5
AS INTRODUCED IN LOK SABHA
Bill No. 110 of 2024
THE BANKING LAWS (AMENDMENT) BILL, 2024
A
BILL
further to amend the Reserve Bank of India Act, 1934, the Banking Regulation
Act, 1949, the State Bank of India Act, 1955, the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 and the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980.
BE it enacted by Parliament in the Seventy-fifth Year of the Republic of India
as follows:––
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Banking Laws (Amendment) Act, 2024.
(2) It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint:
Short title and
commencement.
2
Amendment of
section 42.
Amendment of
section 5.
Amendment of
section 10A.
Amendment of
section 16.
Amendment of
section 18.
Provided that different dates may be appointed for different provisions of this
Act, and any reference in any such provision to the commencement of this Act, shall
be construed as a reference to the coming into force of that provision.
CHAPTER II
AMENDMENT TO THE RESERVE BANK OF INDIA ACT, 1934
2. In the Reserve Bank of India Act, 1934, in section 42,—
(a) in sub-section (1), in the Explanation, for clause (b), the following
clause shall be substituted, namely:—
‘(b) “fortnight” means the period from the first day to the fifteenth
day of each calendar month or sixteenth day to the last day of each
calendar month, both days inclusive;’;
(b) in sub-section (2),—
(i) in the long line,—
(A) for the words “each alternate Friday”, the words “the last
day of each fortnight” shall be substituted;
(B) for the words “seven days”, the words “five days” shall
be substituted;
(ii) in the second proviso,—
(A) for the words “such alternate Friday”, the words “the last
day of any such fortnight” shall be substituted;
(B) for the words “that Friday”, the words “the last day of
that fortnight” shall be substituted;
(iii) the third proviso shall be omitted;
(c) sub-section (2A) shall be omitted.
CHAPTER III
AMENDMENTS TO THE BANKING REGULATION ACT, 1949
3. In the Banking Regulation Act, 1949 (hereafter in this Chapter referred to
as the Banking Regulation Act of 1949), in section 5, in clause (ne), in
sub-clause (i), for the words “five lakhs of rupees”, the words “two crore rupees or
such other amount as may be notified in the Official Gazette by the Central
Government” shall be substituted.
4. In the Banking Regulation Act of 1949, in section 10A, in sub-section (2A),
in clause (i), after the words “eight years”, the words “and ten years in case of
a co-operative bank” shall be inserted.
5. In the Banking Regulation Act of 1949, in section 16, in sub-section (3),
after the words “Reserve Bank”, the following shall be inserted, namely:—
“or the director of a central co-operative bank elected to the Board of the
state co-operative bank in which he is a member”.
6. In the Banking Regulation Act of 1949, in section 18,—
(a) in sub-section (1),—
(i) for the words “last Friday”, the words “last day” shall be substituted;
(ii) for the words “alternate Fridays”, the words “the last day of the
fortnight” shall be substituted;
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2 of 1934.
10 of 1949.
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(iii) for the words “such Fridays or if any such Friday”, the words
“the last day of the fortnight or if the last day of any such fortnight” shall
be substituted;
(b) in the Explanation, for clause (b), the following clause shall be
substituted, namely:—
‘(b) “fortnight” shall mean the period from the first day to the
fifteenth day of each calendar month or sixteenth day to the last day of
each calendar month, both days inclusive;’.
7. In the Banking Regulation Act of 1949, in section 24,—
(a) in sub-section (2A), for the word “Friday”, the word “day” shall be
substituted;
(b) in sub-section (3), for the words “each alternate Friday during the
month, or if any such Friday”, the words “the last day of each fortnight during
the month, or if the last day of any such fortnight” shall be substituted;
(c) in sub-section (4),—
(i) in clause (a), for the words “any alternate Friday or, if such
Friday”, the words “the last day of any fortnight or, if the last day of any
such fortnight” shall be substituted;
(ii) for clause (b), the following clause shall be substituted, namely:—
“(b) if the default occurs again on the last day of the next
succeeding fortnight, or, if the last day of such fortnight is a public
holiday, on the preceding working day, and continues on the last
day of the succeeding fortnights or preceding working days, as the
case may be, the rate of penal interest shall be increased to a rate
of five per cent. per annum above the bank rate on each such
shortfall in respect of last day of that fortnight and last day of each
succeeding fortnight or preceding working day, if last day of such
fortnight is a public holiday, on which the default continues.”;
(d) in sub-section (7),—
(i) for the words “next succeeding alternate Friday, or if such
Friday is a public holiday”, the words “last day of the next succeeding
fortnight, or if the last day of such fortnight is a public holiday” shall be
substituted;
(ii) for the words “subsequent alternate Friday”, the words “last
day of every subsequent fortnight” shall be substituted.
