THE BANKING COMPANIES (ACQUISITION AND 
TRANSFER OF UNDERTAKINGS) ACT, 1970 
___________ 

ARRANGEMENT OF SECTIONS 
____________ 

CHAPTER I 

PRELIMINAR 

SECTIONS 

1.  Short title and commencement 
2.  Definitions. 

CHAPTER II 

TRANSFER OF THE UNDERTAKINGSOF 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.  Undertaking of existing banks to vest in corresponding new banks. 
5.  General effect of vesting. 

6.  Payment of compensation. 

CHAPTER III 

PAYMENT OF COMPENSATION 

CHAPTER IV 

MANAGEMENT OF CORRESPONDING NEW BANKS 

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. 

CHAPTER V 
MISCELLANEOUS 

10.  Closure of accounts and disposal of profits. 
 10A. Annual general meeting. 
 10B. Transfer of unpaid or unclaimed dividend to Unpaid Dividend Account. 
11.  Corresponding new bank deemed to be an Indian company. 
12.  Removal of Chairman from office. 
 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. 

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SECTIONS 

19.  Power to make regulations. 
20.  Amendment of certain enactments. 
21.  Repeal and savings. 

THE FIRST SCHEDULE. 

THE SECOND SCHEDULE. 

THE THIRD SCHEDULE. 

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THE BANKING COMPANIES (ACQUISITION AND 
TRANSFER OF UNDERTAKINGS) ACT, 1970 

ACT NO. 5 OF 1970 

[31st March, 1970.]  

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 

1.  Short  title  and  commencement.—(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. 

2. Definitions.—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  (Ord.  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); 

(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; 

1[(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; 

1[(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.] 

1. Ins. by Act 37 of 1994, s. 2 (w.e.f. 15-7-1994). 

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CHAPTER II 
1[TRANSFER OF THE UNDERTAKINGSOF EXISTING BANKS AND SHARE CAPITALS OF THE  
CORRESPONDING NEW BANKS] 

3. Establishment of corresponding new banks and business thereof.—(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. 

2[3[(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: 

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; 

4[(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  issue5[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.] 
6[(2BB) Notwithstanding anything contained in sub-section (2) the paid-up capital of a corresponding 
new  bank  constituted  under  sub-section  (1)  may,  from  time  to  time  and  before  any  paid-up  capital 
is 7[raised by public issue 5[or rights issue or by issue of bonus shares]or preferential allotment or private 
placement] under clause (c) of sub-section (2B), be reduced by— 

(a) the Central Government, after consultation with the Reserve Bank, by cancelling any paid-up 

capital which is lost, or is unrepresented by available assets; 

1. Subs. by Act 37 of 1994, s. 3, for the heading (w.e.f. 15-7-1994). 
2. Subs. by s. 4, ibid., for sub-sections (2A) and (3) (w.e.f. 15-7-1994). 
3. Subs. by Act 4 of 2013, s. 15, for sub-section (2A) (w.e.f. 18-1-2013). 
4. Subs. by Act 45 of 2006, s. 2, for clause (c) (w.e.f. 16-10-2006). 
5. Ins. by Act 4 of 2013, s. 15 (w.e.f. 18-1-2013). 
6. Ins. by Act 8 of 1995, s. 2 (w.e.f. 21-1-1995). 
7. Subs. by Act 45 of 2006, s. 2, for “raised by public issue” (w.e.f. 16-10-2006). 

4 

 
                                                           
(b)  the  Board  of  Directors,  after  consultation  with  the  Reserve  Bank  and  with  the  previous 
sanction of the Central Government, by paying off any paid-up capital which is in excess of the wants 
of the corresponding new bank: 

Provided that in a case where such capital is lost, or is unrepresented by available assets because of 
amalgamation of another corresponding new bank or a corresponding new bank as defined in clause (d) of 
section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) 
with the corresponding new bank, such reduction may be done, either prospectively or retrospectively, but 
not from a date earlier than the date of such amalgamation. 

(2BBA)(a)  A  corresponding  new  bank  may,  from  time  to  time  and  after  any  paid-up  capital  has 
been 1[raised  by  public  issue2[or  rights  issue  or  by  issue  of  bonus  shares]or  preferential  allotment  or 
private placement] under clause (c) of sub-section (2B), by resolution passed at an annual general meeting 
of  the shareholders entitled  to  vote,  voting  in  person,  or,  where  proxies  are  allowed,  by  proxy,  and  the 
votes cast in favour of the resolution are not less than three times the number of the votes, if any, cast 
against the resolution by the shareholders so entitled and voting, reduce its paid-up capital in any way. 

(b) Without prejudice to the generality of the foregoing power, the paid-up capital may be reduced  

by— 

(i)  extinguishing  or  reducing  the  liability  on  any  of  its  shares  in  respect  of  share  capital  not  

paid-up; 

(ii)  either  with  or  without  extinguishing  or  reducing  liability  on  any  of  its  paid-up  shares, 

cancelling any paid-up capital which is lost, or is unrepresented by available assets; or 

(iii) either with or without extinguishing or reducing liability on any of its paid-up shares, paying 

off any paid-up share capital which is in excess of the wants of the corresponding new bank. 

(2BBB)  Notwithstanding  anything  contained  in  sub-section  (2BB)  or  sub-section  (2BBA),  the  
paid-up  capital  of  a  corresponding  new  bank  shall  not  be  reduced  at  any  time  so  as  to  render  it  below 
twenty-five per cent.of the paid-up capital of that bank as on the date of commencement of the Banking 
Companies (Acquisition and Transfer of Undertakings) Amendment Act, 1995 (8 of 1985).] 

(2C) The entire paid-up capital of a corresponding new bank, except the paid-up capital1[raised from 
public  by  public  issue2[or  rights  issue  or  by  issue  of  bonus  shares]or  preferential  allotment  or  private 
placement]  under  clause  (c)  of  sub-section  (2B),  shall  stand  vested  in,  and  allotted  to,  the  Central 
Government. 

(2D) The shares of every corresponding new bank not held by the Central Government shall be freely 

transferable: 

Provided  that no  individual  or  company  resident  outside  India  or  any  company  incorporated  under 
any law not in force in India or any branch of such company, whether resident outside India or not, shall 
at any time hold or acquire by transfer or otherwise shares of the corresponding new bank so that such 
investment  in  aggregate  exceed  the  percentage,  not  being  more  than twenty per  cent.  of  the  paid-up 
capital, as may be specified by the Central Government by notification in the Official Gazette. 

Explanation.—For the purposes of this clause,“company” means any body corporate and includes a 

firm or other association of individuals. 

(2E)  No  shareholder  of  the  corresponding  new  bank,  other  than  the  Central  Government,  shall  be 
entitled to exercise voting rights in respect of any shares held by him in excess of3[ten per cent.] of the 
total voting rights of all the shareholders of the corresponding new bank. 

1. Subs. by Act 45 of 2006, s. 2, for “raised by public issue” (w.e.f. 16-10-2006). 
2. Ins. by Act 4 of 2013, s. 15 (w.e.f. 18-1-2013). 
3. Subs. by s.15, ibid., for “one per cent.” (w.e.f. 18-1-2013). 

