BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1970
CHAPTER I PRELIMINARY
1. Short title and commencement 1
2. Definitions 1
CHAPTER II
TRANSFER OF THE UNDERTAKINGS OF EXISTING BANKS AND SHARE CAPITALS OF THE CORRESPONDING NEW BANKS
3. Establishment of corresponding new banks and business thereof 3
3A. Trust not to be entered on the register 8
3B. Register of beneficial owners 8
4. Undertaking of existing banks to vest in corresponding new banks 8
5. General effect of vesting 8
CHAPTER III
PAYMENT OF COMPENSATION
6. Payment of compensation 9
CHAPTER IV
MANAGEMENT OF CORRESPONDING NEW BANKS
7. Head office and management 11
8. Corresponding new banks to be guided by the Directions of the Central Government 12
9. Power of Central Government to make scheme 12
9A. Power of Reserve Bank to appoint additional director 17 I-5
10. Closure of accounts and disposal of profits 18
10A. Annual general meeting 20
10B. Transfer of unpaid or unclaimed money 21
11. Corresponding new bank deemed to be an Indian company 22
12. Removal of Chairman from office 22
12A. Bonus
13. Obligations as to fidelity and secrecy
14. Custodian to be public servant
15. Certain defects not to invalidate acts or proceedings
16. Indemnity
16A. Arrangement with corresponding new bank on appointment of directors to prevail
17. References to existing banks on and from the commencement of this Act
18. Dissolution
18A. Supersession of Board in certain cases
19. Power to make regulations
20. Amendment of certain enactments
BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1980
TRANSFER OF THE UNDERTAKINGS OF EXISTING BANKS AND SHARE CAPITALS OF THE CORRESPONDING NEW BANKS
3. Establishment of corresponding new banks and business thereof
3A. Trust not to be entered on the register
3B. Register of beneficial owners
4. Undertakings of existing banks to vest in corresponding new banks
5. General effect of vesting
6. Payment of amount
OF
7. Head office and management
8. Corresponding new banks to be guided by the directions of the Central Government
9. Power of Central Government to make scheme
9A. Power of Reserve Bank to appoint additional director
MISCELLANEOUS
10. Closure of accounts and disposal of profits
10A. Annual general meeting
10B. Transfer of unpaid or unclaimed money
11. Corresponding new bank deemed to be an Indian Company
12. Vacation of office of Chairman, etc.
12A. Bonus
13. Obligations as to fidelity and secrecy
14. Custodian to be public servant
15. Certain defects not to invalidate acts or proceedings
16. Indemnity
16A. Arrangement with corresponding new bank on appointment of directors to prevail
17. Construction of references to existing banks
18. Dissolution
18A. Supersession of Board in certain cases
19. Power to make regulations
20. [Repealed by the Repealing and Amending Act, 1988, w.e.f. 31-3-1988]
21. Repeal and saving
NATIONALISED BANKS (MANAGEMENT AND MISCELLANEOUS PROVISIONS) SCHEME, 1970
CHAPTER I INTRODUCTORY
1. Short title and commencement
Definitions 69
CHAPTER II
3. Constitution of the Board
4. Manner of retirement of nominee directors
4A. Manner of retirement of excess elected director
5. Chairman
6. Managing Director
7. Same person may hold office as Chairman and Managing Director 73
7A. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 73
7B. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 74
7C. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 74
8. Term of office and remuneration of a whole-time Director including Managing Director 74
9. Term of office of other directors
10. Disqualification of Directors
11. Vacation of office of directors, etc.
11A. Removal from office of an elected director
11B. Filling of vacancy in the office of an elected director
12. Meetings of the Board
CHAPTER III
COMMITTEES OF THE BOARD
13. Management of Committee 79
13A. Credit Approval Committee
14. Advisory Committees
14A. Special provision
CHAPTER IV
15. Regional Consultative Committee for Nationalised Bank 83
CHAPTER V
MISCELLANEOUS
16. Disqualifications for membership of a committee constituted under clause 14 or a Regional Consultative Committee and vacation of office by a member 84
17. Remuneration and reimbursement of travelling expenses 85
18. Resolution without meeting of the Board valid 85
19. Meeting of advisory committee constituted under clause 14 86
CHAPTER VI
PAID-UP CAPITAL
20. Increase of paid-up capital 86
21. Appropriation from share premium account 86 FIRST SCHEDULE 86
NATIONALISED BANKS (MANAGEMENT AND MISCELLANEOUS PROVISIONS) SCHEME, 1980
CHAPTER I INTRODUCTORY
1. Short title and commencement 94 2. Definitions 94
CHAPTER II BOARD OF DIRECTORS
3. Constitution of the Board 96
4. Manner of retirement of nominee Directors 97
4A. Manner of retirement of excess elected director 97
5. Chairman 97
6. Managing Director 98
7. Same person may hold office as Chairman and Managing Director 98
7A. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 98
7B. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 99
7C. [Omitted by the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022, w.e.f. 1-7-2022] 99
8. Term of office and remuneration of a whole-time Director including Managing Director 100
NEW BANK OF INDIA (AMALGAMATION AND TRANSFER OF UNDERTAKING) SCHEME, 1993
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
[5 OF 1970]1
An Act to provide for the acquisition and transfer of the undertakings of certain banking companies, having regard to their size, resources, coverage and organisation, in order to control the heights of the economy and to meet progressively, and serve better, the needs of development of the economy in conformity with national policy and objectives and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Twenty-first Year of the Republic of India as follows:—
CHAPTER I PRELIMINARY
Short title and commencement.
