- bill no 208 {if 1!:t85  t~ b4nking law,s (ame~dment) bill, 1985\  billfurther to amend ~he reserve bank of india act, 1934, the state bank of india act, 1955, the state bank of india (subsid'iary banks) act, 1959, the deposit insurance and credit guarantee corporation act, - 1961, the banking companies (acquisition and transfer of undertakings) act, 1970, the regional rural banks act, 1976, the deposit insurance corporation (amendment and miscella~eous provisions) act, 1978, ·the banking companies (acquisift:on and transfer of under takings) a('t, 1980, the export-import bank of indio act, 1981 and the national bank for agriculture and rural development act, 1981 he it enacted by parliament in the thirty-51xth year of the republic of india as follows:- chi\pter i preliminarylind commencement (2) it shall come into force on such date as the central government may by notiticati,on in the official gazette, appoint and different dates may be appqint~ ~or different provisions of this act  chapter ii amendmknt to the reserve bank of india act, 19"j42 in section 17 of the reserve bank of india act, 1934, in clause (4a) in the proviso, for the words "ninety per cent of the paid-up shar~ capital", the words "twice the paidup share capital" shall be substituted 5 amcnd· mento!" act 2 of 1934  chapter iii amendment to the state bank of india act, 195tamend· ment of act 23 of j955 3 in section 40 of the state bank of india act, 1955, in sub-section (4), the woras "while it is in session for a total period of thirty days which may be comprised'in one sess'ion or in two or more successive 10 "iessions" shall be omitted  chapter iv amendment to the state bank of indj,!\ (subsidiary banks) act, 1959amcnd· ment of act 38 of 1959 4 in section 43 of the state bank of india (subsidiary banks) act i~ 1959 in sub-section (3), the words ci, while it is in session, for a total period of thirtydays which may ~ comprised in one session or in two or more successive sessions" shall be omitted  chapter v amendments to the deposit insurance and credit guarantee :}o corporation act, 196147 ot 1961 amend· mentof icction 2 5 in section 2 of the deposit insurance and credit guarantee corporation act, 1961 (hereafter in this chapter referred to as the deposit insurance corporation act) in clause (g), after sub-clause (i), the following sub-clause shall be inserted, namely: -!l5 amendmentof section 32 ii (ia) any amount due on account of any deposit with any insured bank which has been specially exempted in this behalf by the cor· poration with the previous approval of the reserve bank; or" n in section 32 of the deoosit insurance corporation act, in sub-section (2), the words u while it is in session, for a total period of thirty days go wnich may be comprised in one session or in two or more successive sessions" shall be omitted  chapter vi amendment to the b~nking companif!'! (acc;mismon and transfer of undertakings) act, 1970 355 of 1970 amend· mcfttof section 3 '1 in section 3 of the banking companies (acquisition and transfer of undertakings' act, 1970 (hereafter in this chapter referred to as the bank nationalisation act)  after sub-section (2), the following sub-section shall be inserted, namely: - ,;, "(za) notwithstanding anything ronta;ned in sub-section (2) 40 tie paid-up capital of every corre<ljhlndi_ new i bank ~onstituted under ijub-spdion (1) may from time to time be increased by-(a) nch amounts a!ll the board of diredors of the cfn'rl"s-jjondin, pew bank may, after eonsultat;on witb tbe rp~erve &ank and with the previous sanctioa of the central ; govemmcnt, transfer from the reserve fund established by such bank to such paid-up capital; (b) such amounts as the central govemment may, in eon-s sultation with the reserve bank, contribute to such paid-up capital: provided that the paid-up capital of any-such bank shall in no case be in excess of one hundred crores rupees"  8 in section 9 of the bank nat:onalisation act, in 8ub-section (2), in amendment of section 9 10 clause (a), for the words "fifteen crores", the words "one h~dred croros" shall be substituted amend· mentof section 10 9 in section 10 of the bank nationalisation act, in sub-section (8), the words ie while it is in session, for a total period of thirty days which may be comprised in -one session or in two or more successive sessions" 15 shall be omitted  10 (1) the corresponding new bank known as the "unitef;i commercial bank" constituted' under section 3 of the bank nationalisation act shall be renamed as "uco bank", and accordingly in the first schedule to the said act, in column 2, for the words "united commercial bank" 20 the letters and word "uco bank" shall be substituted change of name of united commercial bank and consequential amend· ment of the first schedule, etc (2) the change of