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1[Provided that the shareholder holding any preference share capital in the corresponding new bank 
resolutions  placed  before 

shall, 
suchcorresponding new bank which directly affects the rights attached to his preference shares: 

in respect of  such capital,  have  a 

to  vote  only  on 

right 

Provided further that 2[no preference shareholder, other than the Central Government, shall be entitled 
to exercise voting rights in respect of preference shares held by him in excess of ten per cent.] of the total 
voting rights of all the shareholders holding preference share capital only.] 

(2F) Every corresponding new bank shall keep at its head office a register, in one or more books, of 
the shareholders (in this Act referred to as the register) and shall enter therein the following particulars:— 

(i) the names, addresses and occupations, if any, of the shareholders and a statement of the shares 

held by each shareholder, distinguishing each share by its denoting number; 

(ii) the date on which each person is so entered as a shareholder; 

(iii) the date on which any person ceases to be a shareholder; and 

(iv) such other particulars as may be prescribed: 

3[Provided that nothing in this sub-section shall apply to the shares held with a depository.] 

(2G)  Notwithstanding  anything  contained  in  sub-section  (2F),  it  shall  be  lawful  for  every 
corresponding new bank to keep the register in computer floppies or diskettes subject to such safeguards 
as may be prescribed. 

(3) Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872) a copy of, or 
extract from, the register, certified to be a true copy under the hand of an officer of the corresponding new 
bank authorised in this behalf by it, shall, in all legal proceedings, be admissible in evidence.] 

(4) Every corresponding new bank shall be a body corporate with 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 sue and be sued in its name. 

(5) Every corresponding new bank shall carry on and transact the business of banking as defined in 
clause  (b)  of  section  5  of  the  Banking  Regulation  Act,  1949  (10  of  1949)  and  may  engage  in 4[one  or 
more of the other forms of business] specified in sub-section (1) of section 6 of that Act. 

(6)  Every  corresponding  new  bank  shall  establish  a  reserve  fund  to  which  shall  be  transferred  the 
share premiums and the balance, if any, standing to the credit of the reserve fund of the existing bank in 
relation to which it is the corresponding new bank, and such further sums, if any, as may be transferred in 
accordance with the provisions of section 17 of the Banking Regulation Act, 1949 (10 of 1949). 

5[(7) (i) The corresponding new bank shall, if so required by the Reserve Bank, act as agent of the 

Reserve Bank at all places in India where it has a branch, for— 

(a)  paying,  receiving,  collecting  and  remitting  money,  bullion  and  securities  on  behalf  of  any 

Government in India; and 

(b)  undertaking  and  transacting  any  other  business  which  the  Reserve  Bank  may  from  time  to 

time entrust to it. 

(ii)  The  terms  and  conditions  on  which  any  such  agency  business  shall  be  carried  on  by  the 

corresponding new bank on behalf of the Reserve Bank shall be such as may be agreed upon. 

(iii)  If  no  agreement  can  be  reached  on  any  matter  referred  to  in  clause  (ii),  or  if  a  dispute  arises 
between  the  corresponding  new  bank  and  the  Reserve  Bank  as  to  the  interpretation  of  any  agreement 

1. Ins. by Act 45 of 2006, s. 2 (w.e.f. 16-10-2006). 
2. Subs. by Act 4 of 2013, s. 15, for certain words (w.e.f. 18-1-2013). 
3. Ins. by Act 8 of 1997, s. 16 (w.e.f. 15-1-1997). 
4. Subs. by Act 1 of 1984, s. 65, for “one or more forms of business” (w.e.f.15-2-1984). 
5. Ins. by s. 65, ibid. (w.e.f. 15-2-1984). 

6 

 
                                                           
between  them,  the  matter  shall  be  referred  to  the  Central  Government  and  the  decision  of  the  Central 
Government thereon shall be final. 

(iv) The corresponding new bank may transact any business or perform any functions entrusted to it 

under clause (i), by itself or through any agent approved by the Reserve Bank.] 

1[3A.Trust  not  to  be  entered  on  the  register.—Notwithstanding  anything  contained 
in  
sub-section (2F) of section 3, no notice of any trust, express, implied or constructive, shall be entered on 
the register, or be receivable, by the corresponding new bank:] 

2[Provided that nothing in this section shall apply to a depository in respect of shares held by it as a 

registered owner on behalf of the beneficial owners.] 

3[3B. Register of beneficial owners.—The register of beneficial owners maintained by a depository 
under  section  11  of  the  Depositories  Act,  1996  (22  of  1996),  shall  be  deemed  to  be  a  register  of 
shareholders for the purpose of this Act. 

Explanation.—For the purposes of section 3, section 3A and this section, the expressions “beneficial 
owner”,  “depository”  and  “registered  owner”  shall  have  the  meanings  respectively  assigned  to  them  in 
clauses (a), (e) and (j) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996).] 

4. Undertaking of existing banks to vest in corresponding new banks.—On the commencement of 
this  Act,  the  undertaking  of  every  existing  bank  shall  be  transferred  to,  and  shall  vest  in,  the 
corresponding new bank. 

5. General effect of vesting.—(1) The undertaking of each existing bank shall be deemed to include 
all  assets,  rights,  powers,  authorities  and  privileges  and  all  property,  movable  and  immovable,  cash 
balances, reserve funds, investments and all other rights and interests in, or arising out of, such property 
as were immediately before the commencement of this Act in the ownership, possession, power or control 
of  the  existing  bank  in  relation  to  the  undertaking,  whether  within  or  without  India,  and  all  books  of 
account, registers, records and all other documents of whatever nature relating thereto and shall also be 
deemed  to  include  all  borrowings,  liabilities  and  obligations  of  whatever  kind  then  subsisting  of  the 
existing bank in relation to the undertaking. 

(2) If, according to the laws of any country outside India, the provisions of this Act by themselves are 
not  effective  to  transfer  or  vest  any  asset  or  liability  situated  in  that  country  which  forms  part  of  the 
undertaking of an existing bank to, or in, the corresponding new bank, the affairs of the existing bank in 
relation to such asset or liability shall, on and from the commencement of this Act, stand entrusted to the 
chief executive officer for the time being of the corresponding new bankand the chief executive officer 
may exercise all powers and do all such acts and things as may be exercised or done by the existing bank 
for the purpose of effectively transferring such assets and discharging such liabilities. 

(3)  The  chief  executive  officer  of  the  corresponding  new  bank  shall,  in  exercise  of  the  powers 
conferred  on  him  by  sub-section  (2),  take  all  such  steps  as  may  be  required  by  the  laws  of  any  such 
country  outside  India  for  the  purpose  of  effecting  such  transfer  or  vesting,  and  may  either  himself  or 
through any person authorised by him in this behalf realise any asset and discharge any liability of the 
existing bank. 

(4) Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers 
of attorney, grants of legal representation and other instruments of whatever nature subsisting or having 
effect  immediately  before  the  commencement  of  this  Act  and  to  which  the  existing  bank  is  a  party  or 
which  are in  favour  of the  existing  bank  shall be  of as  full force  and  effect  against  or in favour  of  the 
corresponding new bank, and may be enforced or acted upon as fully and effectually as if in the place of 
the existing bank the corresponding new bank had been a party thereto or as if they had been issued in 
favour of the corresponding new bank. 