8. In the Banking Regulation Act of 1949, in section 25,—
(a) in sub-section (1), for the words “last Friday of every quarter or, if
that Friday”, the words “last day of every quarter or, if that day” shall be
substituted;
(b) in sub-section (2), for the words “last Friday of the previous quarter,
or, if that Friday”, the words “last day of the previous quarter, or, if that day”
shall be substituted.
9. In the Banking Regulation Act of 1949, in section 27, in sub-section (1), for
the words “last Friday of every month or if that Friday”, the words “last day of every
month, or, if that day” shall be substituted.
10. In the Banking Regulation Act of 1949, in section 45ZA,—
(a) in sub-section (1), for the words “one person”, the words “one or
more persons not exceeding four, either successively or simultaneously” shall
be substituted;
Amendment of
section 24.
Amendment of
section 25.
Amendment of
section 27.
Amendment of
section 45ZA.
4
Amendment of
section 45ZC.
Amendment of
section 45ZE.
Insertion of
new section
45ZG.
Priority of
successive
nominations.
(b) after sub-section (1), the following sub-sections shall be inserted,
namely:—
“(1A) Where the nomination is made successively in favour of
more than one person under sub-section (1), the nomination shall be
effective only in favour of one person in the order of priority specified
in section 45ZG.
(1B) Where the nomination is made simultaneously in favour of
more than one person under sub-section (1), the nomination shall be
effective in favour of all such persons in proportion to which it is
declared, and the following terms and conditions shall apply, namely:—
(a) the nomination shall not be made in favour of more than
four persons;
(b) the nomination shall explicitly state the proportion of
amount of deposit in percentage in favour of each nominee;
(c) the nomination shall be made in respect of the whole
amount of deposit;
(d) if any nominee dies before receiving deposit from the
banking company, the nomination in respect of such nominee
alone shall become ineffective and the amount of deposit
purported to be nominated in favour of deceased nominee shall be
treated as if nomination had not been made in respect of that
portion of deposit,
and any nomination which does not comply with any of the terms and
conditions specified in clauses (a) to (c), shall be invalid, as if nomination had
not been made by the depositor or all the depositors together, as the case may
be.”.
11. In the Banking Regulation Act of 1949, in section 45ZC, in sub-section (1),
for the words “one person”, the words “one or more persons not exceeding four,
successively,” shall be substituted.
12. In the Banking Regulation Act of 1949, in section 45ZE, for sub-section (1),
the following sub-section shall be substituted, namely:—
“(1) Where one or more individuals hire a locker from a banking
company, whether such locker is located in the safe deposit vault of such
banking company or elsewhere, the individual or, as the case may be, all the
individuals together, may nominate one or more persons not exceeding four,
successively, to whom, in the event of the death of the sole hirer or the death
of all the hirers, the banking company may give access to the locker and liberty
to remove the contents of the locker.”.
13. In the Banking Regulation Act of 1949, after section 45ZF, the following
section shall be inserted, namely:––
“45ZG. (1) Where the nomination is made in favour of more than one
person successively under sub-section (1) of section 45ZA or sub-section (1)
of section 45ZC or sub-section (1) of section 45ZE, the nomination shall be
effective only in favour of one person in the following order of priority,
namely:––
(a) nomination of the first nominee shall be effective if that
nominee survives the person or persons who made the nomination;
(b) nomination of the second nominee shall become effective only
after the death of the first nominee;
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23 of 1955.
18 of 2013.
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(c) nomination of any nominee lower in the order of nomination
shall become effective only after the death of all the nominees whose
names are higher in the order of nomination.
