 the -natiutlj\l rank flr '~\'iuc~lt~;{e "tid rur'\l development bill, 19~1(to be/as introduced in lok s~bha) -1 page 1, in the long title,-i££ "nantional" !£1!s! "nation~l" 2 ~ page 2, line 34,-~ tt of" relip "for' 3 page 4, line 19,-ill h of" ~ " f 0 r" 4~ -page 13~ line 47,-"re shedu lingread ~-ii rescheduling" 5 - p age 14, 1 i ne 34 , -!eo! "fund s·i read tlfund" -6 page 14-afte r line 48, inser!- -i' (2), no guarantee or security referred to therein shall he required in llny ciise ll 7 - page 17, line 14,-1fter "co-operative" insert "b<1nk" --,' n page 18, line 7,-for "the" re:'ld "this" --9 page 19, line 29,-f2! ·sub-sectio~n ~ "sub-sectionsr 10 page 20, line 10, :tfter "expiry oft! inrsert "a period ofll  the national bank for agriculture and rural development bill, 1981 arrangement of clausis chapter i pba,l'm1"maryclat18ls 1 short title, extent and commencement 2 defini~odl  chapter ii establishment of the national bank for agiilct1jhuu and bulat development and capital therilof3 establishment and incorporation cif national bank for aidculture and rural development 4 capital  chapter iii man'agtl\,h  "nt of the national bane5 management 6 board of director!': 7 term of office of chairman and other directors, retirement add payment of fees 8 term of office of managing director and whole-time c1frwctoa, conditions of service, etc 9 disqualifications 10 vacation and resignation of office by directors 11 casual vacancy in the office of managing director 12 meetings of board 13 • committees of national bank 14, advisory council 15 member of board or committee thereof not to participate in meetings in certain cases  chapter iv transfer of business to the national bank16 transfer of assets and liabilities of agricultural reftda~ add development corporation 17 dissolution of the corporation and repeal of act 10 of 1963 18 tr~sfer of business from reserve bank  chapter v borrowings by the national balat clauses19 borrowings by the national bank 20 borrowings in foreign currency  chapter vi credit functions of the national bank21 production ami marketing credit 22 conversion loan for production credit 23 rescheduling of loans to artisans, small-scale industries, etc 24 investment credit,m~um term 25 other investment credit 26 purchase and sale ot s\lares 27 loans to state governments for share capital coi:ltribution 28 security for credit 29 amounts and securities to be held in trust 30 direct loans 31 commission 32 issue of guarantees 33 power to impose conditions for accommodation 34 power to call for repayment before agreed period 35 national bank to have access to records 36 validity of loan or advance not to be questioned 37 national bank not to grant loans or advances against its oym bonds or debentures  chapter viiother i'unlctions of the national buo::  38 other functions of national bank 39 incidental powers 40 deposits and investments 41 credit information  chapter viii funds, accounts and audit42 national rural credit (long term operations) fund 43 national rural credit (stabilisation) fund 44 research and development fund 45 reserve fund and other funds 46 preparation of balance-sheet, etc, of national &ok 47 disposal of surplus 48 audit 49 returns  chapter ix staff clavsj1350 sta1f of national bank  chapter x miscellaneous51 obligation as to fidelity and secrecy 52 defects in appointment not to invalidate acts, etc 53 protection of action taken under the act 54 indemnity of directors 55 exemption from income-tax, etc 56 penalties 57 offences by companies 58 bankers' books evidence act, 1891, to apply in relation to national bank 59 liquidation of national bank 60 power cyf board to make regulations 61 amendment of certain enactments 62 power to remove difficulty the first schedule the second schedule  development bill, 1981 a billto establish a bank to be known as the nantional bank for agriculture and rural development for providing credit for the promotion of agriculture, nnall scale industries, cottage and village industries handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for malters connected therewith or incidental thereto be it enacted by parjiamtmt in the thirty-second year of the republic of  india as follows:- chapter i prl!:liminary5 1 (1) this act may be called the n,ational bank for agriculture and rural development act, 1981 (2) it extends to the ,whole of india short title, extent and commenceomeht (3) it shall come into force on such date as lhe central government may, by,dotifica'ion in the official gazette, appoint, and different dates' may· be 10 appointed for different provisions of this act, and any referedce in any provision to the commencement of this act shalt be construed as a reference to the coming into force of that p~vision 2 in' this act unless the context otherwise requires,-, ' deftnltions 15 20 (a) "agriculture~' includes ,animal husbandry, forestry, dairy and ' poul:ry farming, pisciculture, and other allied activities, whether or not undertaken jointly with agriculture and the expression "agricultural operations" shall be construed accordingly explanation-for the purposes of this clause, "pisciculture" includes the development of fisheries, both inland and marine, catching of fish and ad activities connected therewith or incidental thereto; (b) "agricultural refinance and development corporation" means the corporation established under section 3 of the agricultural refinance and development corporation act, 1963, and renamed under section 3a 10 of 1983 of that act as the agricultural refinance and development corporation~ (c) "board" means the board of directors of the natianaj bank; 5 (d) "central co-operative bank" means the principal co-operative society in a district in a state, the primary object of which is the financing of other co-operative societies in that district: provided that in addition :0 such principal society in a district, or where there is no such principal society in a district, the state government 10 may declare anyone or more co-operative societies carrying on the business of financing other co-operative societies in that district to be also or to be a central co-operative bank or central co-operative banks within the meaning of this definition; ~ , 2 of 1912 (e) "chairman'" means the chairman of the board appointed under 15 section 6; (i) "co-operative society" means a society registered, or deemed to be registered, under the co-operative societies act, 1912 or any other law relating to co-operattve societies for the time being in force in any state; (g) "crops" includes products of agricultural operations; 20 (h) "director'" means a director' appointed under section 6; (i) "industry in the tiny and decentralised sector" me,ans industrial concerns in the tiny and decentralised sector and "industrlal' coilcel'd"· in:' the tiny a~d decentralised sector" means an industriat concern in which the investment in machinery and plant is not in excess of rupees two lalmw or 25 such higher ,amount as the cc!dtral government may specify by notification in this behalf having regard to trends in industrial development· and' other relevant factors;  l, (i) "managing director'" means the managid'g director appoinmd under section 6; 3d (k) "marketing of crops" includes the processing of crops prior to marketing by any agricultural prociuoers or any organisation of such producers; (i) "national bank" me,ans the national bank of agriculture and rural development estabjished under section 3; 35 (",)"ngtification" means a notifica'ion published illl the official oueue; (n) "ptimiu'y rural credit society" means a co-opomrve societyr by wbateter nanie called;:"'" (1) which has as its object or business the provision of filiiridtcis fo accommodatioj1 to itsmembel'5fot agricuhuro'or apiculsul!81operatiolls or for the marketing of crops, or for rural development; and (2) the byelaws of wbicb do not permit ,admission of any other co-operative society as member: provided that this sub-clause shall not apply to the adtriissk, as 4-5 a member, of a co-opel"iltive society, which is a stllte~ve bank or a central co-operativ<: bank by reason of such bank sobsc~ to the abare capital of the co-operative society o\1t of fodds provided by , the state gojernment for the pllipose; (0) "prescribed" means prescribe<iby regulations ~de 'uod~r this act; (p) "regional rural bank'" means a regional rural bank established under section 3 of the regional rural banks act, 1976; 5 21 of 1976 (q) "rural development" me,ans development of rural are~ through any activities conducive to such development  explonation-for the purposes of tbis" cjausc-10 i (a) activities conducive to development of rural ,areas ~nciude activities relating to production of goods or provision of services in rural areas 'and activities for the ~motion of cottage and village industries, industry in the tiny and d~ntralised sector and small-scale industry and handicrafts and other ruralcraftsj 15 , (b) "rur,al area" means the area comprised in any village and includes the area comprised in any town, tbe,population,of w~ich jloes dot exceed ten thousand or such other figure as the r~erve, l:nmjk ,pijly specify irom time to time; (r) "reserve bank" means the reserve bank of india constituted under section 3 of the reserve bank of india act, 1934; 2 of 1934 20 (i) "sche4uled ~~" means a bank' for tlte time lbeigg in~~ed jn the second schedule to the reserve bani of india act, 1934; 2 of 1934 (t) "~mall-sc8ie industry" means industrial concerns in the small scale sector and "industrial concern in the sman scale sector'" means an industrial concetn-(0 in which the investment in m,a~ aud plant is dot in excess of rupees twenty lakhs or such higher amoullt as the central government ,may spe<!ify by notification in this behalf having regard to treldds in industrial development and other relevtult factors add (u) which is not an industri,al concern in the ~y aqd  ~tnl­lised sector; (u) "state co-operative bank" means the principal co-operative society in ,a state, the primary object of which is the financing of other ~alive societies in the state:  35 provided that in addition to such princip,al society in a state or where there is no such principal society in a state, the state govemmedt may declare anyone or more co-operative societies carrying on business in that state to be also or to be a st,ate co-operative bank or state co-opecative banks witbin the meaning of this definition; (v) "state land development bank" means the co-operative 1000ety which is the principal land development bank (by whatever nameca11ed) in a st,ate and which has as its primary object the providing of long-term ftnancefor agricultural development: provided that, in addition to such principal land development bank in a state, or where there is no such bank in a state, the state government may declare any co-operative society carrying on business in thal state and authorised by the bye-laws of such co-operauve society to provide long-term finance for agncullural development lo be a,l:;o or to be a state land deve- 5 lopment bank within the meanmg of this dcjinitionj 2 ol 1934, ( w ) words and expressions used herein and not d\!fined but defined in the reserve bank of india act, 1934, shall have the meadings respectively assigned to them in that act; , 2 of 1984 10 of 1949, (t) words and expressions used herein and dot defined either in this 10 act or'in the reserve bildk of india act, 1934, but defined in the banking repjlation act, 1949, shall have the meaoings respectively ,aasifed to tbem in the banking reaulatiod act, 1949  establlshmbnt of the national bank for agriculture and rural development and caplt al thereofi ll) with effect from such date as the central government m,ay, by notification in the official gazette, appoint, there shall be established for the purposes of this act, a bank to lx: known ,as the national bank of agriculture and rural development 20 l2) the bank shall be a body corporate with the name aforesaid baving perpetual succession and a common seal with power, subject to the provisions of this act, to acquire, hold and dispose of property and to contract, and may by that ~e sue and be sued establish· ment and incorporation of national bank for agriculture and rural development (3) the head office of the national bank shall be at bombay or at such 25 other place as the central government may, by notification, specify (") the natio~al bank may establish offices, ·branches or agencies at any place in india, and with the previous approval of the central government and in consultcltion with the reserve bank, at any place outside india capital 4 (1) lbe aipitai '" tile natioaal balik s be ode buddred "0i'iii 01 30 ~ , _i pnmded tbii die ceatral govemmeat may, in cousultatiod with the reserve bad  by noti&cation, bu:rease tbe said capibl up to five b1lddred crores of rapeea " " ~,,,,-,_t (2) tile capital of tile national bank sbal be subscribed to by the central 35 govel'lllllellt and die reaerve bank in equal proportions  chapter iii management of the national bankmanage_ ment, 5, (1) the general superintendence, direction and management ~ the affairs and business of the na:ional bank shall vest in a board of directors, which shall 40 exercise all powers and do all acts and things which may be exercised or done by the national bank (2) subject to the provisions of this act, the board in discharging its functions, sball act on ·business principles with due regard to public interest (3) subject to the provisions of sub-sectiqll (j) and save as otherwise proyide'd in the regulations made under this act, tbe man directq1' sb2ij also have powers of general superintendence, direction and management of the aiaifs aid eusinesl of the national bank and may also exercise '811 powers and 5 do all acts and thin wbioh may rhe exercised or done by the nati01'lal bank ('4) amy 1rilole-tbne director appointed under sub-section (3) of section 6 shall assist the managing director in the discharge of his functions under gub: section (3) andperforrn such /juties as the board may entrust or dejesate to him (5) in the discharge of his powers and fuilctions under sub-section (3), t'he 10 manqfng dir~or shah follow such directions as the cbaiiman may p , (6) in the discharge of its functions under this act, the national bank shell be guided by such di~ctiods ill matters of policy involving public iaterest aatbe central government, in consultation with the reserve bank, or the reserve bank, n19y, p in writing 15 6 (1) the 'board of directors of the national bank shad consist of the board of following, lilamely:-directors (a) a otairman; (b) two directors from amongst experts in rural economics, 1'liiial development, handicrafts and other rural crafts, viuage and cottage indus-~o tries and small-scale industries or in any other ma~ter, the specialk'n<m'te8ge or professional experience in which is considered by the central goverl1 mont as useful to the natio'na) bank; (c) three directors out 6f whom two sha1l be person~ with experience in the working of co-operative banks and one shaji be a person with 85 ~xperience in the working of commercial banb; (d) three directors from out of the directors of the reserve bank; (e) three directors from amongst the officials of the central government; " (f) two directors from amodg!lt the officials of the state govetdllm!!its; and (,) a managing director (:2) 'l1iiquumsn aod other directors shan be appointed by the -central ~t in consultation with the reserve bank: provided th'3t· the central government shall also consult the board with s5 reprd ,to ,any appoiritment (except appointment to the first board) to the office of mam!8ina director, (3;) where the central government is satisfied in coj¥u1tation with the rtletvt bank and the board, that it is necessary so to do, it may appain,t one or more whole-time directors with such designations ,as may be deemed appto--co priate by that government and any whole-time director so appointed shall also be a melilber of the board: provided that consultation with the board shall not be necessary in the case of the ,appointment of a whole-lime director to the first boarel 7 (j) the chairman shah hold office for such term not exceeding five yean and strall receive such salary and allowances as the central government may, at the time of appointment, specify: ofikfeof  cbalrman addo1ber directot8, retiremclbtud payment at fees provided that the chairman shall notwithstanding the expiration of his term continue to hold office until his successor enters upon his office 5 (2) 'the directors appointed under clauses (b) to (0 of sub-section (i) of section 6 shall hold office for a term of three years: provided th,at such director shall notwithstanding the expiration of bis term continue to hold office until his successor enters upon his office (3) the cen:ral government may, in consultation with the reserve bank, 10 remove the chairman or any other director referred to in sub-section (2) at any time before tbe expiry of his term of office after giving him a reasonable 0plk>rtunity of showing cause against the proposed removal (4) the chairman and the directors referred to in sub-sec1ion (2) shallbe paid such fees and allowances as may be prescribed for attending the meetings 15 of the board or of any of its committees and for attending to any other work of the national bank: provided that no such fee shall be payable to the chairman or any other director, who is an officer of the government or a director or officer of tbe reserve bank 20 • (j) the managing director and any whole-time director appointed under sulhection (3) of section 6 sball,-(a) hold office for such term not exceeding five 'years as the centra] govemment may, at th~ time of appointment, specify; (b) receive such salary and allowances and be governed by such terms 25 and conditions of service as the board may, with the previous approval of the central government a;nd in consultation with the reserve bank, determine: term of oftice of madalinl director add wholetime director!!, conditions of 8ervice, etc provided that the managing direc'or and any such whole-time director appqinted to the first board shall receive such salary and allowances and be 30 governed by such tenm and conditions of service as the central government may, in consultation with the reserve bank, determine (2) the central govej'lnment may, in consultation with the reserve bank, remove the managing director or any whole-time direc'or appointed under subsection (3) of section 6 at any time before the expiry of his term of-office, after 35 giving him a reasonable opportunity of showing cause against the proposed removal (3) notwithstanding anything contained in su~section (j) or sub-sectlon (2), tbe central government shall have the right to terminate the term of oftlce of the managing director or of any whole-time director appoi'llted under sub- 40 aection (3) of section 6 at a·ny time before the expiry of the term fixed under sub-section (1) by givmg him notice of not less than three months i'll writing or three month!"" salary and allowances in lieu of such notice: provided that the central government shall, before terminating tbe term of omce of the managing director or ,any wl1ole-time director appointed under sub- 4!s ~ection (:1) pf section 6, consult the reserve bank  '9 (1) no persoji shall be a director who-dilquau-fications (a) is of unsound mind and stands so declared by ,a competedt routt; 01'  -  , (b) is or has been convicted of any offence which, io the opinion of the central government, involves moral turpitude; or 5 (c) is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his creditors (2) the appointment as director of any person who is a member of parliament or the legislature of any state shall, unless within two months of the 10 date of hi appointment he ceases to be such member, be void on the expiry of the said period of two months and if any director is elected or nolllidtett as a member of parliament or of any state legislature he shall cease to be a director as from the date of such election or nomination, as the case may be 10 (1) if a director-(ci) becomes subject to 8ily of the disqualifications mentioned in section 9; or vacation and resignation of otlice by directors (b) is absent without teave of the board for more than three consecutive meetings thereof, his seat shall thereupon become vacant  -: go (2) any director may resign his office by giving notice thereof in writing to the central government, and on his resignation being accepted by the cedte,ai government or if his resignation is not sooner accepted, on the expiry of three months from the receipt thereof by the central government, he shall be deemed to have vacated his office casual vacancy in the ot'ilce ot manacinl direetor  25 11 if the managing director is by infirmity or otherwise rendered incap· able of carrying out his duties or is absent on leave oc otherwise, in circumstances dot involving the vacation of his appointment, the central government may, after consultation with the reserve bank and the board, appoint another pcrsodto act in his place as managing director during his abseoec  ,;':~  --",~ u (l) the baaed shall meet at such times and places and shall observe 30 such rules of procecluce in reprd to the transaction of business at its meetiqs as may be preec:ribed meetings of board - (2) the chairman of the board, or, if for any reason he is unable to attend any meeting, any other director nominated by the chairman in this behalf, add in the absence of such nomina,lioo, any other director ,elected by 35 the directors present at the meeting, iihall preside at the meeting of tht" iloard (3) all questions which come up before any meeting of the boaed shall be decided by a majority of votes of the directors present and voting, and in the event of ad equality of votes, the chairman, or, in his ,absence, the penon presididl shall have a second or casting vote 40 13 (l) the board may constitute an executive committee consistid& pf such number of directors as may be prescribed committees of national bank (2) the executive committee shall discharge such functions as may be pres:-cribed or may be delesated to it by the board (3) the board lihly constitute such other committees, whether consisting wholly of directors or wholly of other persons or partly of directors and partly qt,~,paiioiiii asit thidbjit and-,for swm pii1p06ee as it may ~ and every committee so constituted shall discharge such functions as may be deletated to it by the board 5 (4) the executive codunittce shall meet at such times andp1agea and shall observe such rules of procedure in regard to the transaction of business at its meetings, as may be prescribed (5) the times and places at which any committee constituted under ~ub­section (3) shall meet, the rules of procedure whicb such committee sbail observe 10 in regard to the trauaaction of busmeu at its meetings, and the feeaeqd a,ljpw-advisory council ao~s whic~ may be paid to the members of s~h committee ior _ndin&tbe mce~ of the committee and idr 6ttendina to 'iul)' other work of \pe natiooal buk shan be such as m,ay be specifie4 by that ban~ 14 (1) the ~d shall ~tute an advilory counoil cod&istiag, of siiijh 15 number of directors and such other persons who, in the opinion of the board, have special know1edce of all'iculture, agricultural credit, co--operation and' rural economics, small-scale industries, vi1l8l¥ and cotta&e iru;lustries iqid handic11lfts and other rural crafts or have special knowledge and appreciatiq~ of ~ country's overall developmental policies and in particular ovenill monetary and credit !ao polioics, wbich is conaidered by tho board m useful· to the national bank  (2) the advisory council shall advise the national bank in such matteb 81 may be referred to the advisory council b)' tho natioaaj bat   diiif __ char&e such other functions as may be entrusted or delepted to the advisory coonen by the netionajbabt 15 (3) a member of the advisory council shall hold office fof such term not e~, ave years as the national b~ may u, and r~c such _ aud allowances as may be prescribed for attending the meetinp of the adv~ coonciland for attendid& to any other work of the national bank (4) tho advisory couocil sballmeet at' sumumes and ~s ~ sbill ob- so member d! squd or com-~e such r_ of procedure in roprd to transaction of busidcwj at it  t-uw _ dja)' be ptelcribed  u a director of tqo board or 6 member of aconuaiuee, wllo- hjii any ~ or indijeit;;judiaq idtcreit ill : any' muter· comina·up for· 0gdjideaticd 8t,~ meetida of tho board or a committee thereof, shall, as soon 88 possible after role- 35 v-~ __ e qijibe ;tohiskmwiedp, disdole uatulo iof his jblereat  ""'ctio& addtbedi~  sballrberecorded in theo~sof·tbe:boai, or the pommittee, as the case may be, and the director or mo' •• sball dcit, take any part in any deliberation or decision of the board or the committee with r peel to that matter mit~ t2:i~ not to participate in meetines in certain cases  chaptbriv transfeil of business to the national bankl6 (1) on 8uc8 date aa the central go\!cll'dii1oed&, in cooaultation witl1 the rescivo baok may, by notificatign, appoint, the enure undc1'l8k:illg of ~aid­~al refrdulce and development corporation (hereafter in this c  45 rdcrrccl to 88 the "corporation") includio& all buaiaes8, property, ~a,ad liabiu~, rights, interests, privileges and obji&ations of whatever o,ature, shall stand trusferced to and vest in the national bank (2) as compensation for the transfer ~ the undertaking of the corporation to d10'~ bildk uild&t ,u1mccitiea (:1), the naaiod:al:sok shajlwitllid sa 50 molltbj from the date appointed under that subteotion· (hereafter, in this  transfer of assets and liabilities of agricultural refinance add develop':' ment corporation tion referred to as the appointed date) pay to the shareholders of the corporatu;m a sum equal to the total paid-up oapital of the corporation as on the date immediately preceding the appointed date   (3) the amount of compensation payable under sub-section (2) to the sharl!-holders of the corporation shall be apportioned among the shareholders in pro-5 portion to liieir contributions to the paid-up capital of the corporation as on the date immediately precediag the appointed date expjanation-f·or the purposes of this sub-section, ""shareholders of the corporation"" means shareholders of the corporation whose names appear, on the register of shareholders maintained under section ~ of the agricultural refi-»01 una 10 nance and development corporation act, 1963, on the date immediately precedins the appointed date ~ 10 of 1963 " (4) the national bank shull also p,ay to the shareholders of the corporatica feferrcd to in sub«ction (2) an amount calculated at the rate at which the shares of the corporation were gua1'anteed as to the payment of minimum dividcdd 15 under section 6 of the a&ricultural refinance iwld development corporation act, 19,63, for the period, if any, thet has expired in the accounting year of the corporation before the appointed date and this amount the national bank shall distribute to the shareholders of the corporation referred to in sub-section (2) 20 in proportion to the shares held by such shareholders on the date immedi,ate1y preceding the appointed dale and at the rate at wbich such shares were guaranteed as ,to the payment of minimum dividend (5) all contracts, deeds, bonds, agreements, powers of attorney, &rants of lep! representation and other instruments of whatever oot~ subsi&tida or bavin& 25 effect immediately before the appointed date and to which the corporation is a party, or which are in favour of the corporation, shall be of as full force end dect apidst or in favour of the national bank, as the case may be, and may be enforced or acted upon as fully and effectually as if instead of the corporation the national baok had been a party thereto, of as if they had been in favour of the natiojlal bank 30 (6) if iidme4iately before the appointed date, any suit, ~ppcal cf other !opt pl'qccodin, of whatever nature, is pendina, by or aaaidst the co~twn, tho siidd &ball nqt abatc, be ctiscontinued or be inluly way ploj\ldicially ~ by reason of the transfer to the natioaaj bank of thcundertekidg of the;axpo 35 ~on or of ~ contained in this act, but the suit, appeal or other proceed- - in, ~ be continued, prosecuted and enforced, by or agatnst the natioilal bank 1'1 oa'·the date appainted under lub-sootioo(l) of aectioa 16,-(d) the corporation sha:ll stand dissol'fed; and (b) tho a&ricultural reftoance and development corporation act, 1963, shall stand repealed dissolution of the corporation and repeal of act 10 of 1963 18 (1) on such date as the central government may, in consultation with the reserve bank, by notification, appoint, the assets and liabilities with the resme bidk retati8a1d-transfer of business from (a) the national agricultural credit (long term operations) fund reserv~ estabhlhed and mainulined under section 46a of the reserve bank of india bank act, 1934; add (b) the national agricultural credit (stabilisation) fund established and maintained under section 46b of the reserve bank of india act, 1934, shall stbndtnulsferred to the national bank and form part of the national rural credit (long term operations) fund referred to in section 42 and the national rural credit (stabilisation) fund referred to in section 43, respectively 5 (2) with effect from such date as the central government may, in consulta~ tion with the reserve bank, by notification, appoint, the loans and advances which the reserve bank has granted to state c~operative banks and regional rw::ai banks under section 17 [except sub-clause (a) of clause t 4)] of the reserve bank of india act, 1934, and which the reserve bank may specify by a general or special order, shall, as far as may be, become and be deemed to be loans and 10 2 of advances granted by the national bank under section 21, and the natiod8l bank shall repay to the reserve bank, the amount of such loans and advances on such terms end conditions as the central governmellt may specify, in consultation with the reserve bank (3) all ri&hts, liabilities, interests, privileges· and obligations of whatever 15 nature (including the rights and obligations arising by way of purchase, sale and rediscount of any bills of exchange and promissory notes) of the reserve bank in relation to any asset or liability referred to in sub-section (l) or any loan or· advance referred to in sub-section (2) shall stand transferred to and vest in the national bank on the date on which such asset or liability stands transferred to !zo the national bank under sub-section (1) or, ,as the case may be, such loan or advance becomes under su~section (2) a loan or advance granted by the natiod8l bank ( 4) all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature relating to an, !25 asset or liability referred to in sub-section (1) and subsisting or having effect im~ mediately before the date appointed under that sub-section or relating to any loan or advance referred to in sub-section (2) and subsisting or having effect immediately before the date appointed under that sub-section shall be of as full force and effect against, or in favour of, the natiooal bank, as the case may be, 30 and may be enforced or acted upon as fully liidd effectually as if instead of the reaerve bank, the national bank had been a party thereto, or as if they ~ beon in favour of the national bank (5) if, immediately before the date appointed under sub-section (l) or subsection (2), as the case may be, any suit, appeal or other legul procecdinp of whatever nature relating to any asset or liability referred to in sub-section (1) 35 or fjdy loan or advance referred to in sub-section (2) is pending, by or against the reserve bank, the same shall not abate, be discontinued, or be in any way prejudicially affected by reason of the transfer to the national bank of such asset or liability under sub-section (l), or as the case may be, such loan or adwnce  becoming under su~section (2) a loan or advance granted by the national bank, 40 ~r of anythina contained in this act, but the suit, appeal or other proceedings may be continued, prosecuted and enforced, by or against the national bank  chapter vborrowings by the national bank it the national bank may, for the purpose of carrying out its functions 45 under this act,-borrow-1dp by the ifatlol\al (a) iss and sed bonds and debe  tuns canying intere!t, whida bonds -i debeatures sw be ~ci by die centtal govemment as to the  ~ repa)~ 01 priddpii  d payment of interest at such rates as may be fixed by the central govemment id consultation with the reserve balik at die dme tbe bonds or debentures are issued; 5 (b) borrow money from the reserve bank repayable on deld"clnd 01' od the expiry of fixed periods not exceeding eighteen months from the date of the making of the loao or advance, on such :erms and conditions includijdg the ,terms relating to security and purpose as may be specified by the reserve bank; 10 (c) boft'ow money from the central government and from 88y other  orlty or organisation or institution approved by that govemmeat, on sueh terms and condltfous as may he agreed upon; (d) accept from the central goverament, a state government, a local, autbority, a state land development bank, a state co-opentlve bank or  scheduled bank or  y person approved by the central cwovernmcnt in this behalf, deposits repayable after the expiry of a period which shlll1 not in! aay case he less than twelve months from file making of such deposit aiut on sueh other tenus as die national bank may, with the prior'appl'o~1 of the reserve bank fix; and· (e) receive gifts, grants, donations or benefactions from government or any other source borrowings in foreign currency 20 20 (1) notwithstanding anything contained in the foreign exchange regn-46 of 1973 lation act, 1973, or in any other law for the time being in force relating to foreign exchenge, the national bank may borrow, with the previous approval of the central government snd in consultation with the reserve bank, foreign currency from any bank or financial institution io india or elsewhere 25 (2) 11ie cen~1 govemment 'may gum'8iltee;' loans takea by die niidd -  - nk under su~tion (1) as to the repayment of principal and the paymeat  "' of interest thereon and other incidental chafjes  chapter vi credit functions of the national bankproduction and marketing credit 30 11 (1) the national bank may provide by way of refinance, loans and advances, repayable on demand qr on the expiry of fixed periods not exceeding eighteen months, to state co-operative banks, regional rural banks or to any financial institution or to any class of fiooncial institutions, which are approved by the reserve bank in this behalf, for financing-35 (i) agricultural operations or the marketing of crops, or (ii) the marketing and distribution of inputs necessary for agriculture or rural development, or (iii) any other activity for the promotion of or in the field of agriculture or nltat development, or 40 (iv) hoi1(1 fide commercial or trade transactions, or (v) the production or marketing activities of artisans or of smaij-scale industries, industries in the tiny and decentralised sector vil1age and cottage industries 01' of those engeged in the field of handicrafts and other rural crafts 45 (2) the national bank may make joans and advances under sub-section (]) against the security of-(/) stocks, funds and securities other than immovable property, in which a trustee is euthorised t() invest trust money by any law for thetimc being in force; (ii) promi88ofy notes supported by documents of title to goods, such documents bavingbeen transferred, assigned or pledged to the boitowina institution as security for a loan or adwnce made for any of the putposes 5 specified in su1hection (1); provided that the national bank may, whenever it considers it necesll81)' 10 to do, accept, in lieu of the actual assignment of any ·such 5ecurity in favour of the national bank, a declamtion in writing from the borrowing institution,-(a) stating that it holds such documents of title to goods as may be set 10 out in the declaration; and (b) containing such other particulars qs may be required by the ~~tio­nal bank (3) notwithstanding anything contained in bub--section (2), the national  bank may in its discretion grant a loan or advance-15 (a) to any state co-opcrative bank if the loan or advance is fully guaranteed for repayment of principal and interest by government; (b) to any state co-qperative bank which is a scheduled bank, if the loan or advance is secured