1. Ins. by Act 37 of 1994, s. 5 (w.e.f. 15-7-1994). 
2. Ins. by Act 8 of 1997, s. 17 (w.e.f. 15-1-1997). 
3. Ins. by s. 18, ibid. (w.e.f. 15-1-1997). 

7 

 
                                                           
(5) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any 
business  of  the  undertaking  which  has  been  transferred  under  section  4,  is  pending  by  or  against  the 
existing bank, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason 
of the transfer of the undertaking of the existing bank or of anything contained in this Act but the suit, 
appeal or other proceeding may be continued, prosecuted and enforced by or against the corresponding 
new bank. 

(6)  Nothing  in  this  Act  shall  be  construed  as  applying  to  the  assets,  rights,  powers,  authorities  and 
privileges and property, movable and immovable, cash balances and investments in any country outside 
India  (and  other  rights  and  interests in, or arising  out  of, such  property)  and  borrowings,  liabilities  and 
obligations of whatever kind subsisting at the commencement of this Act, of any existing bank operating 
in that  country  if,  under  the  laws in force in  that  country,  it is  not  permissible  for  a  banking  company, 
owned or controlled by Government, to carry on the business of banking there. 

CHAPTER III 

PAYMENT OF COMPENSATION 

6. Payment of compensation.—(1) Every existing bank shall be given by the Central Government 
such  compensation  in  respect  of  the  transfer,  under  section  4,  to  the  corresponding  new  bank  of  the 
undertaking of the existing bank as is specified against each such bank in the Second Schedule. 

(2) The amount of compensation referred to in sub-section (1) shall be given to every existing bank, 

at its option,— 

(a) in case (to be paid by cheque drawn on the Reserve Bank) in three equal annual instalments, 
the  amount  of  each  instalment  carrying  interest  at  the  rate  of  four  per  cent.  per  annum  from  the 
commencement of this Act, or 

(b)  in  saleable  or  otherwise  transferable  promissory  notes  or  stock  certificates  of  the  Central 

Government issued and repayable at par, and maturing at the end of— 

(i)  ten  years  from  the  commencement  of  this  Act  and  carrying  interest  from  such 

commencement at the rate of four and a half per cent. per annum, or 

(ii)  thirty  years  from  the  commencement  of  this  Act  and  carrying  interest  from  such 

commencement at the rate of five and a half per cent. per annum, or 

(c) partly in cash (to be paid by cheque drawn on the Reserve Bank) and partly in such number of 
securities specified in sub-clause (i) or sub-clause (ii), or both, of clause (b), as may be required by 
the existing bank, or  

(d) partly in such number of securities specified in sub-clause (i) of clause (b) and partly in such 
number  of  securities  specified  in  sub-clause  (ii)  of  that  clause,  as  may  be  required  by  the  existing 
bank. 

(3) The first of the three equal annual instalments referred to in clause (a) of sub-section (2) shall be 
paid, and the securities referred to in clause (b) of that sub-section shall be issued, within sixty days from 
the date of receipt by the Central Government of the option referred to in that sub-section, or where no 
such  option  has  been  exercised,  from  the  latest  date  before  which  such  option  ought  to  have  been 
exercised. 

(4)  The  option  referred  to  in  sub-section  (2)  shall  be  exercised  by  every  existing  bank  before  the 
expiry  of  a  period  of  three  months  from  the  appointed  day  (or  within  such  further  time,  not  exceeding 
three  months,  as  the  Central  Government  may,  on  the  application  of  the  existing  bank,  allow)  and  the 
option so exercised shall be final and shall not be altered or rescinded after it has been exercised. 

(5) Any existing bank which omits or fails to exercise the option referred to in sub-section (2), within 
the time specified in sub-section (4), shall be deemed to have opted for payment in securities specified in 
sub-clause (i) of clause (b) of sub-section (2). 

(6) Notwithstanding anything contained in this section, any existing bank may, before the expiry of 
three  months  from  the  appointed  day  (or  within  such  further  time,  not  exceeding  three  months,  as  the 

8 

 
Central Government may, on the application of the existing bank, allow) make an application in writing to 
the  Central  Government  for  an  interim  payment  of  an  amount  equal  to  seventy-five  per  cent.  of  the 
amount  of  the  paid-up  capital  of  such  bank,  as  on  the  commencement  of  this  Act,  indicating  therein 
whether the payment is desired in cash or in securities specified in sub-section (2), or in both. 

(7) The Central Government shall, within sixty days from the receipt of the application referred to in 
sub-section (6), make the interim payment to the existing bank in accordance with the option indicated in 
such application. 

(8) The interim payment made to an existing bank under sub-section (7) shall be set off against the 
total  amount  of  compensation  payable  to  such  existing  bank  under  this  Act  and  the  balance  of  the 
compensation remaining outstanding after such payment shall be given to the existing bank in accordance 
with the option exercised, or deemed to have been exercised, under sub-section (4) or sub-section (5), as 
the case may be: 

Provided  that  where  any  part  of  the  interim  payment  is  obtained  by  an  existing  bank  in  cash,  the 
payment so obtained shall be set off, in the first instance, against the first instalmentof the cash payment 
referred  in  sub-section  (2),  and  in  case  the  payment  so  obtained  exceeds  the  amount  of  the  first 
instalment,  the  excess  amount  shall  be  adjusted  against  the  second  instalment  and  the  balance  of  such 
excess amount, if any, against the third instalment of the cash payment. 

(9) Any payment purported to have been made to an existing bank under sub-section (3) of section 15 
of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969 (22 of 1969), shall be 
deducted by the Central Government from the amount of the interim payment made to such existing bank 
under  sub-section  (7),  or  where  no  such  interim  payment  has  been  made,  from  the  total  amount  of  the 
compensation  due  to  such  existing  bank,  and  the  amount  so  deducted  shall  be  paid  by  the  Central 
Government to the corresponding new bank. 

CHAPTER IV 

MANAGEMENT OF CORRESPONDING NEW BANKS 

7. Head office and management.—(1) The head office of each corresponding new bank shall be at 
such place as the Central Government may, by notification in the Official Gazette, specify in this behalf, 
and, until any such place is so specified, shall be at such place at which the head office of the existing 
bank, in relation to which it is the corresponding new bank, is on the commencement of this Act, located. 

(2)  The  general  superintendence,  direction  and  management  of  the  affairs  and  business  of  a 
corresponding  new  bank  shall  vest  in  a  Board  of  Directors  which  shall  be  entitled  to  exercise  all  such 
powers and do all such acts and things as the corresponding new bank isauthorised to exercise and do. 

(3) (a) As soon as may be after the appointed day, the Central Government shall, in consultation with 
the Reserve Bank, constitute the first Board of Directors of a corresponding new bank, consisting of not 
more  than  seven  persons,  to  be  appointed  by  the  Central  Government,  and  every  director  so  appointed 
shall hold office until the Board of Directors of such corresponding new bank is constituted in accordance 
with the scheme made under section 9: 

Provided that the Central Government may, if it is of opinion that it is necessary in the interests of the 
corresponding new bank so to do, remove a person from the membership of the first Board of Directors 
and appoint any other person in his place. 

