices and is branches of the corresponding new bank have been found adequate for, the purpose of his audit; ,,(d) whether the profit and loss account ~hows a true qala~ of profit or loss for the period covered by such account;, add (e) any other matter which he considers should be brought to 20 the ngtice of the central government (5) 'the l'eiport of the auditor shall be -verified, signed and transmitted l to:the central government "',(6) 'the auditor shall also forward a copy of the audit report to the -corresponding new bank and to the reserve bank los (7) after making provision for bad and doubtful debts, depreciamon ,in _assets, contributions to staff and superannuation funds and all o~er matters for which provision is necessary under any law, or which $l'e _ usually provided for by banking companies, a ,corre~pqnding qilw i~nk shan transfer the balance of profits to the central governu:lent 30 (8) the central government shall cause every auditor's report and report on the working and activities of each corresponding new bank to be laid for not less than thirty days before each house of parliament as soon as may be after each such report is received by tl)e central gov-1if1lldent 3'  '·u-f-or the purposes of the income-tax act, 1961, every cor~e~~-fa ot 1911 -ing dew- bank shall be deemed to be an indian coiil/?any and a cod)pany in which the public are substantially interested corni-poriing new bank deemed to bean indian company "'liz' (1)' :every' person holding oftice, immediat~ly be~ore the~om­-meeeement' of- ·this act, as chairman of an existing bank shah, if he be- 40 aemes 'oustodian of the corresponding new bank, be deemed,  (in  such -eonunencement, to have vacated office as suchchairlilan vacation of ofllceof chairman, etc (2) save as otherwise provided in sup-section (1), every officer or mhe!"~mployee of an existing bank shall become, on thecommenc;~ent of this act, an officer or other employee, as the case may be, of the carres- 4s petmhg41ew bank and ·shall· hold his office or service in- that bank on the "  ·tel'me  and conditions' and with the ijame rights to pension, gratuity tq,- of!\th!'ejdtjtttg :'blftlt hm',ilt)tj 'b~ ~trahsmnm:'td"an1! 'ftstlm hil-t!~ ~~ n  1 batlk ~aft'~titlef1;d m- 'so ,u"mjs'8ftti luntfr ibl! , ,~ ployment ini)_'e'ot'ft!s~« 1\~w"blmlt ig·tlttrrttnatett~t uwti1~~~' tlf s muneration, terms or conditions are duly altered -by the, cgi'i'8ipollding new, bank (ay' f\ir·th~ ~rson~' wh~ immmi~t~ly 'befo're the conunenoement of ttlls' act'we~ 'the' trune~s 'for' any pension, provident,gratclity or other like 'funtl constit\lted'forth~ oft\cers or other employees of :an existb1g 10 bank, there shall be substituted as trustees such' persons as the central government may by general or spec:ial 'order; ,specify (41 notmthstatldlng anything contained iii the industrial'dispjltet 1 of 1947 act,' 194'7; or in any other liiw f6r'the time being hi fotce, the transfer of'the servlees of' any offtcer or other employee from an ,e~strng, b~iik i sto a corres~ndi'ng new' bank' shall not entitle such' offlc~r or other employt!e to any compensation under this act or any other law for the' time being in force and no stlch claim shnll be entertained 'by any court, trl~ bunal or other authority : '\ : 0bl4l  ~  t,t~: lity~ secrecy  13, (1) e\rery corresponding new bank shall observe, except as other-wise required by law, the practices and 'usages customary among bankers, 20 an'd, in' particular, it shall not divulge any inf()rmation relatfilg to or to the affairs of its constituents except in ci1"cumstallces in which it is, in ~d8ft~ with,iaw or prbetieesanci 'usages curt&mart arn'otllg 'barivers, ~shy'or' appropriate fm' the- correspontungnewb8l\k-to 'chvullte''suah 2s informamon ' (2) every director, member of a local board or a committee, or 8udftof, adviser, officer or other- employee of a cqrresponding new" bnk 811lall, before entering upon his duties, make!' a ooclaration of ,fidelity anci"s8cl'ec:y' in the form set out in the third schedule 30 (b) evert ctlstodl8fl of a eor~sfjiot\dft1'g n'ew' ba"" swau,' - "soml' at pouibl"e'; mllk~ a 'declaration of ft"tl1!lity and secrecy in' the' fotm setout in the third schedule 14 every custodian ofa corresponding new bank shall be deemed to bea public servant for the purposes of chapter ix of 'the indian penal custodian to be publlc servant 45 of 1860 35 code  15 (1) all acts done by the custoaian, acting in good fatth, shall, notwithstanding any defect in his appointment or ill the proaedure,be valid '(2l"nd 8d"ot:-proceedihgc'ofafty~a~: of·~tm d1" a'l~allboard or committee-'of ll' ciormpoll\ttn'!