name of united commercial bank by sub-section (1) shall not affect any rights and obligations of that bank or render defective any legal proceedings by or against it, and any legal proceedings which might have been continued or commenced by or ag~inst that bank 25 by its former name may be continued or commenced by or against it by its new name  chapter vii amendment to the rmxonal rural banks a~, 197611 section 20 of the regional rural banks act, 1976 shall be renumgo bered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely:-amend· mentof act 21 of 1976 "(2) the central government shall cause every auditor's report and report on the working and activities of each regional rural bank to be laid, as soon as may be after they are received before each 35 house of parliament"  chapter viii amendment to the deposit insurance oorporation (amendmen'l' and miscellaneous provisions) act, 197812 in the deposit insurance corporation (amendment and miscella· 40 neous provisions) act, 19'78 chapter iv' shall be omitted amend· mentor act 21 pof 1978  chapter ix amm'ildments to the banking coml'i\nies (acquisition and transfer of undertakings) act, 1980" of ]980 amendmcntof section 3 13 in section' 3 of the banking companies (acquisition and transfer of undertakings) act, 1980 [hereafter in this chapter referred to as the 5 bank (second) nationalsation act], after sub-section (2), the following sub-section shall be inserted, namely: -' "(2a) notwithstanlding anything contained in su~ection (2), the paid-up capitnl of every corresponding new bank constituted 1dider sub-scrtion (1) may from time to time be increased by-io (a) such amounts as the board of directors of tbe correspondini new hank may, arter consultation with 'the reserve bank and with the previous sanction of the central government, transfer from the reserve fund established by· such bank to such paidup capital; 15 (b) such amounts as the central government may, in consultation w;th the reserve bank, contribute to such paid-up capital: provided that the pbid'-up capital of any such bank' shall in no case be in excess of rupees one hundred cr6res:' amend-  dlcntof itdion 9 14 in section 9 of the bank (second) nationalisation act, in sub- 20 section (2), in dause (a), for ,the words "fiiteen crores", thle words "one hundred crores" shall be subsftuted amendmentof section 10 15 in section 10 of the bank (second) nationalisation act, in subsection (8), the words ", while it is in session, for a total period of ihirty days which may be comprised in one session or in two or more successive 25 sessions" shall be omitted  chapter x amendment to the exn>rt-import bank of india act, 198116 iu section 6 of the export-import bank of india act, 1981, in subsection (2), for the wol'ds "three years", the words "five years" shall be 30 substituted ameadmont of ·act 28 of 1911  chapter xi amendments to the national bank for agriculture and rural developmen'1: act, 1981blof 1981 amendment of section 6 17 in section 6 of the national bank for agriculture and rural deve- 35 lopment act, 1981 (hereafter in this chapter referred to as the national bank act),-(a) in sub-section (2) the proviso shall be omitted; (b) in sub-section (3),-(i) in the' opening portion, the words "and the board" shall 40 be omitted; (ii) the proviso shall be omitted us iii section 7 of the national bank act,-(a) in sub-section (1), the proviso shall be omitted; amend· ment of ·section 1 (b) after sub-section (1), the following sub-section shall be inserted, namely:-~)  (1a) notwithstanding anything contained in sub-section (1), the central government shall have the right tot~dninate the term of office of the chairman at any tiple before the' expiry of th~term specified un~er that sub-section by giving him a notice of 'not less than three months in 'writing or three months' ii-salary and allowances in lieu of such notice"  statement of objects and reasonsthe banking laws were last amended through the banking laws (amendment) act, 1983 which was brought into force in early 1984 since then, in the course of administering the various banking laws, a need has arisen for some further amendments to the acts governing, reserve bank of india, state bank of indi$ and its subsidiaries, deposit insurance and credit guarantee corporation, nationalised banks, regional rural banks, export-import bank of india and national bank for agriculture and rural de~elopment to achieve the following objectives:-(i) to implement the recommendations of the committee on paperss laid on the table of rajya sabha regarding laying of auditors' report and annual report of the public sector banks and financial institutions on the tables of the two houses (iii) to enable the government to increase the paid-up capital of the nationalised banks so a's to improve the