(b) Every member of the first Board of Directors (not being an officer of the Central Government or 
of the Reserve Bank) shall receive such remuneration as is equal to the remuneration which a member of 
the Board of Directors of the existing bank was entitled to receive immediately before the commencement 
of this Act. 

(4) Until the first Board of Directors is appointed by the Central Government under sub-section (3), 
the  general  superintendence,  direction  and  management  of  the  affairs  and  business  of  a  corresponding 
new bank shall vest in a Custodian, who shall be the chief executive officer of that bank and may exercise 
all powers and do all acts and things as may be exercised or done by that bank. 

9 

 
(5) The Chairman of an existing bank holding office as such immediately before the commencement 
of this Act, shall be the Custodian of the corresponding new bank and shall receive the same emoluments 
as he was receiving immediately before such commencement: 

Provided that the Central Government may, if the Chairman of an existing bank declines to become, 
or to continue to function as, a Custodian of the corresponding new bank, or, if it is of opinion that it is 
necessary  in  the  interests  of  the  corresponding  new  bank  so  to  do,  appoint  any  other  person  as  the 
Custodian of a corresponding new bank and the Custodian so appointed shall receive such emoluments as 
the Central Government may specify in this behalf. 

(6) The Custodian shall hold office during the pleasure of the Central Government. 

8. Corresponding new banks to be guided by the directions of the Central Government.—Every 
corresponding new bank shall, in the discharge of its functions, be guided by such directions in regard to 
matters  of  policy  involving  public  interest  as  the  Central  Government  may,  after  consultation  with  the 
Governor of the Reserve Bank, give. 

9.  Power  of  Central  Government  to  make  scheme.—(1)  The  Central  Government  may,  after 

consultation with the Reserve Bank, make a scheme for carrying out the provisions of this Act. 

(2) In particular, and without prejudice to the generality of the foregoing power, the said scheme may 

provide for all or any of the following matters, namely:— 

(a) the capital structure of the corresponding new bank 1***. 

(b) the constitution of the Board of Directors, by whatever name called, of the corresponding new 
bank  and  all  such  matters  in  connection  therewith  or  incidental  thereto  as  the  Central  Government 
may consider to be necessary or expedient; 

(c)  the  reconstitution  of  any  corresponding  new  bank  into  two  or  more  corporations,  the 
amalgamation  of  any  corresponding  new  bank  with  any  other  corresponding  new  bank  or  with 
another  banking  institution,  the  transfer  of  the  whole  or  any  part  of  the  undertaking  of  a 
2[corresponding new bank to any other corresponding new bank or banking institution] or the transfer 
of the whole or any part of the undertaking of any other banking institution to a corresponding new 
bank; 

3[(ca)  the  manner  in  which  the  excess  number  of  directors  shall  retire  under  second  proviso  to 

clause (i) of sub-section (3);] 

(d) such incidental, consequential and supplemental matters as may be necessary to carry out the 

provisions of this Act. 
4[(3)  Every  Board  of  Directors  of  a  corresponding  new  bank  constituted  under  any  scheme  made 

under sub-section (1), shall include— 

5[(a)  not  more  than  five  whole-time  directors  to  be  appointed  by  the  Central  Government  after 

consultation with the Reserve Bank: 

Provided  that  the  Central  Government,  may,  after  consultation  with  the  Reserve  Bank,  by 
notification  published  in  the  Official  Gazette,  post  a  whole-time  director  so  appointed  to  any  other 
corresponding new bank. 

Explanation. — For the purposes of this clause, the expression “corresponding new bank” shall 
include a “corresponding new bank” as defined in clause (b) of section 2 of the Banking Companies 
(Acquisition and Transfer of Undertakings) Act, 1980;] 

 (b)  one  Director  who  is  an  official  of  the  Central  Government  to  be  nominated  by  the  

Central Government: 

1. Certain words omitted by Act 37 of 1994, s. 6 (w.e.f. 3-4-1995). 
2. Subs. by Act 66 of 1988, s. 31, for “corresponding new bank to any other banking institution” (w.e.f. 30-12-1988). 
3. Ins. by Act 45 of 2006, s. 3 (w.e.f. 16-10-2006). 
4. Subs. by Act 37 of 1994, s. 6, for sub-section (3) (w.e.f. 3-4-1995). 
5. Subs. by Act 23 of 2019, s. 148, for clause (a) (w.e.f. 9-8-2019). 

10 

 
                                                           
Provided that no such Director shall be a Director of any other corresponding new bank. 

Explanation.—For the purposes of this clause, the expression “corresponding new bank” shall include 
a corresponding new bank within the meaning of the Banking  Companies (Acquisition and Transfer of 
Undertakings) Act, 1980 (40 of 1980); 

1[(c) one director, possessing necessary expertise and experience in matters relating to regulation 
or  supervision  of  commercial  banks,  to  be  nominated  by  the  Central  Government  on  the 
recommendation of the Reserve Bank;] 

Explanation.—For  the  purpose  of  this  clause,  “an  officer  of  the  Reserve  Bank”  includes  an 
officer of the Reserve Bank who is deputed by that bank under section 54AA of the Reserve Bank of 
India Act, 1934 (2 of 1934) to any institution referred to therein; 

* 

2* 
* 
(e)  one  Director,  from  among  such  of  the  employees  of  the  corresponding  new  bank  who  are 
workmen  under  clause  (s)  of  section  2  of  the  Industrial  Disputes  Act,  1947  (14  of  1947),  to  be 
nominated by the Central Government in such manner as may be specified in a scheme made under 
this section; 

* 

* 

(f) one Director, from among the employees of the corresponding new bank who are not workmen 
under clause(s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947), to be nominated by the 
Central Government after consultation with the Reserve Bank; 

(g)  one  Director  who  has  been  a  Chartered  Accountant  for  not  less  than  fifteen  years  to  be 

nominated by the Central Government after consultation with the Reserve Bank; 

(h)  subject  to  the  provisions  of  clause  (i),  not  more  than  six  directors  to  be  nominated  by  the 

Central Government; 

3[(i) where the capital issued under clause (c) of sub-section (2B) of section 3 is— 
(I) not more than sixteen per cent.of the total paid-up capital, one director; 
(II)  more  than  sixteen  per  cent.  but  not  more  than  thirty-two  per  cent.  of  the  total  paid-up 

capital, two directors; 

(III) more than thirty-two per cent. of the total paid-up capital, three directors, 

to be elected by the shareholders, other than the Central Government, from amongst themselves: 

Provided that on the assumption of charge after election of any such director under this clause, 
equal number of directors nominated under clause (h) shall retire in such manner as may be specified 
in the scheme: 

Provided further that in case the number of directors elected, on or before the commencement of 
the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws 
(Amendment) Act, 2006 (45 of 2006), in a corresponding new bank exceed the number of directors 
specified  in  sub-clause  (I)  or  sub-clause  (II)  or  sub-clause  (III),  as  the  case  may  be,  such  excess 
number  of  directors  elected  before  such  commencement  shall  retire  in  such  manner  as  may  be 
specified  in  the  scheme  and  such  directors  shall  not  be  entitled  to  claim  any  compensation  for  the 
premature retirement of their term of office.] 
(3A)  Thedirectors  to  be  nominated  under  clause  (h)  or  to  be  elected  under  clause  (i)  of  

sub-section (3) shall— 

(A)  have  special  knowledge  or  practical  experience  in  respect  of  one  or  more  of  the 

followingMatters, namely:— 

(i) agricultural and rural economy, 
(ii) banking, 
(iii) co-operation, 

1. Subs. by Act 45 of 2006, s. 3, for clause (c) (w.e.f. 16-10-2006). 
2. Clause (d) omitted by s. 3, ibid. (w.e.f. 16-10-2006). 
3. Subs. by s. 3, ibid., for clause (i) (w.e.f. 16-10-2006). 