either b~ a bill of exchange or promissory note execoted by the central co-opcrative bank and a~d in favour of the 20 state co-operative bank (4) notwithstanding anything contained in sub-sections (2) and (8), the national bank may also make loons and advances ropayable on demaad or on the expiry of fixed periods not exceeding eighteen months against pronussol)' notes of a state co-operative bank or a regional: rural bank or an institution ap~ 25 proved under sub-section (j); provided that the borrowing institution furnishes a declaration in writing, setting out the purpose for which it has made loadb and advances and such other particulars as may be required by the national bank conversion loan for production credit u where the national bank is satisfied that owing to <irotlgbt,famine or 30 other natural calamities, military operations or enemy action, any stak c0-operative bank, regionral rural bank or any such financial illltitdtion or any ftn~ ancial institution falling under any such class of financial institutions, as may be approved by the reserve bank in this behalf, requires assistance under this sec- tion, it may provide to such bank or institution su~h financial assistan~ as it may 35 deem fit by way of making loans and advances repayable on the e~ptry of fixed peiiods not e~ceeding seven years and on such terms and conditions as may be specified in this behalf by the national dank: provided that loans and advances may be made under this section only for the purpose of enabling the borrowing bank or institution,-40 (i) to pay any dues tq the national bank for credit extended for ftn~ ancing agricultural operations or the marketing of crops under c1aue (i) of sub-section (1) of section 21, or (in to malee to central co-operative banks"or ,primary rural credit societies, loans or 'advances repayable on the expiry of fixed periods 1lot 45 being 1ess than eighteen months and not exceeding seven years,by way of reimbursement of loans and advances rpade by such co-opcrative banks or locleties for agricultur~ or agricultural operations, or for reimbursement of such loans or advances which have been converted into loans or advances repayable on expiry of fixed periods not being less thun eighteen months and not exceeding seven years from the date of conversion: 5 provided further that no loan or advance shall be made under this section &0 a state co-opcrative bank unless \'iuch loan or advance is fully guaranteed as to the repayment of the principal and payment of interest, by the state government 23 where the natiod81 bank is satisfied that owing to unforeseen circums-resche_ duling of loans to artisans, smallseale industries, etc 10 taj,lces the rescheduling of any loans and advances made to artisans, small-scale industries, industries in the tiny and decentralised sector, village and cottage industries and those engaged in the field of handicrafts and other rural crafts; by any state co-operative benk, regional rural bank or any such financial institution or any financial institution falling under such class of financial institutions as may 15 be approved by the reserve bank in this behalf, h'm; become necessary, it may pi-ovide to such bank or institution such financial assistance as it may deem fit by way of loans and advances repayable on the expiry of fixed periods not being less than eighteen months and not exceeding seven years against such securities all, may be specified in this behalf by the national bank: 20 provided thet no loan or advance shall be made under this section to a state co-operative bank unless such loan or 'advance is rully guaranteed as to the repayment of the principal and payment of interest, by the state government but such guarantee may be \wived by the national bank if other security to the satisfaction of the national bank is furnished, or if, for reasons to be recorded by it in 25 writing, the national bank is satisfied that the guarantee or other security is not necessary investment creditmedium term 24 the national bank shall provide such financial assistance as it may consider necessary by way of making ,to state co-operative banks, regional rural banks, loans and advances repayable on the expiry of fixed periods not being 'less toon eighteen months· and not exceeding seven vears against such securities 30 as may be specified, in this behalf, by the national bank and such loans or advances may be made for agriculture, roml development or such other purposes as the national bank may, from time to ~ime, determine: provided that no loan or advance shall be made under this section to a state oo-operative bank unless such loan or advance is fuuy guaronteed as to the repay-34 ment of ·the principal and payment of interest, by the state government but such guarantee may be waived by the national dank, if other security to the satisfaction of the natioool bank is furnished, or if, for reasons to be recorded by it in writing, the national bank is satisfied that the guamntee or other security is not necessary 40 25 (1) the nntioool bank may provide such finanda) assistance as it may consider necessary for promoting agriculture -and rural development byother in· vestment credit (a) making loans and advances: by way of refinance, on such terms and oonditions as the national bank may think fit t'o impo'se, to a srote land development bank or a state co-opcrative bank or -a scheduled bank or any 45 other financial institution approved by the reserve bank in this behalf, and also n'she"uling the payment of such loans and advances: provided that the maxlmum period for whiql any such loan or advance may be granted, whether originally or by rescheduling the payment thereof, shall not exceed twenty~five years; (b) purchasing or selling, or subscribing to the bonds or debentures issued by any bank or institution referred to in clause (a) and repayable 5 within a period dot exceeding twenty-five years from the dates on which they are issued: (c) making loans and advances on such terms and conditions as the national bank may think fit to impose, to a state co-operative bank or a scheduled bank for the purpose of enabling such bank to make loans or 10 advances to artisans, small-scale industries, industries in the tiny and decentralised sector, village and cottage industries and those engaged in the field of handicrafts and other rural crafts and also rescheduling the payment of such loans and advances: provided that the maximum period for which any such loan or advance 15 may be granted, whether origina1ly or by rescheduling the payment thereof shall not exceed twenty-five years; (d) making, where it is considered nece:qary so to do in connection with any financial assistance under clause (a) or clause (b) or clause (c) to a state land development bank or a state co-operative bank or a scheduled ~o }y,mk, loans and advances repayable on demand or on the expiry of a fixed period not exceeding eighteen months by way of refinance to such bank and also rescheduling the payment of such loans and advances for such period as tbe national bank may deem fit (2) the provisions of this section shall be in addition to, and not in deroga-~5 tion of, the provisions of section 21 and section 24 purchase and sale of shares 26 the national bank may contribute to the share capital of, or purchase and sell shares of, or invest in the securities of, any institution concerned with agriculture and rural development which the central government may notify, in consultation with the reserve bank 30 27 the national bank may make loans and advances to state governments, repayable on the expiry of fixed periods not exceeding twenty years from the date of makin~ such loans and advances, from the national rural credit (long term opemtions) funds established under section 42 for enabling· them to subscribe directly or indirectly to the share capital of a co-operative credit 35 society loans to state governments for share capital contribution security for credit 28 (1) no accommodation shall be granted bv the national bank under clause (~) or clause (c) of sub-section (1) of section 25 or section 30 or section 32 to an institution other than '3 scheduled bank unless it i~ futtv and unconditionally gu~ranteed by the govemment as to the repayment of principal and pay- 40 ment of interest: provided that no such l!uarantee sh?'l be required in cases in which security to the satisfaction of the board is furnished by the borrowing institution (2) no accommodation sha11 be !'ranted bv the national rank under clause  (0) or clause (c) of sub-section (1) of section 25 or section 32 to anv scheduled 45 bank unlc<;<; security to the satisfaction of the boord is furnished by such scheduled b a n k  '  i  ~ --, ~ -(3) notwithstanding anything contained in sulhection (i) or sub~section in which the board, for reasons to be recorded by it in writing, decides having regard to the nature and scope of the scheme or schemes for which accommodation is granted by the national bank that such security or guarantee ill dot necessaly amounta and securitiea to be held in trust 5 29 (1) any sums received by a borrowing institution in repayment or realisation of loans and advant:es refinanced either wholly or partly by the national bank shall, to the extent of the accommodation granted by the national bank and remaining outstanding, be deemed to have been received by the borrowing institution in trust for the national bank, and shall accordingly 10 be paid by such institution to the national bank, as per the repayment schedule fixed by the national bank (2) where an accommodation h'as been granted to a borrowing institution, all securities held, or which may be held, by such borrowing institution, on account of any transaction in respect of which such accommodation has been 15 granted by the national bank, shall be held by such institution in trust for the national bank direct loans 39 the national bank may make loans and advances otherwise than by way of refiaaoce to any institution approved in this behalf by the central government 011 such terms and conditions (including security) and repayable within such go period not exceeding twenty-five years as the national bank may deem fit commission 31 the national bank may receive, for the rendering of any of the services mentioned in sections 25, 30 and 32, such commission or other consideration as may be agreed upon issue of guarantees 32 the national bank may guarantee, with the prior approval of the 25 central government and on such terms and conditions as may be agreed upon, deferred payments in connection with the purchase of capital goods--(i) due from a co-operative society approved by the reserve bank in this behalf or such other institutions which may, on the recommendation of the reserve bank, be approved by the central government in this behalf, or go (ii) due from any other person and guaranteed to the national bank by a state land development bank or a state co-operative bank or a schedul~ eel bank 33 in entering into any tran5actiem under this chapter with a borrowing institution, the national bank may impose such conditions as it may think 35 necessary or expedient for protecting the interests of tbe national bank power to impose conditions for accom_ modation 34 notwithstanding anything to the contrary contained in any agreement, the national bank may, by notice in writing, require any borrowing institution to which it has granted any loan or advance to discharge forthwith in full its liabilities to the national bank-40 (0) if it appears to the board that false of misleading information in power to call for repayment before agreed period any material particular was given in the application for the loan or advance; or ·15 (b) if the borrowing institution has failed to comply with any of the  terms of its contract with the national bank in the matter a! the loan or advance; or (c) if there is a reasonable apprehension that the borrowing institution is unable to pay its debts or that proceedings for liquidation may be commenced in respect thereof; or (d) if for any reason, it is necessary so to do to protect the interesta of the national bank 35 (1) the national bank shall have free access to all such records of any institution which seeks to avail of any credit facilities from the national bank and national bank to have access to records to all such records of any such person who seeks to avail of any credit facilities from such institution, perusal whereof may appear to the national bank to be necessary in connection with the providing of finance or other assistance to such i institution or the refinancing of any loan or advance made to such person by the 0 borrowing institution (2) the national bank may require any institution or person referred to in sub-section (1) to furnish to it copies of any of the records referred to in that sub-section and the institution or the person, as the case may be, shall be bound 15 to comply with such requisition 36 notwithstanding anything to the contrary contained in any other law for the time being in force, the validity of any loan or advance granted by the national bank in pursuance of the provisions of this act shall not be called in question merely on the ground of non-compliance with the requirements of such 20 other law as aforesaid or of any resolution, contract, memorandum, articles of association or other instrument: validity of loan or advance not to be questioned provided that nothing in this section shall render valid any loan or advance obtained by any company or c()-()perative society where such company or coopemtive society is not empowered by it'! memorandum to obtain loans or 25  advances 37 the national bank shall not grant any loan or advance on the security iof its own bonds or debentures  chapter vnnational bank not to grant loans or advances against ita own bonds or debentures onibr func110ns of the national bank 38 the national bank-other functions of national bank (i) shall co-ordinate its operations and the operations of various institutions engaged ir the field of rural credit and maintain expert staff to study all problems relating to agriculture and rural development and be available for consultation to the centra] government, the reserve bank, the state 35 governments and the other iustitutions engaged in the field of rural development; (ii) may act as the agent for the central government or a state government or the reserve bank ill" the transaction of any business in respect of loans and advances granted or to be granted or bonds or debentures 40 purchaaed or subscrimd for, or to ~purchased or subs:ribed for; ~' i (iii) may provide facilities for training, for dissemination of information and the promotion at research including the undertaking of studies, researches, techno-economic and other surveys in the field of rural banking, agriculture and rural development and it may for the said purposes make 5 grants including grants by way of provision for fellowships and chairs to any institution incidental powers 39 the n~tional bank may also do all such things as may be necessary or incidental to or consequential upon the exercise of its powers, discharge of its functions and the performance of its duties, under this act, or under any other 10 law for the time being in force deposits and investments, 40 the national bank may invest its funds in promissory notes, stocks or securities of the central government or keep the moneys deposited with the reserve bank or with any agency of the reserve bank or, in consultation with the reserve bank, with 'a state co-operative or a scheduled bank: credit information 15 41, the national dank may, for the purpose of the efficient discharge of its functions under this act, collect from or furnish to the central government, the reserve bank or any banking company or such other financial institution as may be notified by the central government in this behalf, credit information or other information' lj~jiil i 20 explanation-for the purposes at this section, the expressions "banking company" and "credit information" sh~ll have the same meanings as in section 1934 45a of the reserve bank of india act, 1934  chapter viii funds, accounts and audit25 42 (1) the national bank shall establish and maintain a fund to be known as the national rural credit (long term operations) fund (2) the fund shall (in addition to assets and liabilities transferred undei' section 18) include,-national rural credit (long term operations) fund (a) sudt _ of money 118 the ceatnl government and abe state 30 go~ may coatribute from time to tn; (b) such sums of money as the reserve bank may contribute every year; and (c) such further 8ums of money as the board may contribute every year 35 (3) the amount in the said fund shall be applied by the national bank only to provide financial assistance by way of loans and advances under section 23, section 24, clause (a) or clause (b) or clause (c) of sub-section (1) of section 25 or section 27 or for the purposes of section 26 43 (1) the national bank shall estawisb and maintain a fund to be known <to 8s the national rural credit (stabilisation) fund (2) the fund shall (in addition to assets and liabilities transferred undm section 18) include,-national rural credit (stabilisation) fund (a) si:b __ of mooey as die cmtnl gov'ermuent and the state govellullellts may ~ froid time to time; 45 (b) such sums of money as the reserve' bank: may contribute every year; and (c) such rurther 811m, ,of money as the board may contribute every year (3) the amounts in the said fund shall be applied by the natione! bank 0jiiy to pl'ovi<kjoans and advances under section 22 44 ,(i) the national bank shall establish and maintain a fund to be known 5 88 the research and development pund, to which shall be credited-(a) sudl soiiib of money &'i are mmsfenble to the flbld in aecord8nce wjduedioll 47; research and development fund (b) such sums of money as the board may contribute every year to this fund from out of its annual profits; and 10 (c) such gifts, grants, donations or benefactions which the national bank may receive and which the 'board may earmark for this purpose (2) the rcseardl and ne"elopment fund shall be expended on matters of importance to agriculture, egricultural operations 'lind rural development, including the provision of :training and research