-'nttw' bank shall 'beo innlfd' i'mety ,on 40 th~  ground of the,--eltisteac'e'oif a1tyvaelltreyo tn, or'dttfett in the 'coiw~tion certain defects not to invalidate acts or proceedings c1f~ sllch'boani'or committee, atth!,'case mlly ~ '(3)' all acts done by a person acting in good fai~h a&a director or member of a local board or committee of a correspondi~:new ~ank shall be valid, notwithstanding that it may afterwards be ?lscovered that his appointment was invalid by reason of, my defeet 01' ~_lifteation of 45 had tet'fllinated by virtue of any' provbwn contained'llt any law' for the time being in force: provided that nothing in this section shall be deemed to give validity to any act by a director or member of a local board or committee at a corresponding new bank after his appointment has been shown to the corresponding new bank to be invalid or to have terminated indemnity 16 (1) every custodian of a corresponding new bank and every officer s of the central government or of the reserve bank: and every officer or other employee of a corresponding new bank, shall be indemnified by such bank against all losses and expenses incurred by him in or in relation to the discharge of his duties except such as have been caused by 10 his own wilful act or default (2) a director or member of a local board or committee of a corresponding new bank shall not be responsible for any loss or expense caused to such bank by the insufficiency or deficiency of the value of, or title to any property or security acquired or taken on behalf of the corresponding is new bank, or by the insolvency or wrongful act of any customer or debtor, or by anything done in or in relation to the execution of the duties of his oftlce unless such loss, expense, insufficiency or deficiency was due to any wilful act or default on the part of such director or member 17 any reference to any existing bank in any law, other than this act, 20 or in  any contract or other instrument shall, in so far as it relates to the undertaking which has been transferred by section 4, be construed as a reference to the corresponding new bank conatruction of references toexiltlnl banb dlsaolution 18 no provision of law relating to winding up of corporations shall apply to a corresponding new bank and no corresponding new bank shall 25 be placed in liquidation save by order of the central government and in such manner as it may direct power to make regulations 1'9 (1) the board of directors of a corresponding new bank may, after consultation with the reserve bank and with the previous sanction of the central government, make regulations, not inconsistent with the 30 provisions of this act or any scheme made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of this act (2) in p~rticular, and without prejudice to the generality of the foregoing power, the regulations may provide for all or any of the following is matters, namely:-, , '(a) the powers, functions and duties of local boards and restrictions, con'ditions or limitations, if any subject to which they may be exercised or performed, the formation and· constitution of local committees and committees of local boards (including the number of 40 members of any such committee), hie powers, functions and duties of such committees, the holding of meetin~s of local committees and committees of local boards and the conduct of business thereat;  '(b) the manner in which the business of the local boards shall ,_ be transacted and the procedure in connection therewith; 4s (c)" the· delegation of powers and functions of the board of directors of a corresponding new bank to the general manager, dir@~~qr, om~qf qr other employee of tliat b~nk; i ; i  ,(d) the conditions or limitations subject to which the crirresf>dnd-mg ne~ bank may appoint advisers, officers or other employees· and fix theu' remuneration and other terms and conditions of service; 5 " (e) the duties and conduct of advisers, officers or other employees of the corresponding new bank' , i <f) the establishment and maintenance of superannuation, pension, provident or other funds for the benefit of o1bcers or other employees of the corresponding new bank: or of the dependants of such officers or other employees and the granting of superannuation allowances, annuities and pensions payable out of such funds; 10 (g) the conduct and defence of legal proceedings by or against· the corresponding new bank and the manner of signing pleadings; (h) the provision of a seal for the corresponding new bank: and the manner and effect of its use; i (~) the form and manner in which contracts binding on the cor" responding new bank may be executed; (j) the conditions and the requirements subject to which loana or advances may be made or bills may be discounted or purchased by " the corresponding new