11 

 
 
 
 
 
 
 
 
                                                           
(iv) economics, 

(v) finance, 

(vi) law, 

(vii) small scale industry, 

(viii) any other matter the special knowledge of, and practical experience in, which would, in 

the opinion of the Reserve Bank, be useful to the corresponding new bank; 

(B) represent the interests of depositors; or 

(C) represent the interest of farmers, workers and artisans. 

1[(3AA) Without prejudice to the provisions of sub-section (3A) and notwithstanding anything to the 
contrary contained in this Act or in any other law for the time being in force, no person shall be eligible to 
be elected as director under clause (i) of sub-section (3) unless he is a person having fit and proper status 
based upon track record, integrity and such other criteria as the Reserve Bank may notify from time to 
time in this regard. 

(3AB)  The  Reserve  Bank  may  also  specify  in  the  notification  issued  under  sub-section  (3AA),  the 
authority  to  determine  the  fit  and  proper  status,  the manner  of  such  determination,  the  procedure  to  be 
followed  for  such  determination  and  such  other  matters  as  may  be  considered  necessary  or  incidental 
thereto;] 

(3B) Where the Reserve Bank is of the opinion that any director of a corresponding new Bank elected 
under  clause  (i)  of  sub-section  (3)  does  not  fulfil  the  requirements  of2[sub-sections  (3A)  and  (3AA)]  it 
may, after giving to such director and the bank a reasonable opportunity of being heard, by order, remove 
such  director  and  on  such  removal,  the  Board  of  Directors  shall  co-opt  any  other  person  fulfilling  the 
requirements  of2[sub-sections  (3A)  and  (3AA)]  as  a  director  in  place  of  the  person  so  removed  till  a 
director  is  duly  elected  by  the  shareholders  of  the  corresponding  new  bank  in  the  next  annual  general 
meeting and the person so co-opted shall be deemed to have been duly elected by the shareholders of the 
corresponding new bank as a director.] 

(4) The Central Government may, after consultation with the Reserve Bank, make a scheme to amend 

or vary any scheme made under sub-section (1). 

3[(5) On and from the date of coming into operation of a scheme made under this section with respect 
to any of the matters referred to in clause (c) of sub-section (2) or any matters incidental, consequential 
and supplemental thereto,— 

(a)  the  scheme  shall  be  binding  on  the  corresponding  new  bank  or  corporations  or  banking 
institutions,  and  also  on  the  members,  if  any,  the  depositors,  and  other  creditors  and  employees  of 
each  of  them  and  on  any  other  persons  having  any  right  or  liability  in  relation  to  any  of  them 
including  the  trustees  or  other  persons,  managing  or  in  any  other  manner  connected  with,  any 
provident fund or other fund maintained by any of them; 

(b) the properties and assets of the corresponding new bank, or as the case may be, of the banking 
institution shall, by virtue of and to the extent provided in the scheme, stand transferred to, and vested 
in, and the liabilities of the corresponding new bank, or, as the case may be, of the banking institution 
shall,  by  virtue  of,  and  to  the  extent  provided  in  the  scheme,  stand  transferred  to,  and  become  the 
liabilities of, the corporation or corporations brought into existence by reconstitution of the banking 
institution or the corresponding new bank, as the case may be. 

4[Explanation I].—In this section, “banking institution” means a banking company and includes 

the State Bank of India or a subsidiary bank]. 

1. Ins. by Act 45 of 2006, s. 3 (w.e.f. 16-10-2006).  
2. Subs. by s. 3, ibid., for “sub-section (3A)” (w.e.f. 16-10-2006). 
3. Ins. by Act 1 of 1984, s. 66 (w.e.f. 15-2-1984). 
4. Explanation numbered as Explanation I thereof by Act 66 of 1988, s. 31 (w.e.f. 30-12-1988). 

12 

 
                                                           
1[Explanation  II.—For  the  purposes  of  this  section,  the  expression  “corresponding  new  bank” 
shall include a corresponding new bank within the meaning of the Banking Companies (Acquisition 
and Transfer of Undertakings) Act, 1980 (40 of 1980)]. 
2[(6)] Every scheme made by the Central Government under this Act shall be laid, 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 
3[which may be comprised in one session or in two or more successive sessions, and if, before the expiry 
of the session immediately following the session or the successive sessions aforesaid], both Houses agree 
in making any modification in the scheme or both Houses agree that the scheme should not be made, the 
scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, 
however, that any such modification or annulment shall be without prejudice to the validity of anything 
previously done under that scheme. 

4[9A. Power  of  Reserve Bank  to  appoint  additional  director.—(1)  If  the  Reserve  Bank  is  of  the 
opinion  that  in  the  interest  of  banking  policy  or  in  the  public  interest  or  in  the  interests  of  the 
corresponding new bank or its depositors, it is necessary so to do, it may, from time to time, by order in 
writing appoint, with effect from such date as may be specified in the order, one or more persons to hold 
office as additional directors of the corresponding new bank. 

(2) Any person appointed as an additional director in pursuance of this section— 

(a) shall hold office during the pleasure of the Reserve Bank and subject thereto for a period not 
exceeding three years or such further periods not exceeding three years at a time as the Reserve Bank 
may specify; 

(b) shall not incur any obligation or liability by reason only of his being a director or for anything 
done  or  omitted  to  be  done  in  good  faith  in  the  execution  of  the  duties  of  his  office  or  in  relation 
thereto; and 

(c) shall not be required to hold qualification shares in the corresponding new bank. 

(3) For the purpose of reckoning any proportion of the total number of directors of the corresponding 

new bank, any additional director appointed under this section shall not be taken into account.] 

CHAPTER V 
MISCELLANEOUS 

10. Closure of accounts and disposal of profits.—(1) Every corresponding new bank shall cause its 
books  to  be closed  and  balanced  on  the  31st  day  of December  5[or  such  other  date in  each  year as the 
Central  Government  may  by  notification  in  the  Official  Gazette,  specify]  and  shall  appoint,  with  the 
previous approval of the Reserve Bank, and auditors for the audit of its accounts: 

6[Provided  that  with  a  view  to  facilitating  the  transition  from  one  period  of  accounting  to  another 
period  of  accounting  under  this  sub-section,  the  Central  Government  may,  by  order  published  in  the 
Official  Gazette,  make  such  provisions  as  it  considers  necessary  or  expedient  for  the  closing  and 
balancing of, or for other matters relating to the books in respect of the concerned years.] 