(2) Where the order of nomination is not mentioned, persons shall be
deemed to have been nominated in the order in which their names appear in
the nomination.
(3) The provisions of this section shall not apply to the nominations
made simultaneously in favour of more than one person under sub-section (1)
of section 45ZA.”.
14. In the Banking Regulation Act of 1949, in section 56,—
(a) in clause (c), for sub-clause (ii), the following sub-clause shall be
substituted, namely:—
“(ii) clause (nb) shall be omitted;”;
(b) in clause (j) relating to substitution of section 18, in sub-section (1),—
(i) for the words “last Friday”, the words “last day” shall be
substituted;
(ii) for the words “alternate Friday”, the words “the last day of the
fortnight” shall be substituted;
(iii) for the words “such Fridays or if any such Friday”, the words
“the last day of the fortnight or if the last day of any such fortnight” shall
be substituted;
(iv) in the Explanation, for clause (b), the following clause shall be
substituted, namely:—
‘(b) “fortnight” shall mean the period from the first day to
the fifteenth day of each calendar month or sixteenth day to the last
day of each calendar month, both days inclusive;’.
CHAPTER IV
AMENDMENTS TO THE STATE BANK OF INDIA ACT, 1955
15. In the State Bank of India Act, 1955, in section 38A,—
(a) in the marginal heading, for the word “dividend”, the word “money”
shall be substituted;
(b) for sub-section (3), the following sub-sections shall be substituted,
namely:—
“(3) The State Bank shall transfer, in accordance with the rules
made under section 124 of the Companies Act, 2013, to the Investor
Education and Protection Fund established under section 125 of the
said Act,—
(i) any money which remains unpaid or unclaimed for a
period of seven years from the date of its transfer in the Unpaid
Dividend Account of the State Bank;
(ii) all shares in respect of which dividend has not been paid
or claimed for a period of seven consecutive years, along with a
statement thereof containing the details specified in the said rules;
(iii) any interest or redemption amount upon any bond issued
by the State Bank which remain unpaid or unclaimed for a period
of seven years from the date such interest or such redemption
amount became due for payment.
Amendment of
section 56.
Amendment of
section 38A.
6
Amendment of
section 41.
Amendment of
section 10.
Amendment of
section 10B.
(4) Any person whose shares or unclaimed or unpaid money has
been transferred to the Investor Education and Protection Fund under
sub-section (3), shall be entitled to claim the transfer or refund from the
said Fund, in accordance with the rules made under section 124 and
section 125 of the Companies Act, 2013.
(5) The money transferred under sub-section (3) to the Investor
Education and Protection Fund shall be utilised for the purposes and in
the manner specified in section 125 of the Companies Act, 2013.”.
16. In the State Bank of India Act, 1955, in section 41,—
(a) in sub-section (1), for the words and figures “section 226 of the
Companies Act, 1956”, the words and figures “section 141 of the Companies
Act, 2013” shall be substituted;
(b) for sub-section (2), the following sub-section shall be substituted,
namely:—
“(2) The auditors shall receive such remuneration as the State Bank
may fix.”.
CHAPTER V
AMENDMENTS TO THE BANKING COMPANIES
(ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970
17. In the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970 (hereafter in this Chapter referred to as the Act of 1970), in section 10, in
sub-section (2),—
(a) for the words and figures “section 226 of the Companies Act, 1956”,
the words and figures “section 141 of the Companies Act, 2013” shall be
substituted;
(b) for the words “Reserve Bank may fix in consultation with the Central
Government”, the words “corresponding new bank may fix” shall be
substituted.
18. In the Act of 1970, in section 10B,—
(a) in the marginal heading, for the words “dividend to Unpaid Dividend
Account”, the word “money” shall be substituted;
(b) for sub-section (3), the following sub-sections shall be substituted,
namely:—
“(3) The corresponding new bank shall transfer, in accordance
with the rules made under section 124 of the Companies Act, 2013, to
the Investor Education and Protection Fund established under section 125
of the said Act,—
(i) any money which remains unpaid or unclaimed for a
period of seven years from the date of its transfer in the Unpaid
Dividend Account of the corresponding new bank;
(ii) all shares in respect of which dividend has not been paid
or claimed for a period of seven consecutive years, along with a
statement thereof containing the details specified in the said rules;
(iii) any interest or redemption amount upon any bond issued
by the corresponding new bank which remain unpaid or unclaimed
for a period of seven years from the date such interest or such
redemption amount became due for payment.