bank; (k) the persons or authorities who shall administer any pension, provident or other fund constituted for the benefit of officers or other employees of the corresponding new bank or their dependants; (l) the preparation and submission of statements of programmes of actvities and financial statements of the corresponding new bank 205 and the period for which and the time within which such statements and estimates are to be prepared and submitted; and (m) generally for the efficient conduct of the affairs of'the cor  responding new bank (3) until any regulation is made under sub-section (1), the articles of association of the existing bank and every regulation, rule, bye-law or 30 order made by the existing bank in force immediately before the commencement of this act shall be deemed to be the regulations made under sub-section (1) and shall have effect accordingly and any reference therein to any authority of the existing bank shall be deemed to be a reference to the corresponding authority of the corresponding new bank anq until 35 any such corresponding authority is constituted under this act sliall be deemed to refer to the custodian i 10 of 1949 20 (1) in the banking regulation act, 1949,-amend  ment of (a) in section 34a, in sub-section (3), for the words "and any; certain subsidiary bank", the words, figures and brackets "a correspondidgc - enact bank constituted under section 3 0:( the banking oldpanlu ment& ~~:quisition and transfer of undertakings) act, 1980, an,d any subsi-- "diary bank" shall be substituted; 45 (b) in section 36ad, in sub-section (3), for the"word8 "and any b 'di bank" the words figures and brackets a corresponding suslary,'  ani" new bank constituted under section 3 of the banking comp as ~ai;q~n and tnn~er of  undej:~~, ~t,l88p"ancilan,8ubs1 ~  ~"_ahall,be~\l~~d; i,e);  eection; 51,·4&r' h '1ml'ds 'hor·bl'ty'other 'ba1tlting idstttuttcm dotified~y ~ g~al:t~o~tqjq,,~b!n,~ ,behl,1('  ~0ifs;ftgures and brackets "or any correspondin~ "new  bau ~ ,,~4er 5 section 3 of the banking companies (acquisition and transfer of un--deiltuidl') iatt,ij860,' or'-eny ·,tlther banking· institution' doti8ed ~y ,  cedtrajr govemment;in his dehatf""bhdll--be subltittrted (2) in the ijidustrialdi,5putes ac,t  1947 • in iection~ in clause , ~bb) , for 14 of 1947 the words '1and 8fjy s\lqsi~qi' -j~", ~ liro~, fipesmd ,~~ ~~a 10 corresponding new bank constituted under section 3 of the banking compadies i "'cquifdlicm:add'l~,of: undertaking,) am," t9lo,' add any subsiiiaryhdeak"!illui1l1 be se~ted ,~ ld ue auwng oempanies: (legal ;pnctiftonen~' (!)lients'·accounts) act, 1949, in section 2, in clause (a), for- tjle wods" "ll1d· any mlbsidil!'y is 46 of 1949 bank:', 1;he "orqs,1 ~esalld  bfadi~ts '~a ~q~ponwpg~a ~ constituted under section 3 of the b~co~~ (~lli:iiuonaod~-fer of undertakings) act, 1980, and any subsidiary bank" shall be su~ (4) in the deposit insurance and credill guarantee,~rporatiqll ~t, 20 1961, in section 2, in clause (ee), after the figures "1970", the words, figures 47 of 1961; md"''braekats"dr·· a"correspoa:1din:g 'newi  babk'ccmstitumd·· undel"6eeuon 3 of the (bablring' eompanies ' (mq'lli2ntion' 8lld"'i'raneler ·bff underi8kinga) act, 198()" shull' ,be inserted (j)11id be-$tata ~pieibhlra1 eactiu c:~atiolas_kt;1i6b,tiq eection 2s 2, id·bla1lle1·(ti) ,:e1'lltheljisures·"ltqo:',tibe'iyloais,l~ andbratkets repeal and saving "or"'oije"'8poddijlg'j_~7}/bankuouwuted lultilej3~qq~3;·oj ,ule an~ 60 of 1968 companies (acquiswdil)8i1d:tr&djtier of·~) ~t,lsoo" ~l be ~r¥ i n (1) the banking companies (acquisition andtransfer of under- 30 3 of 1980 takings), ordinance, 1980, is hereby repealed i fj) ~otwhataj:1ding such repeal, 8l)~ 'done or any action'taken, inclup,iagapy order ,mad~, notification issued or'direction:given,~der the"'~~,~qe deemed to have been do~e; taken, made, lssued or atvfl~,:aa,~,~, jdfly'b~, :un4e':r the corresport~g pro\r'isi<ms- ot-'thls-!s act 'i j -:," rtui j'l8st:-scidvule , tt/ee- se~ons"l2, 3 and4) |                 | existing    | bank    ||-----------------|-------------|---------|| - corresponding | new         | bank    || column 1        |             |         || 40              |             |         || 4               |             |         || ,~              |             |         || :ihet"          |             |         || l~liaitld       |             |         ||               |             |         || andhra-:ba1lk   |             |         |eorperlti8b!