facilities and the making of 15 grants under clause (iii) of section 38 45 the national bank shall establish a reserve fund and such other funds as the board may consider necessary by transferring such sums as it may deem fit, out of its annual profits and out of reuipts !from gifts, grants, donations or! benefactions, which it may receive 20 reserve fund and other funds 46 (1) the balance-sheet and accounts of the natioaal bank ,had be prepared and maintained in such form and manner as may be prescribed (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 year preparation of balancesheet, etc, of national bank disposal of surplus 47 mter making provision 'for bad and doubtful debts, depreciation of 25 assets and' all <>!her mat1lel's for whieh provision is necessary or expedient or which is usually provided for by bankers, and for the funds referred to in sections 42, 43 and 45, the national bank shall transfer-(;) for a period 01 fifteen yean, following the' accoudtlng year liuring whlda die national balik is estabiisimd, tile iuouiit ,  big(  eafter in 30 tids 8edlod referred to as sarpius) te die rnn dt  denio'  faad udder sedioll' 44; ad (ii) after the expiry of the said period of fifteen years the national bank shall, after makiog provisiolljor the fund referred· to itt clause (i), transfer half of the balance of surplus to the central government and· the 35 other half to the reserve bank audit; 48 (1) the accounts of the national bank shall be audited by auditors duly qualified to 8ctas auditors under sub-section (1) of section 226 of the companies act, 1956, who shall be llppointed by the central government in consultation :with the reserve bank, for such term and on such remuneration as the 40-contra! government may fix (2) the auditors sha!1 be supplied with a copy of the addual baiance-slleet of the national bank and it shau be their duty to exataine it together with the accounts and vquchers rel'ating thereto and they shalf have a list ddivered 10 them of all books kept by the national bank sod shall at all reasonable times 5 have access to the books, eccounts, vouchers and other documonts of the nagona1 bank (3) the auditors may, in relation to the accounts of the national bank, eu- mine any director of the board or any officer or other employee of the national bank and shah be entitled to require from the board or officers or employees of 10 the national bank such information and explanation as they may think necessary for the performance of their duties (4) tite auditors shall make a report to the national bank upod the annual balance-sheet and accounts examined by them and in every such report, they shall state whether in their opinion the balance-sheet is a fun and fair balana-c-15 sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the national bank and in case ihey had caned for any explanation or information from the board or any officer or other employee of the national bank whetber it has been given and whether it is satisfactory  ~o (5) the national bank shall furnish to the central government and the re!\erve bank within four months from the date on which the annual accounts, of the national bank are closed rnd balanced a copy of it~ balance-sheet as on the close of that year tol!ether with a eolly of the nofit and loss aer-ount for the vear and a coov of the auditors' report and a "eoort of the work-inll of the 25 national bank durin!!: the r~levant verr and the c"e'i'1tral government qhafl as 1100'1 as may be after they a're received bv it cause the ~ame to be laid befor~ each house of parliement and cau'le the rooiec; of the said b"t"n('e~qheet 17i"oftt and lo~s account and auditors' report to be puhlished in the official gazette (6) without oreiudice to rnvthin!' confllined in tbe orecedinl! sub-section 30 the central government may, at any time aoooint the comntrol1er and auditor /general of india to examine and retlott uno" th, accnuntq of the n~tion!\l dank 'and any exocnditure incurred bv him in connection with snch examination "nd ~oort shan be payable by the netioml bank to the comotroller and auditor 'general of india, 35 49 the national bank sh~i' fumi~h from time to time to the central gov-returns f'rnrnp:rf and to the reservf' rank such returnq 11<; the ccmtra) 'government 01' the re~erve bank m~v require  chapter ix staffstaff of national bank, 40 !o, (j) the nation'al bank may aopointsuch number of' officers and other i"moloyees !i~ it considers neces~arv or desirable for the efficient nerformance of its functions and determine the terms and conditions of their appointment and service (2) without prejudice to the provisions of ~ub-liection (/) it shan be imvful 45 for the national bank to utili"e, ::tnd for the re~erve rank to mak,! available the services of such statt of the reserve bank on such terms !i'ld conditioqs as may be lijt'oed upon between the national }lank and the reserve bank (3) subject to the provisions of sub-6ection (6) at any time before the expiry of six months from the appointed day the reserve bank may in public interest, transfer to the national bank, such members of the staff of reservo bank whom the reserve bank considers as engaged, or as suitable to be engaged in attending to the work of a nature which is 'iame or similar to that which 5 the national bank' may require for its efficient functioning, and upon such transfer they shall be deemed to be appointed by the national bank under sub-, section (1) with effect from the date of such transfer: provided tbat every person so transferred may, before the expiry of a period of six mon~hs from tbe appointed day, or' before the expiry of thirty 4ays from 10 sucb transfer, whichever period expires later, elect to go back to the reserve bank by exercising an option in writing to that effect, the option once exercised being final, rnd on the exercise of such option, the reserve bank shall, before the expi11ltion of '8 period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on depu- 15 tation to the national bank during the period he was a member of the staff of the national bank (4) (a) any member of the staff of the reserve bank who is not appointed under sub-section (3), may, if he so tlesires, tooke an 30plication to the reserve bank within six months from the apfyointed d:lv to he considered for 20 appointment as a memher of the staff of the national bank (b) the reserve bank may, in consultation with the national bank, consider such application having regard to the suitability of the person so applyinf the availability of vllcancies in the national bank, the exigenciec;of service in the reserve bank and the nations{ bank and such other factors as may be 25 considered relevant in this regard and, if the reserve bank is satisfied having regard to these factors, that such applicant is suitable for being so bi"pointed, recommend his appointment to the national bank (c) the national benk may thereupon, within eiehteen month~ from the appointed day, appoint such ii person applying under this sub-section, as a go member of the staff of the national bank, and on such aoj)ointment, such a person shalt be deemed to have been appointed in the national bank under sub-section (3): provided that the proviso to sub-section (3) and the i"rovi!io to sub-section (5) shall not apply in respect of such a person 35 (5) notwitbstanding anythine; contained elsewhere in this act or in any other law cr in any contract, for the time being ill force, at any time before the expiry of six months from the aprointed dav the 're"erve rank may, if it considers it necessary in consultation with the national rank go to do in the interest of the national bank, transfer on promotiot1 i,,"v member of the staff 40 ()f the national brank to the reserve bank, and on such tramfer to the reserve bank, each !iuch member of the staff sha11 be decm~d 10 be n member of the st~ff of the re!ierve bank and shan he entitled to the same ~nlal'v emoluments and other conditions of servi<:e to which he was entitle1 immediately before the date of such tmnsfer, including benefits if any, ar~ing directly out of such 45 promotion: provided that every member of the staff who is transferred as aforesaid may, before tbeexpiry of a period of six months from the appointed· day or within thirty days from such transfer, whichever period expires later, elect to go back , to the nationa1 bank by exercising an option in writing to tbatt effect, the option once exercised being final, and on the exercise of such option, the national bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed 5 to have been oil depatation to the reserve bank during the period he was ii member of the staff of the reserve bank (6) every person,-(0) who, immediately before the date appointed under sub-section (1) of section 1~ is a member of the staff of the agricultural refinance and 10 development corporation; or , (b) who is a member of the staff of, the reserve bank but whose services are being utilised immediately before that date by the said corporation, !;hall be deemed to be appointed by the national bank under sub-section (1) i, on the said date: provided that every member of the staff of the reserve bank, who is 80 deemed to be appointed, and who was not recruited' specifically for utilisation in the agricultural refinance and development corporation, may, before the expiry of a period of six months from the appointed day or within a period 20 of thirty days from the date appointed under sub-section (1) of section 16, whichever period expires later, elect to go back to the reserve bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the reserve bank shall, before the expira~ tion of a period of eighteen months from the appointed day, take back such 25 member of the staff and he shall be deemed to have been on deputation to thc national bank during the period he was a member of the staff of the national bank (7) notwitmtanding anything conltained in any other law or in any agreement, for the time being in force, no member of the staff shall be entitled to 30 claim any compensation for, or in relation to any matter concerning, his transfer, appointment or as the case may be, return, under sub-sections (3) to (6) and no claim in respect thereof shall be entertained by any court, tribun~l or other authority (8) subject to the provisions of sub-section (10) and sub-section (11), 35 every member of the staff of the agricultural refinance and development corporation or of the reserve bank who is deemed to be appointed as a member of the staff of the national bank under this section, shan be deemed to have been appointed by the national bank on the same salary, c:molu~ents  and other terms and conditions of service to which he was entitled unmcdlatcly 40 before his appointment in the national bank (9) the provisions relating to superannuation ~nefits, namely, the re~a­tions relating to provident fund and the rules relatmg to payment of gmtulty and compassionate gratuity and any other provision relating to superannuation as arc applicable to the staff of the reserve bank on the appoin!cd day shal~, 45 so far as may be, apply ttl the staff of the national bank, unless and unhl the national bank alters or amends the same: p ovided that after the appoin~ed day, any such alteration or amendment may ~ effected by the national bank as regards provident fund regulations ~ ~ce wi~ sectj(w, 6q 1hld, il$ 'l'ij&6- tm other rules in the meqoet t4ey w!9uld !\ave hoed alter~d qr ameqded but for this su1hectiqd: p,rovi~d;~r mat twr the e,xplry of· silt mouths fr~ t~,a~lefj d~ji, $e botjangcs held ~ ;th~ ·refici)'ebank of india e~~' providoot fund to the credit of any member of the staff of the r~e bank wooile soivj!;e;s an: 5 "ansferred under this section to the national bank and who does not opt to go back to the reserve bank, shall be transferred to, and held in, the plovt fund of:~ njltiqllai·bmk; on same or similar t4mj1s subj~ to which those balances ware held cadier in 'the resevie bank of indi,a empjojces' provident fund j a '(10) notwithstandina anything coomined in any other l~wj settlement, or agreement, every person 'employed by the national 'bank or wh~e services have been transferred to the national bank under this act, shall be liable to 8~rve anywheje in i¢ia (11) notwithstanding anything contained in the industrial disputes aet, 15 1947, or any other kvt' for~ ~beiijg in f,¥,ce, 0,1' iq ,aoy award, judaplcnt, 14 of 1947 ~~, deci6ion of or~cr ofaijy~dus~f\l tr~,go~r~ 0,1" q~cr,aut,l1qrity, or any ~tucqjent or aareemeij"macie arentered il)tp befq,l'c,tbe;dat,eoltransferto the ~l b~ of ule ,iervjpes of ~y,pe~nunder tbis sectio,n, the natkmal bank sb~l ~ :frqe to alte" aj,ncnd or r~~a~ in spch manner 3np to such exteat it ilo duly  c::odf~der necessuiy, any ot ~ tc;f~: ~ c~~ of  se{v~ a~able to sqch pea>qd8w~ selvie~ cu;e sq tran~ferrea,to ,tbe,n~~aj ~~ anp ~~o 8(0 ,ltppoi~ ·inthe ~ti~ c~ uqd~ this ~tiqn ex~pt that the national ;bank aqu not alief to tja~ir prej~icetbe te,qns rela~ :top~y'ment of s~~y and otl1~ emolljldents, retir~t bel\e~~ and ;elibibijity for le!tve 25 explanation-for tilt: purposes of this section, "appointed day" means the date of establishment of the national bank under section 3  ·chapter x m1sc;;j>l  aneous   -51 (1) the national bank shali not, except as otherwise required by thii 30 act or ally othe~ law~ cli~se any i~formation relating tel, or to th!! affairs of, its consti~~ ex~pt ill circujwltaa~s in whicb it is, in accordan~e with the obliga tion as to fidelity and secrecy l~w orprllctice and usage cqst()mary among b~~rs, nec~sary, ~r app~opriate fot' the national bw to divulge such information (2) every ~tor, ,member ofacodldlittee, auditor, oiia:er ~othcr ~ 35 p]oyee of tltenabollal ,bank;or of the rcsoivcbank, ,wbosesernwes"arc utilimd by the national bank ooder the pro¥isions of tbis act, sbau,  ,ore elltcrina upon his duti~s, make a de~laration of fidelity and secrecy in the form set out in the first schedule to this a,ct 52 (1) no act or proceedil'i of the board or of any committee of the 40 netioqal bank shall be questioned on the ground merely of the existeoce of any vacancy in, or def~ in the constitution, of, ttre board, or the committee, 81 the case may be defects in appointment not to invalidate (~) no act done by any petlodaetingin ,gqqcl faith as a duect01'- of the board or as a member of a com,uftee iof ithe national ibaak shall'~ 45 a~s, etc invahd merely on the 'ifound' "that he was cusqoalifted to be 8 'director or that there as any otlier defoct in his appointment protectioq of action taken under the act '53, no suit or ather legal proceeding sltan lie agahtst thenatio~al ,biflit or any director or any officer or other empldyee' of the netloital bank or 5 any othtr person 811thoristci by tbe niltlonal 'bank to discharge any 'functlonll under this act for any loss or damage caused or lik~ly to be citise8 '6y ariytltlug which is in good faith done or intended 10 be done in putsq8llce of this act or of any other law or provision having the force of law 54 (1) every director shall be indemnified by the national bank against indemnity of direett:1rs 10 all losses a'nd expenses incurred by him in, or in relation to, the discharge of 1m duties, mcept such as are caused by his own '\'itilfill' ic~ or demtjtt (2) a director shan not be responsible for any other direcbjr or for any officer or other employee of the national bank or for any loss or expenses resulting to the national bank from the insufficiency or deficiency of the 15 value of, or title to, any property or security acquired or taken on behalf of the national bank or the insolvency or wrongful act of anv debtor or any person under objil!ation to the national bank or anythinq done in good faith in the execution of the duties of his office in relation thereto 43 of 1961 55 notwithstahdinlt anythin~ contained in the lttcome-tax act, 1961, or 7 of 1964 20 the companies (profits) s\1rta); act, 1964, or any oth~r enacftntnt for the time being in force relating to tax on income, profits or gains, the national niwijk "hall not be liable to pay income-tax, surtax or any odler tax in respect of any income, profits 01' gains derived' or liny amdnnt received ~ the niltibttilljqnk exemption from incometax, etc 56 (1) whoever in anv return, bajance-sheet, or other document or in any penllltftls ," 25 information required or furnished by or under or for the purposes of 1iof proyhion of this a~t, wilfully makes a <;tatement which i<; false in anv m8~iat particular, knowing it to be false, or wilfully omits to make a material statement, !oihal1 be tffioiififfiilblc with imprisonment for a tcmt whith niay extend to itjre~ years am s'tial1 also be 1iabie to fine 30 (2) if any person fails to produce 'any 000k account or other document, or to furnish any statement or information which under the provisions of this act, it is his duty to produce or furnish he shan be punishable· with a fine wtn'01l ri1:tv extend to twb thomimjd ~t~ in r~t <'if ~a'ch offence and in tfie ca~e of a continoini!' failure, wltb" an additional' fine wt;cl'i rrlliv extend to 36 onehuhdred mpee« for evej"\l da'v durin!! w'fritofi the flilfur~ cbntinues after conviction for the first such failure offences by companies 57 (1) where lin dfferice h-ls beeri committed bv ii corrit1a1ry every person  ho at tlye time the offence was committed, was in cha~e of iftid was responsible to !