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18 of 2013.
18 of 2013.
23 of 1955.
1 of 1956.
18 of 2013.
5 of 1970.
1 of 1956.
18 of 2013.
18 of 2013.
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18 of 2013.
1 of 1956.
18 of 2013.
40 of 1980.
1 of 1956.
18 of 2013.
18 of 2013.
18 of 2013.
1 of 1956.
18 of 2013.
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(3A) Any person whose shares or unclaimed or unpaid money has
been transferred to the Investor Education and Protection Fund under
sub-section (3), shall be entitled to claim the transfer or refund from the
said Fund, in accordance with the rules made under section 124 and
section 125 of the Companies Act, 2013.”;
(c) in sub-section (4), for the words, figures and letter “section 205C of
the Companies Act, 1956”, the words and figures “section 125 of the
Companies Act, 2013” shall be substituted.
CHAPTER VI
AMENDMENTS TO THE BANKING COMPANIES
(ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1980
19. In the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1980 (hereafter in this Chapter referred to as the Act of 1980), in section 10, in
sub-section (2),––
(a) for the words and figures “section 226 of the Companies Act, 1956”,
the words and figures “section 141 of the Companies Act, 2013” shall be
substituted;
(b) for the words “Reserve Bank may fix in consultation with the Central
Government”, the words “corresponding new bank may fix” shall be
substituted.
20. In the Act of 1980, in section 10B,—
(a) in the marginal heading, for the words “dividend to Unpaid Dividend
Account”, the word “money” shall be substituted;
(b) for sub-section (3), the following sub-sections shall be substituted,
namely:—
“(3) The corresponding new bank shall transfer, in accordance
with the rules made under section 124 of the Companies Act, 2013, to
the Investor Education and Protection Fund established under
section 125 of the said Act,—
(i) any money which remains unpaid or unclaimed for a
period of seven years from the date of its transfer in the Unpaid
Dividend Account of the corresponding new bank;
(ii) all shares in respect of which dividend has not been paid
or claimed for a period of seven consecutive years, along with a
statement thereof containing the details specified in the said rules;
(iii) any interest or redemption amount upon any bond issued
by the corresponding new bank which remain unpaid or unclaimed
for a period of seven years from the date such interest or such
redemption amount became due for payment.
(3A) Any person whose shares or unclaimed or unpaid money has
been transferred to the Investor Education and Protection Fund under
sub-section (3), shall be entitled to claim the transfer or refund from the
said Fund, in accordance with the rules made under section 124 and
section 125 of the Companies Act, 2013.”;
(c) in sub-section (4), for the words, figures and letter “section 205C of
the Companies Act, 1956”, the words and figures “section 125 of the Companies
Act, 2013” shall be substituted.
Amendment of
section 10.
Amendment of
section 10B.
8
STATEMENT OF OBJECTS AND REASONS
As the banking sector has evolved over the years and with a view to improve
bank governance and investor’s protection, it has become necessary to make certain
amendments in the Reserve Bank of India Act, 1934, the Banking Regulation
Act, 1949 (the “BR Act”), the State Bank of India Act, 1955, the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking
Companies (Acquisition and Transfer of Undertakings) Act,1980.
2. The proposed Bill seeks, inter alia, to improve governance standards,
provide consistency in reporting by banks to the Reserve Bank of India, ensure
better protection for depositors and investors, improve audit quality in public sector
banks, bring customer convenience in respect of nominations and to provide for
increase in the tenure of the directors in co-operative banks.