(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  (1  of  1956),  and  shall  receive  such 
remuneration as the Reserve Bank may fix in consultation with the Central Government. 

(3)  Every  auditor  shall  be  supplied  with  a  copy  of  the  annual  balance-sheet  and  profit  and  loss 
account and a list of all books kept by the corresponding new bank, and it shall be the duty of the auditor 

1. Ins. by Act 66 of 1988, s. 31 (w.e.f. 30-12-1988). 
2. Sub-section (5) re-numbered as sub-section (6) thereof by Act 1 of 1984, s. 66 (w.e.f. 15-2-1984). 
3. Subs. by s. 66, ibid., for certain words (w.e.f. 15-2-1984). 
4. Ins. by Act 45 of 2006, s. 4 (w.e.f. 16-10-2006). 
5. Subs. by Act 66 of 1988, s. 32, for “of each year” (w.e.f. 30-12-1988). 
6. Ins. by s. 32, ibid. (w.e.f. 30-12-1988). 

13 

 
                                                           
to examine the balance-sheet and profit and loss account with the accounts and vouchers relating thereto, 
and in the performance of his duties, the auditor— 

(a) shall have, at all reasonable times, access to the books, accounts and other documents of the 

corresponding new bank, 

(b) may, at the expense of the corresponding new bank, employ accountants or other persons to 

assist him in investigating such accounts, and 

(c) may, in relation to such accounts, examine the Custodian or any officer or employee of the 

corresponding new bank. 

(4) Every auditor of a corresponding new bank shall make a report to the Central Government upon 

the annual balance-sheet and accounts and in every such report shall state— 

(a)  whether,  in  his  opinion,  the  balance-sheet  is  a  full  and  fair  balance-sheet  containing  all  the 
necessary particulars and is properly drawn up so as to exhibit a true and fair view of the affairs of the 
corresponding new bank, and in case he had called for any explanation or information, whether it has 
been given and whether it is satisfactory; 

(b) whether or not the transactions of the corresponding new bank, which have come to his notice, 

have been within the powers of that bank; 

(c) whether or not the returns received from the offices and branches of the corresponding new 

bank have been found adequate for the purpose of his audit; 

(d)  whether  the  profit  and  loss  account  shows  a  true  balance  of  profit  or  loss  for  the  period 

covered by such account; and 

(e)  any  other  matter  which  he  considers  should  be  brought  to  the  notice  of  the  Central 

Government. 

1[Explanation I.—For the purposes of this Act— 

(a) the balance-sheet shall not be treated as not disclosing a true and fair view of the affairs of 

the corresponding new bank, and 

(b) the profit and loss account shall not be treated as not showing a true balance of profit or 

loss for the period covered by such account, 

merely by reason of the fact that the balance-sheet or, as the case may be, the profit and loss account 
does  not  disclose  any  matters  which  are  by  the  provisions  of  the  Banking  Regulation  Act,  1949 
(10  of  1949),  read  with  the  relevant  provisions  of  this  Act  or  any  other  Act,  not  required  to  be 
disclosed. 

Explanation II.—For the purposes of this Act the accounts of the corresponding new bank shall 
not be deemed as having not been properly drawn up on the ground merely that they do not disclose 
certain matters if— 

(i)  those  matters  are  such  as  the  corresponding  new  bank  is,  by  virtue  of  any  provision 
contained in the Banking Regulation Act, 1949 (10 of 1949), read with the relevant provisions of 
this Act, or any other Act, not required to disclose; and 

(ii)  the  provisions  referred  to  in  clause  (i)  are  specified  in  the  balance-sheet  and  profit  and 

loss account of the corresponding new bank or in the auditor’s report.] 

(5) The report of the auditor shall be verified, signed and transmitted to the Central Government. 

(6) The auditor shall also forward a copy of the audit report to the corresponding new bank and to the 

Reserve Bank. 

(7) After making provision for bad and doubtful debts, depreciation in assets, contributions to staff 
and superannuation funds and all other matters for which provision is necessary under any law, or which 

1. Ins. by Act 1 of 1984, s. 67 (w.e.f. 15-2-1984). 

14 

 
                                                           
are usually provided for by banking companies, a corresponding new bank  1[may, out of its net profits, 
declare a dividend and retain the surplus, if any]. 

2[(7A) Every corresponding new bank shall furnish to the Central Government  3[and to the Reserve 
Bank] the annual balance-sheet, the profit and loss account, and the auditor’s report and a report by its 
Board of directors on the working and activities of the bank during the period covered by the accounts.] 

(8)  The  Central  Government  shall  cause  every  auditor’s  report  and  report  on  the  working  and 
activities of each corresponding new bank to be laid 4[as soon as may be after they are received before 
each House of Parliament 5***]. 

 2[(9)  Without  prejudice  to  the  foregoing  provisions,  the  Central  Government  may,  at  any  time, 
appoint such number of auditors as it thinks fit to examine and report on the accounts of a corresponding 
new bank and the auditors so appointed shall have all the rights, privileges and authority in relation to the 
audit  of  the  accounts  of  the  corresponding  new  bank  which  an  auditor  appointed  by  the  corresponding 
new bank has under this section.] 

6[10A.Annual general meeting.—(1) A general meeting (in this Act referred to as an annual general 
issued  capital  under  clause  (c)  of  
meeting)  of  every  corresponding  new  bank  which  has 
sub-section (2B) of section 3 shall be held at the place of the head office of the bank in each year at such 
time as shall from time to time be specified by the Board of Directors: 

Providedthat such annual general meeting shall be held before the expiry of six weeks from the date 
on  which  the  balance  sheet,  together  with  the  profit  and  loss  account  and  auditor’s  report  is  under  
sub-section (7A) of section 10, forwarded to the Central Government or to the Reserve Bank whichever 
date is earlier. 

(2) The shareholders present at an annual general meeting 7[shall be entitled to discuss, approve and 
adopt] the balance-sheet and the profit and loss account of the corresponding new bank made up to the 
previous  31st  day  of  March,  the  report  of  the  Board  of  Directors  on  the  working  and  activities  of  the 
corresponding  new  bank  for  the  period  covered  by  the  accounts  and  the  auditor’s  report  on  the  
balance-sheet and accounts.] 

8[(3) Nothing contained in this section shall apply during the period for which the Board of Directors 

of a corresponding new bank had been superseded under sub-section (1) of section 18A: 

Provided that the Administrator may, if he considers it appropriate in the interest of the corresponding 
new bank whose Board of Directors had been superseded, call annual general meeting in accordance with 
the provisions of this section.] 

9[10B. Transfer of unpaid or unclaimed dividend to Unpaid Dividend Account.—(1) Where, after 
the commencement of the Banking Companies (Acquisition and Transfer of Undertakings) and Financial 
Institutions Laws (Amendment) Act, 2006 (45 of 2006), a dividend has been declared by a corresponding 
new bank but has not been paid or claimed within thirty days from the date of declaration, to, or by, any 
shareholder entitled to the payment of the dividend, the corresponding new bank shall, within seven days 
from  the  date  of  the  expiry  of  such  period  of  thirty  days,  transfer  the  total  amount  of  dividend  which 
remains  unpaid  or  unclaimed  within  the  said  period  of  thirty  days,  to  a  special  account  to  be  called 
“Unpaid Dividend Account of ... (the name of the corresponding new bank). 