~je companv for the conduct of the business of the oompaflv a!l wen 40 a'i the company, shall be deemed to be guiltv of the offence and shall be liable to be proceeded against and punished accordingly: provided tllat nothing contl'lin'ed in this sub-sectioti shall render any such person 1iable to any punishment provided in' tllis act it he ptoves that the offence was committed without "i" knowledl!e or that he e~dsed all due dili-45' gence to prevent the commission of sucl't' ofhnco (2) notwithstanding anything confllined in sub-section (1) where an offence uilder this act has been committed by a company and it is proved that tho 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 of other officer shall 5 also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly extplanation-for the purposes of th~ section-(a) "company" means any body corporate and in~ludes a firm or other association of individuals; ond 10 (b) "director", in relation to a firm, means a partner in the firm 18 of 1891 58 the bankers' books evidence act, 1891, shall apply in relation to the national bank as if it were a bank as defined in section 2 of that act baokers' books evidence act, 1891, to apply in relation to national bank liquidation of national bank 59 no provision of law "elating to the winding up of companies shall apply to the national bank and the national bank shall not be placed in liqui- 15 dation save by order of the central government and in such manner as it may direct power of board to make regulations 60 (1) the board may, with the previous approval of the central gov~ ernment and in consultation with the r~serve bank, by notification, make regulations not inconsistent with this act to provide jor all matters for which 20 provision is necessary or expedient for the purpose of giving  effect to the provisions of this act (2) in particular and without prejudjce to the generality· of the foregoin, power such regulations may provide fo~ all or any of thefottowing matters, namely:-(a) the fees or allowances that may be paid  to the directors or m~mher4j of the advisory council; (b) the times and places of the meetings of the board or the executive committee or the advisory council and the procedure to be followed at such meetings includin~ the quorum nece!lsary for tile transae- 30 tion of business; (c) the number of directors constitutin~ the executive committee and the fuj1(;tions that such committee ~han dischar~e; (d) the manner and term!! of issue and redemption of bonds and debentures by the national 'bank; 35 (e) the conditions which ~he natioool bank may impose in granting loans and advances; (f) the manner and conditions rubject to which the n'ltional bank may borrow in foreign currency; (g) the form and manner in which the balance-sheets and the 8c- 40 counts of the national bank sh,11 'e prepared or maintained; (h) the forms of returns and statements whil;h the nstional bank may require under this act; (i) the duties and conduct, salaries, allowances and conditions of service of officers and other employees; 5 (j) the establishment and maintenance of provident or other benefit funds for employees of the national bank; and (k) such other matters for which the board may consider it expedient or necessary to provide for by way of regulations (3) any regulstion which may be made by the board under this act may 10 be made by the reserve bank, in consultation with the central government, before the expiry of t]uee months from the date of establishment of the national bank, and any regulation so made may be altered snd rescinded by the board in the exercise of its powers under this act (4) the power to make regulations conferred by this section soon include 15 the power to ~ive retrospective effect to the regutlations or any of them from a date not earlier than the date of commencement of this act, but no retrospective effect shan be given to any regulation !io as to prejudicia1jy affect the interests of any person to whom such regulation may be applicable (5) the central government shall oouse everv regulation made under this 20 act to be 1eid, as soon as may be after it is made before each house of parliament while it is in session, for 'a total period of thirty days which may be comnri~ed in one session or in two or more successive sessions nnd if before the expiry of the session immediately following the sec;sion or fhe' siicc~sive sessions aforesaid both houses aj!tee in makin/! anv modification io the reguletion :2 5 or both houses agree that the rel!ulation should no! be made the re"li'tation shall thereafter have effect onlv in such modified form or be of no effect as the case may be; so, however that any such modifi08tion or -annulment shall be without prejudice to the validity of anything pre~ously done under tbat regulation amendment of certain enactments 30 61 the enactments specified in the second schedule to this act shall be amended in the manner provided therein and unless otherwise provided in ,that schedule, such wnendments sh!lll take effect on and from the date of establishment of the national bank under section 3 6% if any difficulty arises in ,"ving effect to the provisions of this act, power to 35 the central government may, by order, not inconsistent with the provisions of r~:;:lty this act, remove the difficulty: provided that no such order shan be made after the expiry of a period or three years from the commencement of this act  tile first schedule[see section 51,(2)]  declaration of fidelity and secrecyi do hereby declare that t will faithfully, tr~ly and to the ~ of my ~ki1l nnd abihty execute and perform ~he duties required of ~ as director, aud~tor, officer or other employee (as the case ma~ be) of the national bank for agncu1-lure and rural development and which properly relate to the oiioe or position held by me in the said national bank i further declare that i will not communicate or allow to be communicated to any person not legally entitled thereto' any ,inf0rdati~n relating to the ·affair~ of the n ational·bank for agriculture ·and rural development or to the affairs 5 df f1d1 pet'son  having - idly dealing with the said national ba ft k nor will i allow any such person to inspect or have access to aqy books or doeulnmts ~ging to or in the possession of the national bank for agriculture and rural development and relating to the business of the said nation~l bank or the business 'of any person having any dealing with the said national baok  the second schedule (see section 59) amendments to certain enactments part i amendments to the reserve bank of india aer, 1934 (2 gj! 1934)amendments 1 in section 2,-fa) clauses (a), (4ii), (bi~, (bii)j (biii) , (biv), (tw);(b"iu)~ (ci)1 (gi8t) (di), (ciii), (civ), (cv) and (i) shall be omitted; (b) after clause (ee) , the following clause shall be inse~ed, namely:-'(ccc) "national bank" means the national ban~ for agri- 25 culture and rural development established under section 3 of the national bank for agriculture and rural development act, 1981;'; (c) after clause (g), the following clauses shan be, inserted, namely:-go «h) ",gricultural operations", "cent4a! oo-<>pe'l!atwl! bank", ''<:o-operative society", "a'aps", "marketing' at c~ops", "pisciculture", "regional rural bank" and "state co-aperative bank" shall have the meanings respectively assigned to them in the national bank for agriculture and rural development 35 act, 1981; (i) "oo-opcrative hank", "cqooperative <1redit society", "director", "primary agricultura1 credit society", "primary co-operative bank"'" and ~rimary credit socltty" shaithave the meamngs respecttv&ly assigned to them in pitt v of the bankklg'regulation 40 aet, 1"0;' 2 in section 8, in subsection (2), after the existing proviso, th6 following proviso shall be inserted, namely:-5 "provided further that the central government may, in consultation with the bank, appoint a deputy governor as the chairman of the nattonalbank, oil such terlll& iuld condition, as that government may specify" 3 in section 17,-(0) for clause ·(4aa), the following :cibu8e shall be substitutedj namely:-to u(4aa) the making of annual contributions to the national rural credit (long term operations) fund and the national rural credit (stabilisation) fund established under sections 42 and 43, respectively, of the national bank for agriculture and rural development act, 1981;"; (b) for clause (4e) , -the following c1aw;e shall be subsutqted, namely:-"(4e) the making to the national bank of loans and advances repayable on demand or on the expiry of' fixed period not exceecung eighteen months 'from the date of making of the loan or advance, either-!ao (i) against the security of stock~, fun~ and secwities (other than immovable property) in which a trustee is authorised to invest trust money by any law for t~ time being in force in india; or s25 (ii) on such other terms and conditions cas the b~kmq specify;"; (c) in clause (sa), for the expression "agricultural reftnance and development corporation", the expression "national bank" shall - be substituted 30 "'  f«sub  section (3) of seetion 33, the· following sub-section shall be iulbstituted, namely:-35 "(3) the remainder· of ille assets shall be held -in rupee coin, government of incua rupee securities of any maturity, promissory notes drawn by the national bank for any loans or advances under clause (4e) of section 17 and such bills of exchange and promissory notes payable in india as are eligible for purchase by the bank under sub-clause (a) or sub-clause (b) or sub-clause (bb) of clause (2) of section 17 or under clause (1) of section 18" 5 in section 42,-(a) in the e~lanation occurring after sub-section (1), in subclause (io of clause (c), for the expression "agricultural refhlance arui development corporation", the expression "national bank" shall be substituted; (b) after sub-section (6), the following sub-section shall be in-aerted,··namely:-45 u(6a) in considering whether a state co-ope1'a\ive ,bank or a regional rural bank should be included in or exc1'l1ded from the second schedule, it shall be competent for the bank to a(!t on a certificate from the national bank on the question whether or not a state co-operative bank or a regional rural bank, as the ease may be, satisfies the requirements 88 to paid-up capital and reserves or whether its affairs are being conducted in a 1) manner detrimental to the interests of its depositors" i for section 45, the following section shall be substituted, namely:-appointthent ot agents 38 of 1058 "45 (1) unless otherwise directed by the central government with reference to any place, the bank may, having regard to public interest, convenience of banking, banking development and sueh it) other factors which in its opinion are relevant in this regard, appoint the nadonal bank, or the state bank, or a corresponding new bank constituted unoer section 3 of the banking companies (acquisition and trans'fer of undertakings) act, 1970, or a corresponding new bank constituted under section 3 of the banking companiell (acqui- 15 aition and transfer of undertakings) act, 1980, or any subsidiary 40 ot1980 bank as defined in the state bank of india (subsidiary banks) act, 1959, as its agent at all places, or at any place in india for such purposes as the bank may specify (2) when any bank is appointed by the bank as its agent under 110 sub-section (1) to receive on behalf of the bank any payment required to be made into the bank, or any hill, handies or other securities required to be delivered into the bank, under any law or rule, regulations or other instructions having the force of law, the same may be paid or oelivered into the bank so appointed as 25 the agent of the bank" 7 on ano from the date appointed under sub-section (1) of section 18 of the national bank for agriculture and rural development act, 1981, for sections 46a and 46b, the following section shall be substituted, namely:- "46a the bank shall contribute every year such swns of money as it ma:y consider necessary and feasible to do so, to the national rural credit (long term operations) fund and the national rural credit (stabilisation) fund established and maintained by the national bank under sections 42 and 43, respectively, of the national 35 bank for agriculture and rural development act, 1981" contribution to national rural credit (long term operational fund and national rural credit (stabili sation) fund 8 for section 54, the following section shall be substituted, namely:-"54 the bank may maintain expert staff to study various a&o pects of rural credit and development and in particular it may,-rural credit and developmed't, (a) tender expert guidance and assistance to the national 40 bank; (b) conduct special studies in such areas as it may consider necessary to do so for promoting integrated rural develop ~mert"  part ii amendments to the banking regulatron acr, 1949 (10 of 1949)amendments 1 in section 5,-5 (i) after clause (h), the following clause shall be inserted, namely:-i (ha) "national bank" means the national bank for agriculture and rural development established under section 3 of 10 the national bank for agriculture and rural development act, 1981;'; (ii) after cla~ (j>, the following clause shall be inserted, namely:-- 15 - (;a) "regional rural bank" means a regional rural bank established under section 3 of the regional rural banks ~ct, 1976;' 21 of 1976 2 in section 23, after sub-section (4), the following sub-sectio,a shall be inserted, namely:-110 1/ (4a) ally regional rural bank requiring the permission of the reserve bank under this section shall forward its application to the reserve bank through the national bank which shall give ita comments on the merits of the application and send it to the reserve bank: provilled that the regional rural bank shall also send an advance copy of the application directly to the reserve bank" 3 in section 24, to sub-section (3), the following proviso shall be added, namely:-"provided that every regional rural bank shall also furnish a copy of the said return to the national bank" go 4 in section 25, to sub-section (2), the following proviso shall be added, namely:-"provided that every regional rural bank shall also furnish - copy of the said return to the national bank"  5 in section 26, after the existing proviso, the following proviso 35 shall be inserted, namely:-"provided further that every regional rural bank shall also furnish a copy of the said return to the national bank" 6 in section 27, after sub-section (2), the following sub-section shall be inserted, namely:-ii (3) every regional rural bank shall submit a copy of the return which it submits to the reserve bank under sub-section (1) also to the national bank and the powers exercisable by the reserve bank under sub-section (2) may also be exercised by the national bank in relation to regional rural banks" 7 for section 28, the following section shall be substituted, namely:-power to publish tntormallon "28 the reserve bank or the national bank, o:r both, if they consider it in the public interest so to do, may publish any information obtained by them under this act in such consolidated form as they think fit" 5 8 in section 31, after the existing proviso, the following proviso shall be imeried, namely:-"provided further that a regional rural bank shall furnish such retlll'l1s ,also to the national bank" t in sub-section (3) of section 34a, after the words "the industrial 10 dev~lqpment ban)t of inroa,", the wor-ds "national ban1{" shall be :inserted 1~ in section 35, after sub-section (5), the following subsection "' shall be inserted, namely: -~ " (6) the powers ex,ercisaqle by the reserve bank undln' tilt is section in relation to regional rural banks may (without prejudice to the exercise of such powers by the reserve bank in relation to any regional rural bank whenever it considers necessary so to do) be exercised by the national bank in relation to the regional rural banks, -and accordingly, sub-sections (1) to (5) shall apply :ln re- 510 lation to regional rnral banks as if every reference therein to ~e reserve bank included also a reference to the n ationa! bank,", 11 in sub-section (3) of section 36ad, after the words "the industrial development bank of india,", the words "national bank" shall be insaria«\ !l5 12 in section 417, for the words "the reserve bank" wherever they occur,the words "the reserve bank or, as the case may be, the national bank", shall be substituted,  13, in section 56,-(i) in clause (c), for sub-clause (i) the following sub-clauje shall be substituted, namely:-go "(i) after clause (ee), the following clauses shall be in serted, namely:-'(cci) "co-operative bank" mearu a state cooperauve b$dk, a central cooperatiw bank and· a primary eo-opera-q tive j>ank; ,,5 (ecu) "co-operative credit society" mei:jns a co-o~a­tive society, the primary object of which is to provide financial accommodation to its m-emben and inclutles a coopet'$tive laj'1d mortgage bank: (cciii) ltdirector", in relation to a co-operative societ)', includes a member of any committee or body for the time being vested with the management of the affairs of that oclety; 5 (edt» "prhnary agricultural credit society" means a co-operative society,-io (1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (induding the marketing of crops); anti (2) the byalaws of which 40 not permit admlasioa of any other co-operative society as a member: 15 provided that this sub-clauee shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the ,shd1'8 capital of such co-operative society out of funds provided by the state government for tlie purpose; (ccv) "primary co-operative bank" means a co-operative lociety, other than a primary agricultural credit society,-110 (1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which are not less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a member: provirted that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society 'out of funds provided by the state government for the purpose; ~) "primary credit society" means a co-operativa 800iety, other than a primary agriculttu'al credit society,-(1) the primary object or principal business of which is the transaction of banking business; 35 (2) the paid-up share capital and reserves of which are less than one lakh of rupees; and (3) the byelawa of which do not permit admission of any other co-operative society as a member: 40 provideci that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative· bank subscribing to the share capital of such co-operative society aut of funds provided by the state governmenf for the purpose 45 explanation-if any dispute arises as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi), a detenni  nation thereof by the reserve bank shall be final (ccvii) "central comoperative bank", "co--operative 80'" ciety", "primary rural credit society", and "stateco-operauve bank" shall have the meanings respectively assigned to them 3 in the national bank for agriculture and rural development act, 1981;';"; (ii) in clause (p) ,-,(a) for the words, figures and brackets "in section 23, for ub-tlection (1), the following submsection shall be substituted, 10 namely", the following shall be substituted, namely:-"in section 23,-(i) for sub-section (1), the following sub-section