3. Therefore, it is felt necessary to amend the said enactments and for that
purpose to introduce the Banking Laws (Amendment) Bill, 2024 in Parliament. The
salient features of the amendments proposed in the said Bill, inter alia, are—
(a) to amend clause (ne) of section 5 of the BR Act so as to redefine
“substantial interest”, increasing the threshold for shareholding of a beneficial
interest by an individual, etc., from five lakhs rupees to two crore rupees, to
reflect the present value, as the same was last fixed in 1968;
(b) to amend clause (i) of sub-section (2A) of section 10A of the BR Act,
increasing the tenure of directors (excluding the chairman and whole-time
director) in co-operative banks from eight years to ten years, so as to align
with the Constitution (Ninety-Seventh Amendment) Act, 2011;
(c) to amend sub-section (3) of section 16 of the BR Act, so as to allow
a director of a central co-operative bank to serve on the board of a state
co-operative bank;
(d) to amend sections 18, 24, 25 and section 56 of the BR Act, to revise
the reporting dates for the submission of statutory reports by banks to the
Reserve Bank of India, so as to align them to the last day of the fortnight or
month or quarter, to ensure consistency in reporting;
(e) to amend sections 45ZA, 45ZC, and 45ZE of the BR Act, so as to allow
for the nomination of up to four persons, including provisions for simultaneous
and successive nominations, to ease services for depositors and their nominees,
particularly regarding deposits, articles in safe custody, and safety lockers;
(f) to amend section 38A of the State Bank of India Act, 1955, section 10B
of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
and section 10B of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980, so as to provide for the transfer of unclaimed dividends,
shares, and interest or redemption of bonds to the Investor Education and Protection
Fund, and allow individuals to claim transfers or refunds from that fund;
(g) to amend section 41 of the State Bank of India Act, 1955, section 10
of the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970 and section 10 of the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1980, so as to provide discretion to public sector banks
in the matter of remuneration of auditors.
4. The Bill seeks to achieve the above objectives.
NEW DELHI; NIRMALA SITHARAMAN.
The 6th August, 2024.
8
9
26 of 1881.
ANNEXURE
EXTRACT FROM THE RESERVE BANK OF INDIA ACT,1934
(2 OF 1934)
* * * * *
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 such
percent. of the total of the demand and time liabilities in India of such bank as
shown in the return referred to in sub-section (2), as the Bank may from time to
time, having regard to the needs of securing the monetary stability in the country,
notify in the Gazette of India:
* * * * *
Explanation.—For the purposes of this section,—
* * * * *
(b) “fortnight” shall mean the period from Saturday to the second following
Friday, both days inclusive;
* * * * *
(2) Every scheduled bank shall send to the Bank a return signed by two
responsible officers of such bank showing—
(a) the amount of its demand and time liabilities and the amount of its
borrowings from banks in India, classifying them into demand and time
liabilities,
(b) the total amount of legal tender notes and coins held by it in India,
(c) the balance held by it at the Bank in India,
(d) the balances held by it at other banks in current account and the money
at call and short notice in India,
(e) the investments (at book value) in Central and State Government
securities including treasury bills and treasury deposit receipts,
(f) the amount of advances in India,
(g) the inland bills purchased and discounted in India and foreign bills
purchased and discounted,
at the close of business on each alternate Friday, and every such return shall be
sent not later than seven days after the date to which it relates:
* * * * *
Provided further that where such alternate Friday is a public holiday under the
Negotiable Instruments Act, 1881 for one or more offices of a scheduled bank the
return shall give the preceding working day’s figures in respect of such office or
offices, but shall nevertheless be deemed to relate to that Friday:
Provides also that where the Bank is satisfied that the furnishing of a
fortnightly return under this sub-section is impracticable in the case of any
scheduled bank by reason of the geographical position of the bank and its branches,
the Bank may allow such bank—
(i) to furnish a provisional return for the fortnight within the period
aforesaid to be followed by a final return not later than twenty days after the
date to which it relates, or
(ii) to furnish in lieu of a fortnightly return a monthly return to be sent
not later than twenty days after the end of the month to which it relates giving
the details specified in this sub-section in respect of such bank at the close of
business for the month.
Cash reserves of
scheduled banks
to be kept with
the Bank.
10
Interpretation.
Board of
directors to
include persons
with
professional or
other
experience.
Prohibition of
common
directors.
Cash reserve.