~ umied  ' cojpql'auon bank the new'batut otlrt&a bimited  :-liiaw~t of:lwua the oriental bank of commerce limited -' '0i'iemalubaakro'comjdmre the 'padj1lb ~fbu:k, wanit8d ~b,aud sind, bank 45 vij81a-15adk'ldjiiited 'iv4jfjl~ baak ----~ip-;------ - the second schedule(see section 6) | name                  | of       ||-----------------------|----------|| existing              |          || bank                  |          || amount                |          || s the                |          || 'arulha             |          || i                     |          || banki                 | limited || (in                  |          || lak:bs                |          || of                    |          || rupees>              |          || "'10                  |          || coj'poration          |          || 'bank                 |          || limited               |          || 180                   |          || "i!lo                 |          || the~"'tbank{·of       |          || l                     |          || india                 |          || i                     |          || limbed                |          || tlulor1ental         |          || ~of                 |          || codlll)etce'limiteci |          || 100                   |          || the~                  |          || 9,upiab;              |          || addsind·           |          || baak;                 |          || l,imved               |          || 10                    |          || vij,a                |          || ;baak11rimmd          |          || ',                   |          || ,                     |          || ,                     |          || i                     |          || the                   | ,mlbo    ||                     | :210    || -                     |          ||                     |          || ,                     |          |[see sub-sections (2) and (3) of section 13] c~id&n,i), 1iidblllyajm, ~ j, ,  do hereby' declare 'that i· wtlf fbkh!tllly, trtlly·anc:l ta  i s best of my 'skfll arld abihty execute--an'(t- petlorm'-tm~duttw·in!""d"'· me as custodian;!mector,·membr--oft~f=boifd,·omem_ ofl ul' committee, auditql", adviser, officer or other employee (as the case may beo}'6f> the" "endwlddr,-operly:"" fioi t  ioj:i,uql( in 'the said· ', leki by me i 20 lfurlher'declare that i wtll'not commudiel1teol" ahowjt(t'be'eocan-nieated to ~y: person not l,egally entltledthei'eto-any1ftfofthticldftlatijl to the affairs ot the· i or~ thedaira ,ot' ~y penoanviq ljf1yde,lh1c with "he ;nndr\,mlllallawl~y·fawhi·perloll to,taapect or  b&ve 25 accels toaily bollks\~d08wllanta beloaiia, tool'in ~ p'lawiodof the· "llii&-ftlldwlpioi58e bm~ 0' the· or rto 1ule·buliaessnohaay persd1l ba¥inga,y,dlealiq cth  the· flqname,of, ocorrpon~ ·new babkt6 be fuledjn  statement of objects and reasonsto gain control over the commanding heights of the economy for the attainment of the national, social and economic objectives, fourteen major indian scheduled banks, each with deposits of rs 50 crores or more, were nationalised in july, 1969 it was then visualised that public ownership of these banks would help in more effective mobilisation of savings and their channelisation for productive purposes since the nationalisation of such banks, bank services have grown rapidly, particularly, in the hitherto under-banked rural and semi-urban areas there has also been a progressive increase in the deployment of bank resources for the neglected sectors and weaker sections of society 2 the government are committed to implement the 20-point programme vigorously in pursuance of this objective, the public sector banks have undertaken to increase their credit to priority sectors to 40 per cent of their total advances over a period of five years 3 in order further to control the heights of the economy, to meet progressively, and serve better, the needs of the development of the economy and to promote the welfare of the people, in conformity with the policy of the state towards securing the principles laid down in clauses (b) and (c) of article 39 of the constitution, si~ indian private sector banks, each having deposits of rs 200 crores or more on 14th march 1980, were nationalised by the banking companies (acquisition and transfer of undertakings) ordinance, 1980, promulgated by the president on the 15th april, 1980 the ordinance was also considered necessary for providing larger credit to priority sectors, for establishing a more effective and meaningful direction and control over the operations of these banks and also for making these banks an integral part of the national development effort the ordinance, apart from providing for the: transfer and vesting of the undertakings of the six banks in the corresponding new banks, provided for payment of an amount for the acquisition of such undertakings, the management of the corresponding new banks and other necessary and consequential provisions 4 the