1. (1) This Act may be called the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
(2)The provisions of this Act (except section 21, which shall come into force on the appointed day) shall be deemed to have come into force on the 19th day of July, 1969.
Definitions.
2. In this Act, unless the context otherwise requires,—
(a)“appointed day” means the 14th day of February, 1970, being the day on which the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1970 (3 of 1970), was promulgated;
(b)“banking company” does not include a foreign company within the meaning of section 591 of the Companies Act, 1956 (1 of 1956)2;
1.Dated 31-3-1970.
2. See now sections 2(42) and 379 of the Companies Act, 2013.
S.2 BANKING COMPANIES (ACQUISITION AND TRANSFER) ACT, 1970 2
(c) “commencement of this Act” means the 19th day of July, 1969;
(d)“corresponding new bank”, in relation to an existing bank, means the body corporate specified against such bank in column 2 of the First Schedule;
(e)“Custodian” means the person who becomes, or is appointed, a Custodian under section 7;
(
f)“existing bank” means a banking company specified in column 1 of the First Schedule, being a company the deposits of which, as shown in the return as on the last Friday of June, 1969, furnished to the Reserve Bank under section 27 of the Banking Regulation Act, 1949 (10 of 1949), were not less than rupees fifty crores;
3[(fa) “prescribed” means prescribed by regulations made under this Act;]
(g)“Schedule” means a Schedule to this Act;
(h)words and expressions used herein and not defined but defined in the Banking Regulation Act, 1949 (10 of 1949), have the meanings respectively assigned to them in that Act;
3[(i) words and expressions used herein and not defined either in this Act or in the Banking Regulation Act, 1949 (10 of 1949) but defined in the Companies Act, 1956 (1 of 1956)* shall have the meanings respectively assigned to them in the Companies Act, 1956*.]
COMMENTS
SECTION NOTES
2.1 Definition of “Appointed Day” [Section 2(a)]
Specific date and significance
Appointed day means the 14th day of February, 1970.
This is the date on which the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1970 (3 of 1970) was promulgated.
2.2 Definition of “Banking Company” [Section 2(b)]
Scope of term
Banking company refers to companies engaged in banking.
Specific exclusion
The definition does not include a foreign company as defined under section 591 of the Companies Act, 1956.
2.3 Definition of “Corresponding New Bank” [Section 2(d)]
Nature and identification
A corresponding new bank is the body corporate specified in column 2 of the First Schedule.
3.Inserted by the Banking Companies (Acquisition and Transfer of Undertakings) Amendment Act, 1994, w.e.f. 15-7-1994.
*Now the Companies Act, 2013.
BANKING COMPANIES (ACQUISITION AND TRANSFER) ACT, 1970 S. 3
It is identified in relation to an “existing bank” listed in the corresponding entry of the schedule.
2.4 Definition of “Existing Bank” [Section 2(f)]
Classification and Schedule
Existing bank means a banking company specified in column 1 of the First Schedule.
Financial criteria for qualification
The company must have had deposits of not less than fifty crore rupees.
This deposit amount is determined based on the return as of the last Friday of June, 1969.
The return must have been furnished to the Reserve Bank under section 27 of the Banking Regulation Act, 1949.
CHAPTER II
4[TRANSFER OF THE UNDERTAKINGS OF EXISTING BANKS AND SHARE CAPITALS OF THE CORRESPONDING NEW BANKS]
Establishment of corresponding new banks and business thereof.
3. (1) On the commencement of this Act, there shall be constituted such corresponding new banks as are specified in the First Schedule.