(2A) Where the last Friday of a month is not an alternate Friday for the purpose
of sub-section (2), every scheduled bank shall send to the Bank, a special return
giving the details specified in sub-section (2) as at the close of business on such last
Friday or where such last Friday is a public holiday under the Negotiable Instruments
Act, 1881 as at the close of business on the preceding working day and such return
shall be sent not later than seven days after the date to which it relates.
* * * * *
————
EXTRACTS FROM THE BANKING REGULATION ACT, 1949
(10 OF 1949)
* * * * *
5. In this Act, unless there is anything repugnant in the subject or context,—
* * * * *
(ne) “substantial interest”,—
(i) in relation to a company, means the holding of a beneficial
interest by an individual or his spouse or minor child, whether singly
or taken together in the shares thereof, the amount paid-up on which
exceeds five lakhs of rupees or ten per cent. of the paid-up capital of
the company, whichever is less;
* * * * *
10A. (1) * * * * *
(2A) Notwithstanding anything to the contrary contained in the Companies
Act, 1956, or in any other law for the time being in force,—
(i) no director of a banking company, other than its chairman or
whole-time director, by whatever name called, shall hold office
continuously for a period exceeding eight years;
* * * * *
16. (1) * * * * *
(3) Nothing in sub-section (1) shall apply to, or in relation to, any director
appointed by the Reserve Bank.
* * * * *
18. (1) Every banking company, not being a scheduled bank, shall maintain
in India on a daily basis by way of cash reserve with itself or by way of balance in
a current account with the Reserve Bank, or by way of net balance in current
accounts or in one or more of the aforesaid ways, a sum equivalent to such per cent.
of the total of its demand and time liabilities in India as on the last Friday of the
second preceding fortnight as the Reserve Bank may specify, by notification in the
Official Gazette, from time to time, having regard to the needs of securing the
monetary stability in the country and shall submit to the Reserve Bank before the
twentieth day of every month a return showing the amount so held on alternate
Fridays during a month with particulars of its demand and time liabilities in India
on such Fridays or if any such Friday is a public holiday under the Negotiable
Instruments Act, 1881, at the close of business on the preceding working day.
Explanation.—In this section, and in section 24,—
* * * * *
(b) “fortnight” shall mean the period from Saturday to the second
following Friday, both days inclusive;
* * * * *
26 of 1881.
1 of 1956.
26 of 1881.
11
2 of 1934.
26 of 1881.
26 of 1881.
24. (2A) A scheduled bank, in addition to the average daily balance which
it is, or may be, required to maintain under section 42 of the Reserve Bank of
India Act, 1934 and every other banking company, in addition to the cash reserve
which it is required to maintain under section 18, shall maintain in India, assets,
the value of which shall not be less than such percentage not exceeding forty
percent. of the total of its demand and time liabilities in India as on the last Friday
of the second preceding fortnight as the Reserve Bank may, by notification in the
Official Gazette, specify from time to time and such assets shall be maintained,
in such form and manner, as may be specified in such notification.
(3) For the purpose of ensuring compliance with the provisions of this
section, every banking company shall, not later than twenty days after the end of
the month to which it relates, furnish to the Reserve Bank in the prescribed form
and manner a monthly return showing particulars of its assets maintained in
accordance with this section, and its demand and time liabilities in India at the
close of business on each alternate Friday during the month, or if any such Friday
is a public holiday, at the close of business on the preceding working day:
Provided that every Reginal Rural Bank shall also furnish a copy of the said
return to the National Bank.
(4) (a) If on any alternate Friday or, if such Friday is a public holiday, on
the preceding working day, the amount maintained by a banking company at the
close of business on that day falls below the minimum prescribed by or under
sub-section (2A), such banking company shall be liable to pay to the Reserve Bank
in respect of that day's default, penal interest for that day at the rate of three per
cent. per annum above the bank rate on the amount by which the amount actually
maintained falls short of the prescribed minimum or that day; and
(b) if the default occurs again on the next succeeding alternate Friday, or, if
such Friday is a public holiday, on the preceding working day, and continues on
succeeding alternate Fridays or preceding working days, as the case may be, the
rate of penal interest shall be increased to a rate of five per cent. per annum above
the bank rate on each such shortfall in respect of that alternate Friday and each
succeeding alternate Friday or preceding working day, if such Friday is a public
holiday, on which the default continues.