bill seeks to replace the aforesaid ordinance new delhi; the 3rd june, 1980 r venkataraman claus~ 4 of the bill provides for the acquisition of the undertakings of six existing banks clause 6 of the bill provides for the payment of the amounts specified thereiil and the manner in which such amounts shall be paid to the existing banks for such acquisition the aggregate amount payable will be rs 1850 crores as indicated in the secqnd schedule to the bill and is payable in cash or in central government securities, according to the option of each recipient existing bank if a recipient existiq bank opts for payment in cash only, the payment will be made in three equal annual instalments, each instalment carrying interest at the rate of 50! per cent per annum from the date of commencement of the act, namely, 15th april, 1900 if a recipient existing bank opts to take the amount, either wholly or partly, in the form of securities, it can choose either a 100year security repayable at par carrying interest at 6 per cent per annum or a 3d-year security repayable at par carrying interest at 7 per cent per annum a similar option regarding payment in cash or security or both has been provided also in respect of an interim payment of an amount equal to 75 per cent of the paid-up capital of the concerned existing bank, if it so opts the option provided under clause 6 of the bill is exercisable by every existing bank before the expiry of a period of three months from 15th april, 1980 in view of the availability of this option, it is not possible to indicate precisely the amount which will be actually payable in each financial year however, if all the six existing banks opt for payment entirely in cash, the principal amount which will be paid in each of the three years beginning from 1980-81 will be about rs 617 crores in that event, the interest payable will be about rs 50 lakhs in 1980-81, rs 6783 lakhs in 1981-82 and rs 3392 lakhs in 1982-83 apart from this recurring expenditure for the first three years, no other expenditure, either recurring or non-recurring, will be incurred thereafter in the event of some of the existing banks choosing to receive the payment of the amount in government securities, or partly in cash and partly in government securities, as provided for in the bill, the interest payable on account of payment of amount in cash ma~ be reduced while the interest payable on securities may increase de~~mding on the proportion and nature of the securities which may be lssued by the governt it ·s therefore not practicable at this stage to calculate the men  1 " - hi h '11 be amount of recurring expenditure on account of mterest w c wi payable each year clause 9 of the bill empowers the central government to make a scaeme"after  cqils1lltation·;with the resuve bank,  fat 1 cuz'j~,oui the pjovisioo&,of··theag" the··seaame wdl,i,imu'aliaj pnvitl&--formatmn r_tiblc,to·the capital-·,stnlcwn,·o£' t~ cerrellpilididlf,~llewt-:b""' tjae coutitution·-ef the-rboad4-of, dire~ oft·sllea,baak·i8bd· luoh-tneidedul, centlletiuertial,end·b\ippl8rleatal· ma  ea-may be i~: tfor dft'jidg out ·the'pjgvteion • of·,tfte,:t\et eftij7y~'sch~mefio' made1saq1lii1lci';tcf: be laid·,befon··betb·ji~uses of· ·pultlildent ad • very;~stae:ht·scum,sllanbe nltjeet tg' modification' -or annulment rby papiiament· o ••• 19"oftre·bij1empowel'8the&ard af,:dinctor of· • ce&ftipodding,w,baak··to make·rep1euor8i after ~nslllaation· wttht,the renne beak aad wi1n,the previou8 '88dction' of the· centltal·gov8l'b111et tlae mette118 in reapeet -of ' which  replation • ,may be· 'ma~ inter 'alia"l'tdate ta' thepowers,rfuactione·ildd duties -of··local, 001'4  ·1_ manner ja·wwoh the"busmea·· of· the 10del- lboardtt··shall·, be·tl'aasacted", tae  deleation-,of pew818' aad·functions o£· the- boant  of,dilleewr  of a· colwspqndiag,ll8w baak  d·foi' -silniiar· matters-tol' rthe eiloiert conducv of -its i aifan  soah regulations shall not be inconsistent with the,previsions of·tlte·ao~ or any scheme made thereunder   me matfers in respect of whl~" an~- scheme or regulations may be made' are matfers of adihl!1tstr8t1v~ delllil or proeed1ir~ 'nle 'delegatitin of 'legislative powers is, tl\~refot~, at '8 nnrmal ·chara·c:ter, - - - - - ~! ~',,: 4' ~ ••• • 341\· (1) ~   ;' - - - - " production of docu_ ments of eona dential nature 5 of 1970 21 of 1976 c; ,~i~ ) ~9j;:th,e purposes of t¥,s; sectio~ "blul~ cqmjwipy" ,iaciud~ the lndustnal development bank of india, the reserve bank, the state bank ('if indi~, a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, a regional rural bank established under section 3 of the regional rural ban~s act: 1976, am any subsidiary bank ' ' - - - - - i' 36ad (1) - - - - puniahments