 the reserve bank of india (amend- ment) bill, 19s7(as introducbd in loit sabra)  the reserve bank of india (amendment) bill, 1957 (as introduced in lok sabha) a billfurther to amend the reserve bank of india act, 1934 be it enacted by parliament in the eighth year of the republic of india as follows:-1 this act may be called the reserve bank of india (amend- shon title ment) act, 1957 s 2 of 1934a 2 in section 17 of toe reserve bank of india act, 1934 (herein- amendment after referred to as the prijlcipal act),-of section 17· j 0 6j ofl9si (i) in clause (4), for the words and figures "state financial corporations established under the state financial corporations act, 1951, and the principal currency authority of ceylon", the words and figures "and state financial corporations established under the state financial corporations act, 1951," shall be substituted; (ii) after clause (4b), the following clause shall be inserted, namely:-" (4bb) the making to any financial institution notified by the central government in this behalf of loans and advances repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date of such loan or advance, against securities of the central government or of any state government;"; and (iii) in clause (8a), after the words "any other bank", the words "or financial institution" shall be inserted amen~ent 3, for sub-section (2) of section 34 of the principal act, the fol~ of section 340 lowing sub-section shall be substituted, namely:-"(2) for the purposes of this section,-(a) any currency note of the government of india or bank note which has not been presented for payment within s forty years from the 1st day of april following the date of "its issue, and (b) any bank note referred to in section 26a, shall be deemed not to be in circulation, and jhe value thereof shall, notwithstanding anything contained in sub-section (2) of 10 section 23, be paid by the issue department to the central government or the banking department, as the case may be: provided that any note referred to in clause (a), if subsequently presented for payment, and any note referred to in clause (b), if directed to be paid by the central government, shall is be paid by the banking department and any such payment in the case of currency note of the government of india shall be debited to the central government,", amendment 4 in sub-clause (iii) of clause (a) of sub-section (6) of section of section 42· 42 of the principal act, for the words, figures and brackets "clause 20 , (2) of section 2 of the indian companies act, 1913 (vii of 1913) ", the words and figures "section 3 of the companies act, 1956, or an insti-i of is ,tution notified by the central governmeht in this behalf" shall be 2 substituted - r:t 5 in sub-section (1) of section 57 of the principal act, for the 25 ~ fie 7'words, figures and brackets "indian companies act, 1913 (vn of 1913)", the words and figures "companies act, 1956" shall be substituted i of 19  statement of objects and reasonsin spite of the existence of bodies like the industrial finance corporation, the state financial corporations and the industrial credit and investment corporation, medium-term finance facilities in the private sector of industry are still found to be inadequate for the purposes of the overall objectives of the second five year plan it may, therefore, be necessary to establish financial institutions to provide medium-term loan assistance to industries the reserve bank of india act is being amended to enable the reserve bank of india to contribute to the capital of such institutions as it cannot do so under the existing provisions of the act 2 opportunity has been taken to carry out certain further amendments in the act-one of them being intended to extinguish the liability of the issue department of the reserve bank of india in respect of the unencashed high denomination notes demonetized in terms of the high denomination bank notes (demonetization) ordinance, 1946 some of the other amendments are merely formal in character t t krishnamachari new delhi; the 14th may, 1957  annexure extracts from the reserve bank of india act, 1934businesa which the bank may transact no2 of 1934 - - - - - 17 the bank shall be authorised to carry on and transact the several kinds of business hereinafter specified, namely:-- - - - - (4) the making to local authorities, scheduled banks, state co-operative banks, state financial corporations established under the state financial corporations act, 1951, and the princi- 63 of pal currency authority of ceylon of loans and advances, repayable on demand or on the expiry of fixed periods not exceeding ninety days, against the security of-(a) stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any act of parliament of the united kingdom or by any law for the time being in force in india; (b) gold or silver or documents of title to the same; (c) such bills of exchange and promissory notes as are eligible for purchase or rediscount by the bank or as are fully guaranteed as to the repayment of the principal and payment of interest by a state government; liabilities of the haue department (d) promissory notes of any scheduled bank or state cooperative bank, supported by documents of title to goods such documents having been transferred, assigned, or pledged to any such bank as security for a loan or advance made for bona fide commercial or trade transactions, or for the purpose of financing seasonal agricultural operations or the marketing of crops; - - - - - (sa) the· purchase and sale of shares in, or the capital of, the state bank or any other bank notified by the central government in this behalf; - - - - - 34 (1) - - - - - (2) for the purposes of this section, any curr'ency note of the government of india or bank note which has not been presented for payment within forty years from the 1st day of april following the date of its issue shall be deemed not to be in circulation, and the value thereof shall, notwithstanding anything contained in sub-section (2) of section 23, be paid by the issue department to the central government or the banking department, as the case may be; but any such note, if subsequently presented for payment, shall be paid by the banking department, and any such payment in the case of a currency note of the government of india shall be debited to the central government - - - - - cash re,ervce of scheduled banks to be irept with the bank 42 (1) - - - - - (6) the bank s~all, save as hereinafter provided, by notification in the gazette of india,-i (a) direct the inclusion in the second schedule of any bank not already so included which carries on the business of banking in india and which-(i) - - - - - 7 of 1913 (iii) is a company as defined in clause (2) of section 2 of the indian companies act, 1913 or a corporation or a company incorporated by or under any law in force in any place outside india; - - - - - 7 of 1913 57 (i) nothing in the indian companies a~, 1913, shall apply liquidation to the bank,· and the bank shall not be placed in liquidation save by of the bank order of the central government and in such manner as it may direct - - - - - a bill further to amend the reserve bank of india act, 1934 the president has, in pursuance of clauses (i) and (3) of article i 17 of the constitution of india, recommended to lok sabha the introduction and consideration of the bill m n kaul, s~cr8tary (shri t t krishnamachari, minist~ of finance) 