banks' debt equity ratio and profitability (iii) to bring the provisions including appointment and term of office of the chairman, national bank for agriculture and rural development on par with the provisions governing these matters in the case of chief executives of public sector banks and financial institutions (iv) to change the name of united commercial bank to uco bank so as to avoid confusion in the international operations of the bank in view of the existence of a bank with the same name set up in bangladesh (v) to enable the reserve bank of india to retain the functions as the government agency to settle claims against advances notified as in default on the date the credit guarantee scheme for small scale industries was handed over by reserve bank of india to deposit insurance and credit guarantee corporation (vi) to bring the term of chairman and managing director of export-import bank of india on par with the chief executives of other banks and financial institutions (vii) to enable the deposit insurance and credit guarantee corporation to exempt any amount due on account of any deposit with an insured bank (viit) to make consequential amendment in the reserve bank of fndia act to enable the state financial corporations to borrow loans and advances not exceeding twice the amount of their paid-up share capital from reserve bank of india ?:lew delhi; vishwanath pratap singh the 10th december, 1985  president's recommendation under article 117 of the constitution of india[copy of letter no f 1/3s/8s-bo-i dated the 11th december, 1985 from shri vishwanath pratap singh, minister of finance to the secretary-general, lok sabha] the president, having been informed of the subject matter of the proposed bill further to amend the reserve bank of india act, 1934, _he state bank of india act, 1955 the state bank of india (subsidiary banks) act 1959 the deposit insurance and credit guarantee corporation act, 1961 the banking companies (acquisition and transfer of undertakings) act, 1970, the regional rural banks act, 19'76 the deposit insurance corporation (amendment and miscellaneous provisions) act, 1978 the banking companies (acquisition and transfer, of undertakings) act, 1980, the export-import bank of india act, 1981 and the national bank for agriculture and rural development act 19'81 recommends under clause (1) of article 117 and clause (3) of article 117 of the constitution of india introduction, and consideration of the above ,am ill lok sabha,   financial memorandumclauses 7 and 13 of the bill enable the central government to increase the paid-up capital of every corresponding new bank as are specified in column 2 of the first schedule to the banking companies (acquisition and transfer of undertakings) acts 1970 and 1980 from time to time at present, nlc said acts provide that the pa'id-up capital of the said banks shall not exceed rs 15 crores clauses 8 and 14 of the bill increase the present statutory limit from rs 15 crores to rs 100 crores this would enable the government to contribute to the paid-up capital of the said banks from time to time so as to improve their profitability and debt equity ratio a sum of about rs 250 crores is expected to be contributed by the central government during the current financial year in pursuance of this upward revision of the statutory ceiling the expenditure will be met from out of the consolidated fund of india and will be of a non recurring nstu,re the contribution is proposed to be got 'invested by the said banks in special securities and would, therefore, come back into the consolidated fund of india 2 the provisions of the bill do not involve any other expenditure of a recurring or non-recurring nature  annexure extract from nu: r~n: b4ljk of india al:r, 1934                      (2 oj'l~) -               -                             -                                            -                                                          - business which tile baatmay transact     17 the bank s~al1 be authorised to carry on ~d transact the several kinds of business hereinafter specified, namely:-               -                                 -                                                  -                                                                   -                                                                                    -             (4a) the making to any state financial corporation, of loans      ijl}p advances repayi!-b1e on ~e expiry of fixed ~jiods not excef!ding      pighteen ~ont1)s from the date of such loan or advance, a~inst it~~ufities of tht: ceptrijl government or of any state government, of any maturity, or against bonds i!