(2) The paid-up capital of every corresponding new bank constituted under sub-section (1) shall, until any provision is made in this behalf in any scheme made under section 9, be equal to the paid-up capital of the existing bank in relation to which it is the corresponding new bank.
5[6[(2A) Subject to the provisions of this Act, the authorised capital of every corresponding new bank shall be three thousand crores of rupees divided into three hundred crores of fully paid-up shares of ten rupees each:
4. Substituted for “TRANSFER OF THE UNDERTAKINGS OF EXISTING BANKS” by the Banking Companies (Acquisition and Transfer of Undertakings) Amendment Act, 1994, w.e.f. 15-7-1994.
5. Sub-sections (2A), (2B), (2C), (2D), (2E), (2F), (2G) and (3) substituted for sub-sections (2A) and (3), ibid. Prior to their substitution, sub-sections (2A) and (3), read as under:
“(2A) Notwithstanding anything contained in sub-section (2), the paid-up capital of every corresponding new bank constituted under sub-section (1) may from time to time be increased by -
(
a) such amounts as the Board of Directors of the corresponding new bank may, after constitution with the Reserve Bank and with the previous sanction of the Central Government, transfer from the reserve fund established by such bank to such paid up capital;
(b) such amounts as the Central Government may in consultation with the Reserve Bank, contribute to such paid-up capital:
Provided that the paid-up capital of any such bank shall in no case be in excess of rupees one hundred crores.”.
(3) The entire capital of each corresponding new bank shall stand vested in, and allotted to, the Central Government.”
6. Substituted by the Banking Laws (Amendment) Act, 2012, w.e.f. 18-1-2013. Prior to its substitution, sub-section (2A) as inserted by the Banking Laws (Amendment) Act, 1985, w.e.f. 30-12-1985 and later on amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, w.e.f. 30-12-1988 and Banking Companies (Acquisition and Transfer of Undertakings) Amendment Act, 1992, read as under: (Contd. on p. 4)
S. 3 BANKING COMPANIES (ACQUISITION AND TRANSFER) ACT, 1970 4
Provided that the corresponding new bank may reduce the nominal or face value of the shares, and divide the authorised capital into such denomination as it may decide with the prior approval of the Reserve Bank:
Provided further that the Central Government may in consultation with the Reserve Bank and by notification in the Official Gazette increase or reduce the authorised capital as it deems fit so however that the shares in all cases shall be fully paid-up shares.]
(2B) Notwithstanding anything contained in sub-section (2), the paid-up capital of every corresponding new bank constituted under sub-section (1) may from time to time be increased by :—
(
a) such amounts as the Board of Directors of the corresponding new bank may, after consultation with the Reserve Bank and with the previous sanction of the Central Government, transfer from the reserve fund established by such bank to such paid-up capital;
(
b) such amounts as the Central Government may, after consultation with the Reserve Bank, contribute to such paid-up capital;
7[(c) such amounts as the Board of Directors of the corresponding new bank may, after consultation with the Reserve Bank and with the previous sanction of the Central Government, raise whether by public issue 8[or rights issue or by issue of bonus shares] or preferential allotment or private placement, of equity shares or preference shares in accordance with the procedure as may be prescribed, so, however, that the Central Government shall, at all times, hold not less than fifty-one per cent of the paid-up capital consisting of equity shares of each corresponding new bank :
Provided that the issue of preference shares shall be in accordance with the guidelines framed by the Reserve Bank specifying the class of preference shares, the extent of issue of each class of such preference shares (whether perpetual or irredeemable or redeemable) and the terms and conditions subject to which, each class of preference shares may be issued.]
(Contd. from p. 3)
“(2A) Subject to the provisions of this Act, the authorised capital of every corresponding new bank shall be one thousand five hundred crores of rupees divided into one hundred fifty crores fully paid-up shares of ten rupees each:
Provided that the Central Government may, after consultation with the Reserve Bank and by notification in the Official Gazette, increase or reduce the authorised capital as it thinks fit, so however that after such increase or reduction, the authorised capital shall not exceed three thousand crores or be less than one thousand five hundred crores, of rupees.”
7. Substituted by the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, w.e.f. 16-10-2006. Prior to its substitution, clause (c) read as under:
“(c) such amounts as the Board of Directors of the corresponding new bank may, after consultation with the Reserve Bank and with the previous sanction of the Central Government, raise by public issue of shares in such manner as may be prescribed, so, however that the Central Government shall, at all times, hold not less than fifty-one per cent of the paid-up capital of each corresponding new bank.”
8. Inserted by the Banking Laws (Amendment) Act, 2012, w.e.f. 18-1-2013.