* * * * *
(7) When under the provisions of clause (b) of sub-section (4), penal interest at the
increased rate of five per cent. above the bank rate has become payable by a banking
company, if thereafter the amount required to be maintained on the next succeeding
alternate Friday, or if such Friday is a public holiday, the next preceding working day, is
still below the prescribed minimum, every director, manager or secretary of the banking
company, who is knowingly and wilfully a party to the default, shall be punishable with
fine which may extend to five hundred rupees and with a further fine which may extend
to five hundred rupees for each subsequent alternate Friday or the preceding working day,
as the case may be, on which the default continues.
* * * * *
25. (1) The assets in India of every banking company at the close of business
on the last Friday of every quarter or, if that Friday is a public holiday under the
Negotiable Instruments Act, 1881, at the close of the business on the preceding
working day, shall not be less than seventy-five per cent. of its demand and time
liabilities in India.
(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 assets and
liabilities referred to in sub-section (1) as at the close of business on the last Friday of the
previous quarter, or, if that Friday is a public holiday under the Negotiable Instruments
Act, 1881, at the close of business on the preceding working day:
Maintenance of
a percentage of
assets.
Assets in India.
12
Monthly returns
and power to
call for other
returns and
information.
Nomination for
payment of
depositors'
money.
Nomination for
return of
articles kept in
safe custody
with banking
company.
Release
contents of
safety Release
of lockers.
Act to apply to
co-operative
societies
subject to
modifications.
Cash reserve.
Provided that every Reginal Rural Bank shall also furnish a copy of the said
return to the National Bank.
* * * * *
27. (1) Every banking company shall, before the close of the month succeeding
that to which it relates, submit to the Reserve Bank a return in the prescribed form and
manner showing its assets and liabilities in India as at the close of business on the last
Friday of every month or if that Friday is a public holiday under the Negotiable
Instruments Act, 1881, at the close of business on the preceding working day.
* * * * *
45ZA. (1) Where a deposit is held by a banking company to the credit of one or
more persons, the depositor or, as the case may be, all the depositors together, may
nominate, in the prescribed manner, one person to whom in the event of the death of
the sole depositor or the death of all the depositors, the amount of deposit may be
returned by the banking company.
* * * * *
45ZC. (1) Where any person leaves any article in safe custody with a
banking company, such person may nominate, in the prescribed manner, one
person to whom, in the event of the death of the person leaving the article in safe
custody, such article may be returned by the banking company.
* * * * *
45ZE. (1) Where an individual is the sole hirer of a locker from a banking
company, whether such locker is located in the safe deposit vault of such banking
company or elsewhere, such individual may nominate one person to whom, in the
event of the death of such individual, the banking company may give access to
the locker and liberty to remove the contents of the locker.
* * * * *
PART V
APPLICATION OF THE ACT TO CO-OPERATIVE BANKS
56. Notwithstanding anything contained in any other law for the time being
in force, the provisions of this Act, shall apply to, or in relation to, co-operative
societies as they apply to, or in relation to, banking companies subject to the
following modifications, namely:—
* * * * *
(c) in section 5,—
* * * * *
(ii) clauses (ff), (h) and (nb) shall be omitted;
* * * * *
(j) for section 18, the following section shall be substituted:—
18. (1) Every co-operative bank, not being a co-operative bank for
the time being included in the Second Schedule to the Reserve Bank of
India Act, 1934 (hereinafter referred to as a “scheduled State Co-operative
Bank”), shall maintain in India by way of cash reserve with itself or by
way of balance in a current account with the Reserve Bank or the State
Co-operative Bank of the State concerned or by way of net balance in
current accounts, or, in the case of a primary co-operative bank, with the
central co-operative bank of the district concerned, or in one or more of
the aforesaid ways, a sum equivalent to such per cent. of the total of its
demand and time liabilities in India, as on the last Friday of the second
preceding fortnight as the Reserve Bank may specify, by notification in
the official Gazette, from time to time having regard to the needs for
securing the monetary stability in the country and shall submit to the
Reserve Bank before the fifteenth day of every month a return showing
26 of 1881.