for certain '\ aetl~l~·" : ties in ' , relation to banking companies 5af 1970 21 -:oj, 1~76 (3)' for the purposes of this section, "banking company" includes the reserve bank, the industrial development bank of india, the state bank of india, a corresponding new bank const1tu~ under section 3 of the- banking companies (acquisition and transfer m undert~ld'ngs) act ~,l!yjo; a regional rural bank established ,unaer section, ~ of the regional rural banks act, 1976, and any subsidiary bank - - - - 23 of 1955 5 of 1970 21 of 1976 application of certain provisions to the state bank of india and oth-, : notiftacl·' banks 51 without prejudice to the provisions of the state bank of india act 1955, or any other ena'::tment, the provisions of sections 10, 13 to 15, 17, 19 to 21, 23 to 28,29 [excluding sub-section (3) 1, ,31,34, 35, 36a, 36 [excluding clause (d) of sub-section (1) j, 46 to 4/3, 50, 52 and 53 shall also apply, so far as may be, to ,~nd in relation to the state bank of india or any corresponding new bank' constituted under section 3 of the banking companies (acquisiti'bn and transfer of under:akings) act, 191o, or a regiqlilal,,r,ural ban~ established under section 3 of the regional rural banks act, '1~176, or any other banking institution notified by the central government in this behalf as they apply to and in relation to banking cnthpllhil!s:' , " '~ovide~ :th~t-    "  ;  :',  ' ••• , • i (1'"  'n ':: <-l nothing dtltained ih:dause (c) :of sub-sectloll (·1) of et:tion ,' ; ie sh1l11 ap~y ttl the citbirrtlan of the' s~te bank of inciia 01'  to 8 :/~~l: roanitger m anysubeidiary bank' 1ft ,so f~ai ·the aiclcla"lse precludes him from being a director of, or holdmg an office'!a, any institution approved by the res~rve bank; -  " (b) nothing contained in section 19 shall apply to the holdina by the state bank of india of shares in the capital of any sud1 subsidiary bank; and (c) nothing contained in section 46 or in section 47a shall apply to any officer of the central government or the reserve bank or the state bank of india, nominated or appointed as director of the state bank of india, or any such subsidiary bank or any other banking institution notifted by the central government under this section - - - - -  extract from the industrial disptrn:s act, 1947-  (14 of 1947) - • •- definitions 10 of 1949 5 of 1970 38 of 1959 z in this act, unless there is anything repugnant in the subject or context,-- - - - - (bb) "banking company" means a banking company as deftned in section 5 of the banking companies act, 1949, having branches or other establishments in more than one state, and includes the industrial development bank of india, the reserve bank of india, the state bank of india, a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970, and any subsidiary bank as defined in the state bank of india (subsidiary banju) act, 1959; - - - - -  extract from the banking companii8 (legal practitioners' clients' accounts) act, 1949(46 of 1949) - - - - z in this act, unless there is anything repugnant in the subject or context,-definitions 10 of 199 50f 1970 21 of 1976 380t 1969 (a) "banking company" means any banking company 88 deftned in section 5 of the banking companies act, 1949, and includes the state bank of india, a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfft' of undertakinp) act, 1970, a regional rural bank eatablished under section 3 at the regional rural banka act, 1978, and any sublldiary bank as deftned in the state bank of india (subsidiary banb) act, 1859; - - - - -  tlo aer, 1961(47 oj' 1961) - - - - - deftni-uodl z in this act, unless the context otherwise requires,-- - - - - 5 of 1970 (ee) "corresponding new bank" means a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970; - - - - -  extract from the state agricultural credit corporations act, 1968 (60 of 1968) - • - • •deftnitiona 5 of 1970 2 in this act, unless the context otherwise requires,-- - - - - (ii) "corresponding new bank" means a corresponding new bank constituted under section 3 of the banking companies (acquisition and transfer of undertakings) act, 1970; - - - - -  billt'o provide for the acquisition and transfer of the undertakings of certain banking companies, having regard to their size, resources, coverage and organisation, in order further to control the heights of the e,conomy, to meet progressively, and serve better, the needs of the development of the ec-onomy and to promote the welfare of the people, in conformity with the policy of the state towards securing the principles laid down in clauses (b) and (c) of article 39 of the constitution and for matters connected therewith or incidental thereto (shri r venkataraman,  minister of fin~mce) 