shall be suibstitutef\, namely"; (b) after sub-clause (i), the following sub-clause shall be 15 inserted, namely:-- (ti) after sub-section (4), the following sub-eectiod shall be inserted, namely:-"(m) any co-operative bank requiring the permission of the reserve bank under this section shall for-~o ward its application to the reserve bank through the national bank which shall give its comments on the merits of the application and send it to the reserve bank: provided that the co-<>perative bank shall also send 515 an advance copy of the application directly to the reserve bank" ;'; (~i) in clause (q), after sub-clause (ii), the following sub-clause shall be inserteci, namely:-"(iii) to sub-section (3), the following proviso shall be added, go namely:-'provided that every co-operative bank, other than a primary co-operative bank, shall also furnish a copy of the said retum to the national bank'"; (if') after clause (r), the following ~lauses shall be inserted, 95 namely:-,,( ,  ,:' "'j'l ~ '(ri) in the second proviso to section 26, for the expression "regional rural bank", the expression "co-operative bank, other than a primary co-operative bank" shall be substitutecl; (rii) in section 27; for sub-section (3), the following aub- 40 section shall be substituted, namely:-" (3) every co-operative bank, other than a prjmary ()o~operative bank, shall submit a copy of the return which it submits to the reserve bank, under sub-section (1) 45 also to the national bank and the powers exercisabl~ by the reserve bank under sub-section (2) may also be exercised by the national bank in relation to co-operative banks, other than priroaryco-operative banks"'; (v) for clause (t), the following clause shall be substltutea, namely:-- (t) in section 31,-5 (i) for the words "within three months" and clot tbree months"; the words "within six months" and "at six months" shall, respectively, be substituted; (ii) for the second p'roviso, the following proviso ahall be substituted, namely:-10 "pttlvided further that a co-operative bank, other than a primary co-operative bank, shall furnish such returns also to the national bank";'; (vi) in clause (w), existing sub-clause (iii) shall be re-numbered as sub-clause (iv) and before sub-clause (iv) as so re-dumbered, the following sub-clause shall be inserted, namely:-'(iii) in s'ub-section (6), for the expression "regional rural bank" wherever it occurs, the expression "co-operative- bank other than a primary co-operative bank" shall- be substituted'; (vii) after clause (z;), the following clause shall be inserted, namely:-~o '(z;i) in section 54, after the expression "reserve bank", wherever it occurs, the expression "or the national bank" shall be inserted'; (viii) in the third schedule as substituted by clause (zl) , after the expression "reserve bank", wherever it occurs, the expression "the national bank" shall be inserted 25 10 of 1949 14 in the banking regulation act, 1949, for the words "agricultural refinance and development corporation", wherever they occur, the words "national bank" shall be substituted  part iii amtndment to the industrial dispu'l'es act, 1947 (14 o~ 1947) amendmentin section 2, in clause (a), for the words and figures "the agn cultural refinance corporation established under section 3 of the agri 35 cultural refinance corporation act, 1963", the words and figures "the national bank for agriculture and rural development estabiilhed "1" of ] 983 \ ) gmer"section 8 of the national bank for agriculture' and rural develop ment act, 198r' shall be substituted ,  part iv ~t 'lio tilb payment of bonus aar, 1965 (21 of 196r) amen-7mentin section 32, for sub-clause (d) of clause (~), the following sub elause shall be substituted, namely:-"(d) the national bank for agrioulture an'd rural develop- 10 ment" this bill is intended to provide for the establishment of a national level institution for providing credit for the promotion of agriculture small-scale industries, cottage and village industries, handicrafts and other rural- crafts and other allied economic activ~ties in rural arell$ with a view to promoting integrated rural development and securing prosperity of 'rural areas 2 it has its genesis in the recommendations of the 1't'ltional commission on agriculture the commission had suggested that to overcome difftculties being faced by farmers in obtaininll credit and other inputs, an integrated approach should be adopted for the supply of services and imputs, including credit the commission had recommended that an types of credit needs should be met through a single integrated agency leading up to an agricultural development bank: at the apex it was suggested that such a bank could consolidate expertise and· experience of various national level agencies into a single national organisation directing the flow of agricultural credit according to the needs the government had requested the reserve bank of india in march 1979 to arrange for a review of the institutional arrangemei-tts for rural credit with a view to streamlining them in pursuance of the above, the reserve bank had appointed a committee to review arrangements for institutional credit for agriculture ilnn rural development the committee gave an interim report recommendinp,' the setting up of a national bank for agriculture and rural development and also gave a broad outline for it the recommendations of the interim report of the committee were examined by the government and it was decided to set up such a bank 3 the national bank shall be the apex organisation with respect to all matters relating to polley, planning and operational aspects in the field of credit for the promotion of a~icu1ture, small-scale industries, cottage 'and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas, the bank will serve as a refinancing institution fbrextending short term credit for the promotion of activities in the said field similarly, the bank will provide refinance to various banks for their term lending operations for the purposes of agriculture 'and rural development a provision has also been made for direct lending to any institution as may be approved by the central government the proposed bank is to have or~anic links with the rl'5erve bank it is the iutention that the reserve bank's close link with rural cl't:!dit should be retained and its authority as the central bank over nionetary and cl'cdit acl'retion should not be diluted in any manner the entire undertaking of the agricultural refinance and development col:poration shall be transferred to and vest in the new bank an<'l t1w corporation "h1'll1 stand dissolved 1'h(' hill also provides for changes of a supplemental, incidental or consequential nature in the reserve bank: of india act, 1934, the banking regulation act, 1949, the industrial disputes act, 1947 and the payment of bonus act, 1965 4 the notes on c1auses appended to the bill explain the provisions of the bill  r venkataraman new delhi; the 14th september, 1981 clause 2 defines the expressions used in the bill clause 3 provides for the establishment of the national bank for agriculture and rural development and its omces, branches and agen-:ies clause 4 provides for the ownership of the national bank it will be jointly owned by the central government and the reserve bank of india and their subscription to the capital of the national bank shall be in equal proportions the capital of the national bank will be one hundred crores of rupees, which may be increased up to five· hundred crores of rupees by the central government in consultation with the reserve bank clauses 5 and 6 provide for the management of the national bank and for the vesting of the affairs and business of that b::mk in a board of directors the board will have, apart from other directors, three directors who will be common to the boards of the reserw bank and the national bank there will also be representation for experts in rural economics, rural development, handicraft,; and other rural crafts, village and cottage industries and small-scale industries and persons with experience in the working of co-operative banks and commercial banks, and omcials of the central government and state governme'dts clauses 7, 8, 9 and 10 provide for the term of omce and retirement of chairman and other directors and managing director and whole-time directors, their disqualificatit'ltm and vacation and resignation of ofbce clause 11 provides for the filling up of casual vacancy in the ofbce of the managing director clause 12 provides for the meetings of the board and observance of rules of procedure in this regard clause 13 provides for the constitution of an executive committee and such other committee for such purp0'3es as the board may decide clause 14 provides for the constitution of an advisory council consisting of such number of directors and such other persons who, in the opinion of the board, have special knowledge in agriculture, agricultural credit, co-operation and rural economics, small-scale industries, village and cottage industries, and handicrafts and other rural crafts or have special knowledge and appreciation of the country's overall developmental policies and in particular overall monetary and credit policies, which is considered by the board as useful to the national bank, to advise the national bank on such matters as may be referred to the advisory council by the national bank it also provides for the term of office of members of the advisory council and their fees and allowances and meetings of the advisory council and observance of rules in this regard clause 15 provides that a director of th~ board or a member of a committee shall not participate in meetings, in which any matter, wherein he has a direct or indirect pecuniary interest, comes up fqr consideration clau8e 16 provides for the transfer of assets and liabilities of the akricultural refinance and development corporation (hereinafter referred to as ardc) to the national bank as compensation for the transfer of the said undertaking, the share-holders of the ardc will be paid a sum equal to the total paid-up capital of the corporation, in porportion to their contribution to such paid-up capital, as on the date immediately preceding the date appointed under sub-section (1), and they will also be paid dividend, in proportion to the shares held by such share-holders, for the period, if any, that has expired in the accounting year of the corporation before the said appointen date,  at the rate at which the shares of the corporation are guaranteed for a minimum dividend clause 17 provides for the dissolution of ardc and the repeal of the agricul~ural refinance and development corporation act, 1963 clau-'1e 18 provides for the transfer of assets and liabilities, from the reserve bank to the national bank, relating to the national agriculturaicredit (long term operations) fund and the national agricultural credit (stabilisation) fund now maintained in the reserve bank it also provides that the loans and advances which the reserve bank has granted to the state co-operative banks and regional rural banks under section 17 [except sub-clause (a) of clause (4)] of the reserve bank of india act, 1934 and which the reserve bank may specify by a general or special order, shall become and be de~men to be loans and 'advances granted by the national bank under section 21 clause 19 enables the national bank to raise resources by iss~ and selling bonds and debentures, which are to be guaranteed by th , central government and carrying interest' at such rates as the central government, in c00'3ultatio'n with the reserve bank, may fix the national bank may also avail of short-term borrowing from the reserve bank it may also borrow from the central government and other institutions approved by that government and take deposits from government or other authorities and banks it is also enabled to accept gifts, grants, donations or benefactio'ns from government or any other source clause 20 provides for the national bank to borrow in foreign currency with the previous approval of the central government and in consultation with the reserve bank   clause 21 provides the purposes' for which short-term credit may be extended by way of refinance by the national bank, the forms of securities which may be obtained therefor, and the requirements for waiving the security this clause p'rovines for the national bank to extend short-term credit for agricultural operations or marketing of crops or the marketing and distribution of inputs necessary for agriculture' or rural development or any other activity for the promotion of or in the field of agriculture or rural development or bona fide commercial or trade transactions or the production or marketing activities of artisans or of small-scale industries, industries in the tiny and decentralised sec~ tor, village ann cottage industries or of those engaged in the field of handicrafts and other rural crafts clause 22 enables the national bank to provide financial assist&nc@ tor the conversion of short-term loans and advances of state co-operative banks or regional rural banks and approved financial institt,ltions, the repayment of which is rendered difficult owing to drought, famine, oiher natural calamltie3, military operations or enemy actian clause 23 provide$ for the rescheduling of loans and advances made toartis~ns, small-scale industries, industries in the tiny and decentra-used sector, village and cottage industries and those engaged in the field of handicrafts and other rural crafts by state co-operative banks or regional rural banks and approved financial institutions where the repayment of such loans is rendered difficult owing to unforeseen c1rcum- stances clause 24 enables the national bank to provide refinance facilities in respect of medium term loans to the state co-operative banks and the regional rural banks for agriculture, rural development or such other purpose determined by the national bank clause 25 enables the nations] bank t6 make loans and advances, by way of refinance, to state land development banks state co-operative banks and scheduled btrnks and any other financial institutions approved by the reserve bank in this behalf and reschedule the payment of such loans or advances it 'also enables the national bank to make loans and advances to a state co-operative bank or a scheduled bank to make loads or advances to artisans, small-scale industries, industries in the tiny ~nd decentralised sector, village and cottage industries, and tho~ engaged in the field of handicraf1i3 and other rural crafts and reschedule the payment of such loans or advances clause 26 provides that the national bank may cantribute to the share capital of or purchase and sell shares of, or invest in the securities of suchiinancial institutions as may be notified by the central govern-ment in con'3ultation with the reserve bank clause 27 provicles that the national bank may make loans and advances to state governments for subscribing directly or indirectly to the share capital of a co-operative credit society clause 28 provides for the security which the national bank may obtain for extending credit and also prov:des that the board may relax the requirements as to security clause 29 provides that the amounts received by a borrowing institution in repayment of loans and advances refinanced by the nationa~ bank ann all securities which a borrowing institution may hold whue reiending the moneys borrowed t'rom the national bank, shall be held in trust for the national bank clause 30 enables the national bank to make direct loans, repayable within such peiiod not exceeding 25 yeal's, to an institution which is approve!d by the central gowrnment clause 31 pro'vides for the national bank receiving such commission and other consideration as may be agreed upon while it extends longterm credit, direct loans and while issuing guarantees clause 32 provides for the national bank guaranteeing, with the priot- approval of the central gover'llment, deferred payments in connection with the purchase of capital goods, due from an approved cooperative society or institution or due from any other person and guaranteed to the national bank by a state land development bank or a state co-operative bank or a scheduled bank clause 33 provides that while entering into any transaction under chapter vi with a borrowing institution the national bank may impose such conditions as it may think necessary, for protecting its in~rests clause 34 provides for the circumstances in which the national 'bank hlay call for repayment of any loan or advance before the date due for its repayment clause 35 provides that the national bank shall have free access to all the records of a borrowing institution, which may be considered necessary in connection with providing financial or other assistance clause 36 provides that the validity of the loans and advances extended by the national bank shall not be questioned merely on the ground of non-compliance with any requirements of any resolution contract etc, but nothing in this clause shall render valid any loan or advance obtained by any company or co-operative society where the said company or co-operative society is not empowered by its memo randum to obtain loahs or advances clause 37 provides that the national bank shall not grant loans or advances on the recurity of its own bonds and debentures clause 38 provides that the national bank shall co-ordinate the operations of various institutions in the field of rural credit and maintain expert staff to study' problems relating to agriculture and rural develop- ment and be available for consultation to the central government, the reserve bank, state governments and other institutions the national bank may also act as agent for the central government, the reserve bank or a state government in respect of the matters specified in the clause the national bank may also provide facilities for training and research and make grants to other ino;titutions for this purpose clause 39 provides that the national bank may also do all such things as may be necessary or incidental to or consequential upon the exercise of its powers, discharge of its functions and the performance of its duties entrusted to it under this bill or under any other law for the time being in force clause 40 