2 of 1934.
13
1 of 1956.
1 of 1956.
1 of 1956.
1 of 1956.
the amount so held on alternate Friday during a month with particulars
of its demand and time liabilities in India on such Fridays or if any
such Friday is a public holiday under the Negotiable Instruments Act,
1881, at the close of business on the preceding working day.
Explanation.—In this section and in section 24—
* * * * *
(b) “fortnight” shall mean the period from Saturday to the second
following Friday, both days inclusive;
* * * * *
————
EXTRACTS FROM THE STATE BANK OF INDIA ACT, 1955
(23 OF 1955)
* * * * *
38A. (1) * * * *
(3) Any money transferred to the unpaid dividend account of the State Bank,
in pursuance of this section which remains unpaid or unclaimed for a period of
seven years from the date of such transfer shall be transferred by the State Bank
to the Investor Education and Protection Fund established under sub-section (1)
of section 205C of the Companies Act, 1956 for being utilised for the purpose and
in the manner specified in that section.
* * * *
41. (1) The affairs of the State Bank shall be audited by two or more auditors
duly qualified to act as auditors of companies under section 226 of the Companies
Act, 1956, who shall be appointed by the State Bank with the previous approval
of the Reserve Bank.
(2) The auditors shall receive such remuneration as the Reserve Bank may
fix in consultation with the Central Government.
* * * * *
————
EXTRACTS FROM THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF
UNDERTAKINGS) ACT, 1970
(5 OF 1970)
* * * * *
CHAPTER V
MISCELLANEOUS
10. (1) * * * * *
(2) Every auditor of a corresponding new bank shall be a person who is
qualified to act as an auditor of a company under section 226 of the Companies
Act, 1956, and shall receive such remuneration as the Reserve Bank may fix in
consultation with the Central Government.
* * * * *
10B. (1) * * * * *
(3) Any money transferred to the Unpaid Dividend Account of a
corresponding new bank in pursuance of this section which remains unpaid or
unclaimed for a period of seven years from the date of such transfer, shall be
transferred by the corresponding new bank to the Investor Education and
Protection Fund established under sub-section (1) of section 205C of the
Companies Act, 1956.
Transfer of
unpaid or
unclaimed
dividend.
Audit.
Closure of
accounts and
disposal of
profits.
Transfer of
unpaid or
unclaimed
dividend to
Unpaid
Dividend
Account.
14
Closure of
accounts and
disposal of
profits.
Transfer of
unpaid or
unclaimed
dividend to
Unpaid
Dividend
Account.
(4) The money transferred under sub-section (3) to the Investor Education
and Protection Fund shall be utilised for the purposes and in the manner specified
in section 205C of the Companies Act, 1956.
* * * * *
————
EXTRACTS FROM THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF
UNDERTAKINGS) ACT, 1980
(40 OF 1980)
* * * * *
CHAPTER V
MISCELLANEOUS
10. (1) * * * * *
(2) Every auditor of a corresponding new bank shall be a person who is
qualified to act as an auditor of a company under section 226 of the Companies
Act, 1956 and shall receive such remuneration as the Reserve Bank may fix in
consultation with the Central Government.
* * * * *
10B. (1) * * * * *
(3) Any money transferred to the Unpaid Dividend Account of a
corresponding new bank in pursuance of this section which remains Unpaid or
unclaimed for a period of seven years from the date of such transfer, shall be
transferred by the corresponding new bank to the Investor Education and
Protection Fund established under sub-section (1) of section 205C of the
Companies Act, 1956.
(4) The money transferred under sub-section (3) to the Investor Education
and Protection Fund shall be utilised for the purposes and in the manner specified
in section 205C of the Companies Act, 1956.
* * * * *
1 of 1956.
1 of 1956.
1 of 1956.
1 of 1956.
LOK SABHA
————
A
BILL
further to amend the Reserve Bank of India Act, 1934, the Banking Regulation
Act, 1949, the State Bank of India Act, 1955, the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 and the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980.
————
(Smt. Nirmala Sitharaman, Minister of Finance and Corporate Affairs.)