Explanation.—In  this  sub-section,  the  expression  “dividend  which  remains  unpaid”  means  any 
dividend the warrant in respect thereof has not been encashed or which has otherwise not been paid or 
claimed. 

1. Subs. by Act 37 of 1994, s. 7, for certain words (w.e.f. 15-7-1994). 
2. Ins. by Act 1 of 1984, s. 67 (w.e.f. 15-2-1984). 
3. Ins. by Act 37 of 1994, s. 7 (w.e.f. 15-7-1994). 
4. Subs. by Act 1 of 1984, s. 67, for certain words (w.e.f. 15-2-1984). 
5. Certain words omitted by Act 81 of 1985, s. 9 (w.e.f. 1-5-1986). 
6. Ins. by Act 37 of 1994, s. 8 (w.e.f. 15-7-1994). 
7. Subs. by Act 45 of 2006, s. 5, for certain words (w.e.f. 16-10-2006). 
8. Ins. by s. 5, ibid. (w.e.f. 16-10-2006). 
9. Ins. by s. 6, ibid. (w.e.f. 16-10-2006). 

15 

 
 
                                                           
(2) Where the whole or any part of any dividend, declared by a corresponding new bank before the 
commencement  of  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings)  and  Financial 
Institutions  Laws  (Amendment)  Act,  2006(45  of  2006),  remains  unpaid  at  such  commencement,  the 
corresponding  new  bank  shall,  within  a  period  of  six  months  from  such  commencement,  transfer  such 
unpaid amount to the account referred to in sub-section (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 (1 of 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).] 

11.  Corresponding  new  bank  deemed  to  be  an  Indian  company.—For  the  purposes  of  the  
Income-tax  Act,  1961  (43  of  1961),  every  corresponding  new  bank  shall  be  deemed  to  be  an  Indian 
company and a company in which the public are substantially interested. 

12.  Removal  of  Chairman  from  office.—(1)  Every  person  holding  office, immediately  before the 
commencement  of  this  Act,  as  Chairman  of  an  existing  bank  shall,  if  he  becomes  Custodian  of  the 
corresponding new bank, be deemed, on such commencement, to have vacated office as such Chairman. 

(2) Save as otherwise provided in sub-section (1), every officer or other employee of an existing bank 
shall become, on the commencement of this Act, an officer or other employee, as the case may be, of the 
corresponding new bank and shall hold his office or service in that bank on the same terms and conditions 
and with the same rights to pension, gratuity and other matters as would have been admissible to him if 
the undertaking of the existing bank had not been transferred to and vested in the corresponding new bank 
and continue to do so unless and until his employment in the corresponding new bank is terminated or 
until his remuneration, terms or conditions are duly altered by the corresponding new bank. 

(3) For the persons who immediately before the commencement of this Act were the trustees for any 
pension,  provident,  gratuity  or  other  like  fund  constituted  for  the  officers  or  other  employees  of  an 
existing  bank,  there  shall  be  substituted  as  trustees  such  persons  as  the  Central  Government  may,  by 
general or special order, specify. 

(4) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any 
other law for the time being in force, the transfer of the services of any officer or other employee from an 
existing  bank  to  a  corresponding  new  bank  shall  not  entitle  such  officer  or  other  employee  to  any 
compensation  under  this  Act  or  any  other  law  for  the  time  being  in  force  and  no  such  claim  shall  be 
entertained by any court, tribunal or other authority. 

1[12A.  Bonus.—(1)  No  officer  or  other  employee  [other  than  an  employee  within  the  meaning  of 
clause (13) of section 2 of the Payment of Bonus Act, 1965 (21 of 1965)] of a corresponding new bank 
shall be entitled to be paid any bonus. 

(2) No employee of a corresponding new bank, being an employee within the meaning of clause (13) 
of section 2 of the Payment of Bonus Act, 1965 (21 of 1965), shall be entitled to be paid any bonus except 
in accordance with the provisions of that Act. 

(3) The provisions of this section shall have effect notwithstanding any judgment, decree or order of 
any  court,  tribunal or  other  authority  and notwithstanding  anything  contained in  any  other  provision  of 
this Act or in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force 
or any practice, usage or custom or any contract, agreement, settlement, award or other instrument.] 

13. Obligations as to fidelity and secrecy.—(1) Every corresponding new bank shall observe, except 
as  otherwise  required  by  law,  the  practices  and  usages  customary  among  bankers,  and,  in  particular,  it 
shall not divulge any information relating to or to the affairs of its constituents except in circumstances in 
which  it  is,  in  accordance  with  law  or  practices  and  usages  customary  among  bankers,  necessary  or 
appropriate for the corresponding new bank to divulge such information. 

1. Ins. by Act 64 of 1984, s. 4 (w.e.f. 11-9-1984). 

16 

 
                                                           
(2)  Every  director,  member  of  a  local  board  or  a  committee,  or  auditor,  adviser,  officer  or  other 
employee  of  a  corresponding  new  bank  shall,  before  entering  upon  his  duties,  make  a  declaration  of 
fidelity and secrecy in the form set out in the Third Schedule. 

(3) Every Custodian of a corresponding new bank shall, as soon as possible, make a declaration of 

fidelity and secrecy in the form set out in the Third Schedule. 

1[(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit 

Information Companies (Regulation) Act, 2005 (30 of 2005).] 

14.  Custodian  to  be  public  servant.—Every  Custodian  of  a  corresponding  new  bank  shall  be 

deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code (45 of 1860). 

15.  Certain  defects  not  to  invalidate  acts  or  proceedings.—(1)  All  acts  done  by  the  Custodian, 

acting in good faith, shall, notwithstanding any defect in his appointment or in the procedure, be valid. 

(2) No act or proceeding of any Board of Directors or a local board or committee of a corresponding 
new  bank  shall  be  invalid  merely  on  the  ground  of  the  existence  of  any  vacancy  in,  or  defect  in  the 
constitution of, such board or committee, as the case may be. 

(3)  All  acts  done  by  a  person  acting  in  good  faith  as  a  director  or  member  of  a  local  board  or 
committee  of  a  corresponding  new  bank  shall  be  valid,  notwithstanding  that  it  may  afterwards  be 
discovered that his appointment was invalid by reason of any defect or disqualification or had terminated 
by virtue of any provision contained in any law for the time being in force: 

Provided  that  nothing  in  this  section  shall  be  deemed  to  give  validity  to  any  act  by  a  director  or 
member of a local board or committee of a corresponding new bank after his appointment has been shown 
to the corresponding new bank to be invalid or to have terminated. 

16. Indemnity.—(1) Every Custodian of a corresponding new bank and every officer of the Central 
Government or of the Reserve Bank and every officer or other employee of a corresponding new bank, 
shall be indemnified by such bank against all losses and expenses incurred by him in or in relation to the 
discharge of his duties except such as have been caused by his own wilful act or default. 