provides that the national bank may invest its funds in promissory notes, stocks and securities of the central government or keep the moneys deposited with the reserve bank or any agency of the reserve bank or, in consultation with the reserve bank, with a state co-operative bank or a scheduled bank clause 41 provides that the national bank may collect from or furnish to the central government, the reserve ba'nk or any banking company or any other institution, credit information or' other information for the efficient discharge of its functions under this bill clause 42 provides for the establishment (in the national bank) of the national rural credit (long term operations) fund the fund sball (in addition to assets and liabilities transferred under section 18) include such sums of money as the central government and the state government ,may contribute from time to time, and such sums as the reserve ~nk and the board of directors of the national bank may contribute every year the national bank is also enabled to provide financial asosista'nce by way of, loans and advances under section 23, section 24, clause (a) or clause (b) or clause (c) ot sub-section (1) of section 25 or section 27 or for the purposes of section 26 out of the amounts in the said ·fund clause 43 provides for the establishment (in the national bank) of the national rural credit (stabilisation) fund the fund shall (in addition to assets and liabilities transferred under section 18) include such sums cif money as the central government and the state governmonts may contribute from time to time and such sums as the reserve bank and the board of directors of the national bagk may contribute every year the amounts in the said fund shall be applied by the national bank only to provide loans and advances under section 22 claus~ 44 provides that the national bank shall establish and maintain a research and development fund to which shall be credited such swil8 of money as are transferable to this fund in accordance with section 47 and as the board may contribute every year tc this fund and such sums out of gifts, grants, donations or benefactions which the ,national bank may receive and which the board may earmark for this purpose this fund will be expended on matters of importance to agriculture, agricultural operations and rural development, including the provision of training and research, etc clause 45 provides for the establishment of a reserve fund and such other funds as the board may consider necessary clause 46 provides for the preparation of the balance-sheet and accounts of the national bank in the form and manner prescribed by regulations made under section 60 clause 47 provides that after making provisions for bad and doubtful debts, depreciation of assets and all other matters for which provilion is necessary or expedient or which is usually provided for by bankers and for the funds referred to in sections 42, 43 and 45, the national bank shall transfer, for a period of 15 years following the accounting year of its establishment, the amount remaining to the fund established under section 44, and thereafter transfer half of the balance of surplus to the' central government and the other half to the reserve bank clause 48 provides for the audit of the accounts of the national bank the auditor will be appointed by the central government in consultation with the reserve bank the central government may also, at any time, appoint the comptroller and auditor general ot! india to examine and report on the ~counts of the national bank clause 49 provides for the national bank furnishing such returns as the reserve bank or the central government may require clause 50 provides for the national bank developing its own cadre cf staff initially, the staff working with the agricultural refinance and development corporation and such other staff of the reserve bank as the national bank may require will be transferred to the national bank and they will form the nucleus of the staff of the national bank it also provides for the terms and conditions of members of the staff of the national bank clau8e 51 provides that the directors, members of committees, auditor, officers and other employees of the national bsnk shall make a declaration of the fidelity and secrecy in the form set out in the first schedule clause 52 makes a usual provision to ensure that defects' in appointments, etc do not invalidate acts of the board or its committees clause 53 is the usu:ll provision relating to protection ot acthm taken in good faith clause 54 seeks to indemnify the director:; of the national bank against all losses and expenses incurred by them in or in relation to disch~rge of their duties other than those caused by their qwn wilful act or default clause 55 provides for the exemption of the national bank from payment of income-tax and all other taxes on income, profits and 'gabil and is on the lines of similar exemption given to the reserve bank of india and to the industrial development bank of india clause 56 provides for penalties 'for making false statements in 8jly returns, balance-sheet or other documents furnished to the nation~ bank of for failure to produce books or other documents required by the national bank clause 57 provides for the responsibility of companies and their directors and the consequences of any failure in this regard glause 58 provides for the application of the bankers books evidence act, 1891, in relation to the national bank cll1use 59 deals with the liquidation of the national bank and pr0-vides that the national bank shall not be placeci in liquidation, save by order of the central government and in such manner a~ it may direct clause 60 seeks to empower the board of directors of the national bimk with tbe previous approval of the central government, to make regulations not inconstitent with the bill for the purpose df giving effect to the provisions of the bill and in particular in respect of matters spectfied in that clause clawe 61 seeks to amend the reserve bank of india act, 1934, the bankirig regulation act, 1949, the industrial disputes act, 1947,and' the payment of bonus act, 1965, in the manner set out in the secoiid schedule clattse 62 provides for removal of difficulties  first schedulethe first schedule gives the form for making the declaratioh of fidelity and secrecy  second scheduleamendment to the reserve bank of india act, 1934 the amendments empower the central government to appoint in consultation with the b3nk, a deputy governor as the chairman of the national bank on such terms and conditions as that government may specify the amendments also provide for the reserve bank making loans and advances to the national bank repayable on demand or on expiry of fixed period not exceeding eigqte~n months the reserve bank is also empowered to appoint, in addition to certain other banks, the nation:al bank as its agent for such purposes ~s the res~rve bank may specify the amendments also provide for the substitution of the provisions relating to the national agricultural credit (long term operations) fund and the national agricultural credit (stabilisation) f\md now maintained by the reserve bank, upon transfer of the said funds to the national rural credit (long term operations) fund and the nat~onal rural credit (stabilisation) fund, which will be established and maintained by the national bank and to which the reserve bank will also make annual contribution the amendments also provide for the reserve bank maintaining an expert staff to study various aspects of rural credit and development a:nd in partic"  llar rendering expert guidance and assistance to the national bank and eonduct special studies in such are~ as it may consider necessary to do so for promoting ;ntegrated rural development the other amendments are mainly consequential to the setting up of the national bank and division of responsibilities of the reserve bank and the national bank  amendments to the banking regulation act, 1949 the amendments to the banking reg'ulation act, 1949, ensure that:-(i) with reference to regional rural banks a'nd co-operative banks (other than primary co-oper~tive banks) the national bank will be the' inspecting authority which will combine in itself the responsibility envisaged both for developmental and statutory inspections this, however, does not preclude reserve ba'nk from conducting test inspections whenever it consid~rs to do so; (ii) as regards branch licensing of regional rural banks and co-operative banks (other than primary co-operative banks) the national bank will receive applications for opening branches and forward the same to the reserve bank with its comments, since having regard to the criterion envisaged for sanctioning branch licences, the national bank will be in a position to assist reserve bank of india in taking decision on them advance co!,ies of such applications will be sent direoctly to the reserve bank); and (iii) the national bank will r:e(!eive su'~h returns and other data concerning regional rural banks and co-operative banks (other than primary co-operative banks) as would facilitate national bank keeping a close watch over the performance health and viability of the institutions  amendments to the industrj al disputes act 1947 and the payment of bonus act; 1965 these are consequentialsub-clause (1) of clause 4 of the bill provides that the capital qf the national bank shall be 100 crores of rupees it has been provided that the central government may, in consultation wah the reserve bank and by notification in the official gazette, increase the said capital up to 500 crores of rupees sub-clause (2) of clau5e 4 of the bill provides that the capital of the bank shall be subscribed to by the central government and the reserve bank in equal proportions 2 the central government will have to incur an expenditure of rs 50 crores for contributing to the share capital of the bank when it is set up in case it is decided to increase the capital of the bank, a contribution to the share capital to the extent provided in the act shall have to be made 3 9lause 19 (a) requires bonds and debentures issued under that clause to be guaranteed by the central government clause 19 (c) and clause 19(d) empower the national bank to borrow money and accept 'deposits from the central government clause 20 (2) envisages a guarantee by the central government for the borrowings of the national bank in foreign currency under that section chuses 42(2) (a) and 43 (2) (a) envisage contribations by the central government to the funds referred to in those clauses it is not possible to visualise at this stage the amounts which the central government may lend to the bank under clause 19 (c) or deposit with the bank under clause 19 (d) or the contribut'ons which the central government may make under clause 42 (2) (a) and clause 43 (2) (a) the guarantee under clause 19 (a) and the guarantee under clause 20 (2) involve liabilities of a contingent nature and the extent of such liabilit1es, if any, will be known only after the bank has started functioning 4 clause 47 (i) of the bill em;sages that for a period of fifteen years following the accounti'ng year during which the national bank is established, the surplus left in each year after making provision for the various matters referrerl to in that section shall be credited to the resc8l'('h and development fund of the bank this provision by itself does not involve expenditure but it may be mentioned that but for this provision one-half of the amount which would become credited to the research and development fund under this section would have accrued to the central government 5 no other provision of the bill involves any other expenditure of a recurring or non-recurring n,ature from out of the consolidated fund of indja  memorandum regarding delegated legislationsub-c!iause (1), 'of clause 60 of the bulconfers on the-biard of the national bank the power to make regulations, by notification in the official gazette, with the previo'lls approval of the central government and in cot\sultation with the reserve bank" sub-clause+ (2) of that c13use specities the matters which such regulations ,may provide for these include, among other things, fees or allowances that may be pa!dto the directors or members of the advisory council, the procedure for conducting meetings' of the board or of the executive cbmntittee or of the advisory council; the conditions which the national bank may 'hnpoae in ~anting loans and advances and the form and manner in which the balance-sheet ami the accounts of the bank shall be pj:epare<! or main tained, s\lb:-dause (4) of clause 60 empowers the board to make regulati9ns in respect of the above mentioned matters with retri>siiective effect from a date not earlier than the date of comii1enceme~t qf the act this power is sllbject to the safeguard that no retrospective effect shall be gt\ren to any ~gulation so ~as to prejudicially affect the iiiterests at any person to whom such regulation may be applicable' - , " clause 62 of the bill empowers the central goverriment to ~move by order any difticu~ty which ~ay arise in ~vin~ effec~ t~ the "provisions of the legislation this is by way of abundant caution and for covenng difficulties which it is not 'practicable to vis~a~e   &; the matters with 'respect to which regulations may be made '\lnd~r -       '  "  clause 60 pertain to matters of procedure or detail ana as the' malcing of regulations with retrospective effect is subject to the safeguarc£ &fore-' mentioae(i and as the matters with respect to which orders may be ma~e  under,culu~ 62 pertain to matters which it is not 'practicable-to'visualise  at this st~ge, the delegation of legislative power is of 11:ormalcharacter,' -, , ", \, ', ' ,  annexure extracts from the reserve bank of india 'act, 19m(2 of 1934) - - - - - deftdlticmt ! in this act, unless there is anything repugnant in the subject or eontext,-' (4) "agricultural operations" includes animal liusbandry dairy and poultry farming, pisciculture and other allied activities, whether or not undertaken jointly with agricultural operations; 10 of 1963 (al) "agricultural refinance and development corporation" means the agricultural refinance corporation established under section 3 of the agricultural refinance and development corporation act, 1963; - - - - -  (bi) "central co-operative bank" means the principal co-operative society in a district in a state, the primary object o'f which is the financing of other co-operative societies in that district: provilted that in addition to such principal society in a district or where there is no such principal society in a district, the state government may declare any one or more co-operative societies carrying on the business of financing other co-operative societies in that district to be a central co-operative bank or banks within the meaning of this definition; (bii) "co-operative bank" means a state co-operative bank, a ecntrl'll co-operative bank and a primary co-operative bank; (biii) "co-operative credit society" means a co-operative society, the primary object of which is to provide financial accommodation to its members and includes a co-operative land mortgage bank; 2 of 1912, (hiv) "co-operative society" means a society registered, or deemed to be registered, under the co-operative societies act, 1912 or any other law relating to co-operative societies for the time being in force in any state; i (bv) "crops" indudes products of agricultural operations; - - - - - (bviii) "director", in relation to a co-operative society, includes a member of any committee or body for the time being vested with the management of tlle affairs of that society; - - - - - (ei) "marketing of crops" includes the processing of crops prior to marketing by agricultural producers or any organization of such producers; i "(cia) "pisciculture'! includes the development of fisheries, both inland and marine, catching of fish and all other activities connected therewith or incidental thereto; (cii) "primary agricultural credit society" means a co-operative society,-(1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and (2) the bye-laws of which do not permit admission of any other co-operative ~iety as a member: provided that this sub-clause shall not apply to the admission of a co-operative bank as: a member by reason of such c()oo()perative bank subscribing to the share capital of such co-operative society out of funds provided by the state government for the purpose; (ciii) "primary co-operative bank'! means a co-operative society, other than a primary agricultural credit society,-(1) the primary object or principal business of which is the transaction of banking business; ,  (2) the paid-'!1p share capital and reserves of which are not less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a member: provided that this sub-clause shall not apply to the- admisslon of a co-operative bank as a member by reason of such co-operauve bank subscribing to the share capital of such co-operative society out of funds provided by the state government for the purpose; (civ) "primary credit society" means a co-operative society, other than a primary agricultural credit society,-(1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which are less than one lakh of rupees; and (3) the bye-laws of which do not permit acbnission of any other co-operative society as a member: provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank: subscribing to t:le share capital of such co-operative society out of funds providetl by the state government for the purpose explanation-if any dispute arises as to the primary object or principal business of any co-operative society referred to in this clause or clause (cii) or clause (ciii) i a determination thereof by the bank shall be final; i (cv) "regional rural barile" means a regional rural bank established under section 3 of the regional rural banks act, 1976; - - - - cf) ejstate co-operative bank", means the prmcipal c~tift -lociety'in a state, the primary object of which is the financing of other co-operative societies in the state: provided that in addition to such principal society in a state or where there is no such principal society in a state the state 'government may declare any one or more co-operative societies carrying on business in that state to be a state co-operative bank or banks within the meaning of this definition;$\bullet$ $\bullet$ $\bullet$ $\bullet$ $\bullet$ $\bullet$ $\bullet$(2) the g!