-nd debentures i$sued by that cor-pol"jltion and guaranteed by the state gov~nment concerned and maturing within a period not exceeding eighteen months from the date of such loan or advance:    provided that the previous approval of the state government shall be obtained for the borrowing by the ,state financial corpora-tion and the amount of loans and advances granted to that corpora-tion under this clause shall not, at any time, exceed in th~ aggregate ninety per cent of the paid-up share capital thereof            -                     -                               -                                         -  extract from the state bank of india a/:;t, 1955returns (~ of 1955) - 40 (1) - - • - • - • - • (4) tbe central government shall cause the auditors' report and, the report by the cltqtral board on the working and activities of the state bank to ~ laid, 8$ soon as may be after they are received, before each house of parliament while it is in session for a total period· of thirty days which may be compr!sed in one session or iq two or mqre successive sessions - - -  - extract from the state b~ of india (subsidiary banks) ar;:r, 1959 (3& q~ 1959) ~ - - - - - 43 (1) - -  - - (:1) the central government shall cause the auditors' report and the rep,ort by the board of directors on the 'wor~ing apd activities of the s\lbsidiary bank to be laid as soon as may be after tqey are received returns to 'befumilhcd by a 'subsidiary , bank' oefore each house of parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions  - - -  i!:xtracts from the deposit insurance and cumt guarantee corporation act, 1961 (47 of 19(1)  - - - - definilion!'! 2 in this act, unless the context otherwise requires,-- - - - - (g) "deposit" means the aggregate of the un-paid balance due to a depositor (other than a foreign government, the central government, a state government a corresponding new bank, a regional  rural bank or a banking company or a co-operative bank in respect of all his accounts, by whatever name called, with a corresponding new bank or with a regional rural bank or with a banking company or a co-operative bank and includes credit balances in any cash credit account but does not include,-anoual accounts imd reporl~ (i) where a banking company at the commencement of this act or where an eligible co-operative bank at the commencement of the deposit insurance corporation (amendment) act, 1968 is working under a scheme of compromise or arrangement or of reconstruction sanction~ by any competent authority providing for the acceptance of fresh deposits, any amount due to the depositor in respect of his deposit before the date of the coming into force of the scheme to the extent it is not credited after the said date under the provisions of that scheme; or - - - - - 32 or'· - - - - (2) the central government shan cause every auditor's report and report of the working of the corporation to be laid as soon as may be al'ter they are received before each house of parliament, while it is in session for a total period of thirty days which may be comprised in one sersion or in two or more successive sessions  - - - - -  extracts from the banking companies (acquisition and '1'ransfer of undzrrraklngs) act, 1970 (5 of 1978) - • - '" •3 (1) - - - '" '" hstablishment of t:orrespond- i  (2) the paid-up capital of every corresponding new bank constituted in~ new ·lm)ier sub-section (1) shall, until any provision is made in this behalf hanks and in ·any scheme made under ~tion 9, be equal to the paid-up capital of business the existing bank in relation to which it is the corresponding new bank thforeof - - - - '" 9(1)   (2) in particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the foliuwing matters, namely::-power of central government to make scheme (a) the capital structure of the corresponding new bauk, so however that' the paid-up capital of any such bank shall not be in excess of rupees fifteen crores; - - - -  )0 (1)  '" -  '" closure of accounts and disposal of profi&s (8) the central government shall cause every auditor's report and report on the working and activities of each corresponding new bank to be lai d as soon as may be after they are recehned before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions  the first schedule (see sections 2, 3 and 4)| existing                | bank    | corresponding    | new    | bank    ||-------------------------|---------|------------------|--------|---------|| -                       |         |                  |        |         || column                  |         |                  |        |         || 1                       |         |                  |        |         || column                  |         |                  |        |         || 2                       |         |                  |        |         || ii<                     | '"      | '"               | "     |         ||                      | '"      | '"               | '"     |        || ii<                     | "      |               | ii<    |         || united commercial bank |         |                  |        |         || ii<                     | '"      | '"               |     |         ||                      |         |                  |        |         ||                      |         |                  |        |         ||                      |         |                  |        |         || '"                      |         |                  |        |         ||                      |         |                  |        |         |'"  extract from the regional rural banks act, 1976 (21 of 1976)28 every regional rural bank shall, within sixty days from the date of closure of its accounting year, send to each of its shareholders a report as to its working and activities during the accounting year immediately preceding together with a copy of its balance-sheet profit and loss account and the auditor's report in relation to accounts of the said accounting year 1 ~ -  andual '1 report to be furnisbr totlae shaff hold, - - -    extract from the deposit insurance corporation (amendmdt and miscellufeous provisions) act, 19'78(21 of 1978) - - - - -  chapreriv amendmenl: to the ~pve bank of india acr, 19349 in the reserve bank of india act, 1934, in section 17, in clause (l1a), sub-clause (a) shall be omitted amend-ment of act 2 of 1934  extracts from the banking co:m:panii's (acqmsitlon and trtonsna of undeiltakings) act, 1980 (~ of 1980)corresponding new bank add business djereof (2) the paid-up capital of every corresponding new bank constituted under sub-section (1) shall, until any provision is made in this behalf in any scheme made under section 9, be equal to the paid-up capital of  the e~~tin~ bank in ~lation to which it is the corresponding new bank (2) in particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following mattej's, namely:-power of central govern: ment to make acmes (a) the capital structure of the corresponding new bank, so however that the paid-up capital of any such bank shall not be in excess of rupees fifteen crores; closure of accounts and disposalof profits (8) the central government shall cause every auditor's report and report on the working "and activities of each co1tesponding new bank to be laid as soon 8smay be after they are received before each flouse of parliament, whue it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions   ex'iract from the export-import bank of inbia act, 19816 (1) (28 of 1981) - - - - - - - - - constitulion of board (2) the chairman and the managing director shall hold office for such term, not exceeding three years, as the central government may ilpecify in this behalf and any person so appointed shall be eligible fpr re-appointment - - - -  extracts from the national bank for agriculture and rural developmentact, 1981 (61 of 1981) - - - - - 6 (1) - - - - - board of directors (2) the chairman and other directors shall be appointed by the central ooyerru,nent in consijltation with the r~serve ]3pnk: ~   '     '  \  provided that the central government shall also consult the board with regard to any appointment (except appointment to the first board) to the offtce of managing director (3) where the central (i()vernm,ent is satisfied, i~ consultation with ,the ~rv~ b~k and the board, that it is necessary 80 to lip, it may app'~int on~ or mor~ whole-time directors with such desiptione as may ~ deemed appr~priate by that government and any :whol~time director so appointed shall also be a member of the board: provided that consultation with the board shall not be necessary in the case of the appointment of a whole-time director to the first board 7 (1) the chainnan shall hold office for such term not exceeding term of five years and shall· receive such salary and allowances as the centra] office of government may, at the time of appointment specify: cbairman and other directors, retirement and payment of provided that the chairman shall notwithstanding the expiration of his term continue to hold office until his successor enters upon his oftke - - - - - tee~,  ·a billfurther to amend the reserve bank of india act, 1934, the state bank of india act, 1955, the state bank of india (subsidiary banks) act, 1959 the deposit insurance and credit guarantee corporation act, 1961, the banking companies (acquisition and transfer of undertakings) act, 1970, the regional rural banks act 1976, the deposit insurance corporation (amendment and miscellaneous provisions) act, 1978, the banking companies (acquisition and transfer of undertak1ngs) act, 1980, the export-import bank of india act, 1981 and the national bank for agriculture and rural development act, 1981 (shri vishw4fj4th prat4p siln9h, minister of fi1lczme) 