>vernor md deputy governors shall devote their whole time to the affairs of the bank, and shall receive such salaries and- allow· ances as may be detenmned by the central board, with the approval of the central government: comlm1-tion of the central board, and term of offtceof directors provided that the central boarq may, if in its opinion it is necessary in the public interest so 16 do, permit the governor or a deputy gover· nor to undertake, at the request of the central government or any state government, such part-time honorary work, whether related to the purposes of this act or not, as is not likely to interfere with his duties as governor or deputy governor, as the case may be busine  which the bankma1 transacl  17 the bank shall be iuithorised to carry on and transact the everal kinds of business hereinafter specified, namely:-- - - - - (4aa) the making of loans and advances out of the national agricwal credit (long term operations) fund and the national agricultural credit (stabilliation) fund established under section 46a and hction 46b respectively for the purposes spec~ed in the sai~ sectionsj -  - - - ~:  (4e) the making to the agricultural refinance and development ~  at loans and advances repayable on the expiry of fixed periods not exceeding eighteen months from the date of the makin, of the ~08d or advance, against the security of stocks, funds and securi-• ; (o~ thai1 'immovable property) in which a trustee is authorised' to inwit trust money by any law for the time being in force in india; - - - - - ' (3a) the purchase and sale of shares in, or the clpftal di  the agri_ cultural refinance and development· corporation, the depomt iftsurance c?rpo~ation, t~e development bank, the state bank or any othter bank or ~nfu1cial institution notified by the central government in tbi beh8lf: i '  ::'  " : ( , ~  - - - - ~~  ~ (1) - • -  - v'i'~~~ -  {3) the ~emainder o~ the assets shall be held in rupee coin, government· of india rupee securities of any maturity and such bills of exchanae depart· ment and promissory notes payable m india as are eligible for purchase by the bank under sub-clause(a) or sub-clause (b) or sub-clause (bb) of clause (2) of section 17 or under clause (1) of section 18  - - - - - 42 (1) every bank included in the second schedule shall maintain with the bank an average daily balance the amount of which shall not be less than tbree per cent of the total of the demand and tiae liabilities in india of such bank as shown in the return referred to in subsection (2): c8hre lerves  of ich~ duled banks  be kept with the bank provided that the bank may, by notification in the gazetteallddia, increase the said rate to s'ueh higher rate 'as may be specified in tile notifieatiod 10 however that the rate shall not be more than fifteen, per cent of the total of the demand and time liabilities , explanation-for the purposes of this section,-- - - - - (c) "liabilities'" shall not include- - - - - (ii) the amount of any loan taken from the ~ or !j:om the development bank or from the agricultural refinance and development corporation; ,  -- - - - obli,ation to appoint state bank a'  -45 (1) unless otherwise directed by the central government with reference to any place, the bank shall appoint the state bank as itslole agent at au places in india where it does not have an office or branch: of the -banking department and there is ·a branch of the state bank 01: a braneh of a subsidiary bark ~ of 19119 (2) notwithstandinc anyth!n& contained in su~section (1) or in any asreement between the bank and the state sank, the bank may, until an arraugement under section 36 of the state bank of india (subsidiary banks) act, 1959, is made by the state bank with the state bank ot hyderabad or the state bank of my!jore, e1jlploy or continue to employ as its agent, the state' bank of hyderabad or, as the case may be, the bank of mysore, limited or the state bank of mysore, at such places where, and for such purposes for whioh, the hyderabad bank and the bank of mysore, limited were' respectively acting as agents afthe bank immediately before the commencement of that act and, with the previous approval of the central government, at any otber plaee and for any purpose explanction-the expression "subsidiary bank" in this ~od ahall have the same meaning as in section 2 ot the state bank of india (subsidiary banks) act, 1959 -  chal1'er iv general provisions46a (1) the bank shall establish and maintain a fund to be known as the national a&ricultural credit (long term operations) fund to which shall be credited-(a) an initial sum of ten crores of rupees by the bank; and national agrictlltural credit (long term operations) fund (b) such further sums of money as the bank may contribute every year: provided that the annual contribution during each of the five years commencing with the year ending on the 30th day of june, 1956 shall not be less than five crotes of rupees: provided further that the central government may, if the circumstances so require, authorize the bank to increase or reduce the amount of its annual contribution in any year ,(2) the amount in the said fund shall be applied by the bank only to the following objects, namely:-(a) the making of loans and advances to state governments for subscribing directly or indirectly to the share capital of a cooperative credit ~ociety and repayable on the expiry of fixed periods not exceeding twenty years from the date of making such loan or advance; j (b) the making to state co-operative banks ot regional rural banks of loans and advances, repayable on the expiry of fi~ed periods not being less than fifteen months and not exceeding five years from the date of making such loan or advance, against such securities as may be specified in this behalf by the bank and such loans and advances maybe made for agricultural and allied purposes including purposes of animal husbandry or piscic'ulture or such other purposes connected with agricultural operations as the bank may, from time to time, determine: provided that such loans and advances are fully guaranteed al to the repayment of principal and payment of interest,-(i) in the case of loans and advances to state co-operative banks, by the state government; and (ii) in the case of loans and advances to a regional rural bank, by the sponqar bank: provided further that such guarantee may be waived by the bank if other security to the satisfaction of the bank is available, 'or if, for reasons to be recorded by it in writing, the bank is satisfied that a guarantee or other security is not necessary; (c) the making to central land mortgage banks of loans and advances repayable on the expiry cif fixed periods not exceeding twenty years from the date of making such loan or advance: provided that such loans and adyances are fully guaranteed as to the repayment of the principal and payment of interest by the state government: provided further that s'ueh guarantee may be wafv4!d by the bank if otner security to the satisfaction of the bank is available, or if, for reasons to be recorded by it in writing, the bank fs satl  fied that a guarante~ or other security is not necessary;   (d) the purchase i)f debentures of central land mortgage banks: provided that gu~h debentures are fully guaranteed as to the repayment of the pri!'cipal and payment of interest by the state governmeftt; (e) the making to the agricultural refinance and development corporation of loans and advances repayable on the expiry of fixed periods not exceeding twenty years from the date of making such loan or advance explanation-for th~ purposes of this section, a central land mortgage bank includes an institution engaged in the grant of 10a'1s on the mot'tgllge of agricultural bud and declared as such by the state government in this behalf  46b (1) the bank shall establish and maintain a fund to be known as the natio~al agricultural credit (stabilisation) fund to which shall be credited such sums of money as the bank may contribute every year: national airicultural credit (stabilisation) fund provided that the annual contribution during each of the five years commencing with the year enning on the 30th day of june, 1956 shall not be less than one crore 01 rupees: provided further that the' central government may, if the circumstances so require, authoriz2 the bank t" increase or red'uce the amount of its annual contributio'l in any year (2) the amount in the said fund shall be applied by the bank only to the m4king to state co-operative banks ot' regional rural banks of loans and advances repayable on the expiry of fixed periods not being less than fifteen months and not exteedil1g five years from the date of making such loan or adva'1ce and on such t('t'ms and conditions as may be! specified in this behalf by the bank: ' provided that no such loans or advances shall be made-(a) except for the purpose of enabling the state co-operative banks to pay any due's in respect of bills of exchange and promissory notes purchased or re-discounted by the bank under clause (2) o'f sectitm 17 or 103ns and advances made to them by the bank 'under clause (4) of section 17, and unless, in the opinion of the bank, the state co-operative banks are unable to pay such dues in time owing to drought, famine or other natural calamities; and (b) unless such loans and advances are fully guaranteed as to the repayment of the principal and payment of interest by the state government: i provided further that no such loans or advances shall be made-(a) except for the purpose of enabling the regional rural banks to pay any dues in re~pect of bills of exchange and promissory notes purchased or re-discounted by the bank or loans and advances made to them by the bamk und aeeticm 17 8i1d imliji, in the opinion of the 'bank, the regional rural bankj ar~ uil;ablt tq pay iuch dues in time owing to drought, famine or other natunl c~alamities, and i (b) unless such ,loans ahd, advances are rully glotaranteed as' to repayment of the principal and payment of interest by the sponsor bank' 1 - - - - - m the bank shall create a special agricultural credit· department the functions at which shall be-a,rkultural credit department (a) to maintain an expert sfaff to study all questions of agricultural credit and be available for consultation by the central government, state governments, state c~perative banks ' and other banking organisations,' (b) to co-ordinate the operations of 'the ~ank m connectton with agricultural credit and its relations with' state ~perattve banks and any other banks or organisations engaged in the business of agricultural credit - - - - - '! ' 'l  extracts from the banking regulation act, 1949'(10 of 1949) - - - - - interpre tation 5 in this act, unless there is anything repugnant in the subject or context,-- - - - - %4 (1) - - - - - maim  nance ota percent· ale at uaet • (3) for the purpose of ensuring compliance with the provisions of this section, every banking company shall, not later than fifteea days after the end of the month to which it relates, furnish to the reserve bank in the prescribed torm and manner a monthly return showing particulars of its assets maintained in accordance with this section, and its time and deman'd liabilities in india at the close of business on each friday during the month, or if any friday is a public holiday under the negotiable instruments act, 1881, at the close of business on the 18 of 1 preceding working day  auetl ill india 25 (1) - - - - (2) every banking company shall, within one month from the end of every quarter, submit to the reserve bank a return in the prescribed form and manner of <the as~ets and liabilities referred· to in suh-section (1) as at the close of business on the last friday of the previous quarter, or, if that fdday is a public holiday under the negotiable instruments act, 1881, at the close of business on the preceding working day - - - - return df unclaimed depe-bits ~wer to publis)lo information oj 26 every banking company shall, within thirty days after the close of each calendar year, submit a return in the prescribed form and manner to the reserve bank as at the end of such calendar year of all accounts in india which have not been operated upon for ten years: provided that in the cas€ of money deposited for a fixed period tbe said term of ten years shal1 be reckoned from the date of the expiry of su{'h flxed period - - - - - 28 the reserve dank if it considers it in the public interest so to do, may publish any information obtained by it under this act in such consolidated form as it thinks fit - - 0 - - - 31 the accounts anti balance-sheet referred to in section 29 together submiswith the auditor's report shall be published in the prescribed manr  er sion of and three copies thereof shall be furnished ,as returns to the reserve return's bank within three months from the end ·of the period to which they refer: provided that the reserve bank may fn any case extend the said period of three months for the furnishing of such returns by a fouriher period not exceeding three months - - - - - • 3ola (1) - - - - - production ot documents of confidential nature 5 of 1970 \21 of 1976 40o't 1980 (3) for the purposes of this section, "banking company" includes the industrial development bank of india, the reserve bank, the state bank of india 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 banks act, 1976, a corresponding new bank constituted under section 3 of the banking companies (acquisition and trallsfer of undertakings) act, 1980, and any subsidiary bank - - - - -  part ub prohismon of certain activities in relation to banking companies36ad (1) - - - - - 5 of 1970 21 of 1976 punishments for certain activities in relation to banking t' rompa" ( ir nies 40 of 1980 (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 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 banks act, 1976, a corresponding new bank constituted 'lin~ section 3 of the banking companies (acquisition and transfer of undertakings) act, 1980, and any subsidiary bank - -  - cognizance ot oftences 47 no court shall take cognizance of any offence punishable under sub-section (5) of section 36aa or section 46 except upon complaint in writing made by an officer of the reserve bank generally or specially authorized -in writing in this behalf by the reserve bank, and no court inferior to that of a presidency magistrate or a magistrate of the first class shall try any such offence - - - - -  part v application of thl!: ac:r to co-opiita'l'ivb baji'd56 the provisions of this act, as in force for the time being, shall apply to, or in relation to, co-operative societies as they apply to, or in relation to, banking companies subject to the following modiftcations, namely:-- - - -  (e) in section 5,-act to apply to co-opera tive socie ties sub ject to modifi· cationa (i) after clause (ee), the following clause shall be inserted, namely:-2 of 1934 '(ccc) "central co-operative bank", "eo-operative bank", &ceo-operative society", "director", "primary agricultural credit society", "primary co-ioperative bank", "primary credit society" and "state co-operative bank" shall have the meanings respectively assigned to them in the reserve bank of india act, 1934'; - - - - - (p) in section 23, for sub-section (1), the following sub-section shall be substituted, namely:-- - - - - - (t) in section 31, for the words "within three months" and "of three months", the words "within six months" and "of six months" shall respectively be substituted; - - - - (w) in section 35,-- - - - - (iii) the explanation shall be omitted; - - - -  extract from the industrial disputes act, 1947(14 of 1947) - - - - - z in this act, unless there is anything repugnant in the subject ol" context,-de1ini tioos (4) "appropriate government" mean&--(i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the central gove,rnment, or by a railway company or concerning any such controlled industry as may be ~ in this behalf by the central government or in relation' to an indwtrial dispute concerning the industrial fina~e corporation of india established under section 3 of the industrial finance corporation act, 15 of 1948 34 of 1948 ,~ 27 of 1953 31 of 1956 10 of 1963 47 of 1961 52 of 1963 37 ot 1964 42 of 1975 21 of 1976 1~, or the employees' state insurance corporation establilhed under section 3 of the employees' state insurance act, 1mb, or the "indian airlines" and "air-india" corporatioils establ1lhed under section 3 of the air corporations act, 1953, or t1ie life insurance corporation of india established under section s ot the life insurance corporation act, 1956, or the agricultural refinance corporation established under section 3 of the agricultural reftnan~ corporation act, 1963, or the deposit insurance corporation established under section 3 of the deposit insurance corporation act, 1961, or the unit trust of india established under section 3 of the unit trust of india act, 1963, or the food corporation of india established under section 3, or a board of management established for two or more contiguous states under section 16, of the food corporations act, 1964, or the banking, service commission established under section 3 of the banking service commission act, 1975, or a regional rural bank established under section 3 of the regional rural banks act, 1976, or a banking or an insurance company, a mine, an oil-field, a cantonment board, or a major port, the central government, and (ii) in relation to any other industrial dispute, the state government; · - - - - -  32 exmaict ",om $£ payment 01' bonus act, 1965 (21 or 1965) - • - • - • - • •(ix) employees employed by-- - - - - act not to apply to certain clanes of employee • (d) the agricultural refinance corporation - - - - -  a billto establish a bank to be known as the national bank 'for agriculture and rural development for providing credit for the promotion of agriculture, small-scale industries, cottage" and village industriee, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to prolnoting integrated rural development and securjng prosperity of rural areas, and for matters connected therewith or incidental thereto  