(2)  A  director  or  member  of  a  local  board  or  committee  of  a  corresponding  new  bank  shall  not  be 
responsible for any loss or expense caused to such bank by the insufficiency or deficiency of the value of, 
or title to, any property or security acquired or taken on behalf of the corresponding new bank, or by the 
insolvency  or  wrongful  act  of  any  customer  or  debtor,  or  by  anything  done  in  or  in  relation  to  the 
execution of the duties of his office, unless such loss, expense, insufficiency or deficiency was due to any 
wilful act or default on the part of such director or member. 

2[16A. Arrangement with corresponding new bank on appointment of directors to prevail.—(1) 
Where  any  arrangement  entered  into  by  a  corresponding  new  bank  with  a  company  provides  for  the 
appointment by the corresponding new bank of one or more directors of such company, such provision 
and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding 
anything to the contrary contained in the Companies Act, 1956 (1 of 1956), or in any other law for the 
time being in force or in the memorandum, articles of association or any other instrument relating to the 
Company,  and  any  provision  regarding  share  qualification,  age  limit,  number  of  directorships,  removal 
from office of directors and such like conditions contained in any such law or instrument aforesaid, shall 
not apply to any director appointed by the corresponding new bank in pursuance of the arrangement as 
aforesaid. 

(2) Any director appointed as aforesaid shall— 

(a)  hold  office  during  the  pleasure  of  the  corresponding  new  bank  and  may  be  removed  or 

substituted by any person by order in writing of the corresponding new bank; 

1. Ins. by Act 30 of 2005, s. 34 and Sch. (w.e.f. 14-12-2006). 
2. Ins. by Act 1 of 1984, s. 68 (w.e.f. 15-2-1984). 

17 

 
                                                           
(b) not incur any obligation or liability by reason only of his being a director or for anything done 
or omitted to be done in good faith in the discharge of his duties as a director or anything in relation 
thereto; 

(c) not be liable to retirement by rotation and shall not be taken into account for computing the 

number of directors liable to such retirement.] 

17. References to existing banks on and from the commencement of this Act.—Any reference to 
any existing bank in any law, other than this Act, or in any contract or other instrument shall, in so far as 
it relates to the undertaking which has been transferred by section 4, be construed as a reference to the 
corresponding new bank. 

18.  Dissolution.—No  provision  of  law  relating  to  winding  up  of  corporations  shall  apply  to  a 
corresponding new bank and no corresponding new bank shall be placed in liquidation save by order of 
the Central Government and in such manner as it may direct. 

1[18A.  Supersession  of  Board  in  certain  cases.—(1)  Where  the  Central  Government,  on  the 
recommendation of the Reserve Bank, is satisfied that in the public interest or for preventing the affairs of 
any corresponding new bank being conducted in a manner detrimental to the interest of the depositors or 
the corresponding new bank or for securing the proper management of any corresponding new bank, it is 
necessary  so  to  do,  the  Central  Government  may,  for  reasons  to  be  recorded  in  writing,  by  order, 
supersede the Board of Directors of such corresponding new bank for a period not exceeding six months 
as may be specified in the order: 

Provided that the period of supersession of the Board of Directors may be extended from time to time, 

so, however, that the total period shall not exceed twelve months. 

(2)  The  Central  Government  may,  on  supersession  of  the  Board  of  Directors  of  the  corresponding 
new bank under sub-section (1), appoint, in consultation with the Reserve Bank, for such period as it may 
determine, an Administrator (not being an officer of the Central Government or a State Government) who 
has experience in law, finance, banking, economics or accountancy. 

(3)  The  Central  Government  may  issue  such  directions  to  the  Administrator  as  it  may  deem 

appropriate and the Administrator shall be bound to follow such directions. 

(4) Upon making the order of supersession of the Board of Directors of the corresponding new bank, 

notwithstanding anything contained in this Act,— 

(a) the chairman, managing directors and other directors shall, as from the date of supersession, 

vacate their offices as such; 

(b) all the powers, functions and duties which may, by or under the provisions of this Act or any 
other  law  for the time  being  in  force,  be exercised  and  discharged  by  or  on  behalf  of  the  Board  of 
Directors  of  such  corresponding  new  bank,  or  by  a  resolution  passed  in  general  meeting  of  such 
corresponding  new  bank,  shall,  until  the  Board  of  Directors  of  such  corresponding  new  bank  is 
reconstituted, be exercised and discharged by the Administrator appointed by the Central Government 
under sub-section (2): 

Provided that the power exercised by the Administrator shall be valid notwithstanding that such 

power is exercisable by a resolution passed in the general meeting of the corresponding new bank. 

(5) The Central Government may constitute, in consultation with the Reserve Bank, a committee of 
three or more persons who have experience in law, finance, banking, economics or accountancy to assist 
the Administrator in the discharge of his duties. 

(6) The committee shall meet at such times and places and observe such rules of procedure as may be 

specified by the Central Government. 

1. Ins. by Act 45 of 2006, s. 7 (w.e.f. 16-10-2006). 

18 

 
                                                           
(7)  The  salary  and  allowances  payable  to  the  Administrator  and  the  members  of  the  committee 
constituted  under  sub-section  (5)  by  the  Central  Government  shall  be  such  as  may  be  specified  by  the 
Central Government and be payable by the concerned corresponding new bank. 

(8)  On  and  before  the  expiration  of  two  months  before  expiry  of  the  period  of  supersession  of  the 
Board  of  Directors  as  specified  in  the  order  issued  under  sub-section  (1),  the  Administrator  of  the 
corresponding  new  bank,  shall  call  the  general  meeting  of  the  corresponding  new  bank  to  elect  new 
directors and reconstitute its Board of Directors. 

(9)  Notwithstanding  anything  contained  in  any  other  law  or  in  any  contract,  the  memorandum  or 
articles of association, no person shall be entitled to claim any compensation for the loss or termination of 
his office. 

(10)  The  Administrator  appointed  under  sub-section  (2)  shall  vacate  office  immediately  after  the 

Board of Directors of the corresponding new bank has been reconstituted.] 

19.  Power  to  make  regulations.—(1)  The  Board  of  Directors  of  a  corresponding  new  bank  may, 
after consultation with the Reserve Bank and with the previous sanction of the Central Government, 1[by 
notification in the Official Gazette,] make regulations, not inconsistent with the provisions of this Act or 
any scheme made thereunder, to provide for all matters for which provision is expedient for the purpose 
of giving effect to the provisions of this Act. 

(2) In particular, and without prejudice to the generality of the foregoing power, the regulations may 

provide for all or any of the following matters, namely:— 

(a) the powers, functions and duties of local boards and restrictions, conditions or limitations, if 
any,  subject  to  which  they  may  be  exercised  or  performed,  the  formation  and  constitution  of  local 
committees  and  committees  of  local  board  (including  the  number  of  members  of  any  such 
committee),  the  powers,  functions  and  duties  of  such  committees,  the  holding  of  meetings  of  local 
committees and committees, of local boards and the conduct of business thereat; 

(b) the manner in which the business of the local boards shall be transacted and the procedure in 

connection therewith; 

2[(ba)  the  nature  of  shares  of  the  corresponding  new  bank,  the  manner  in  which  and  the 
conditions subject to which shares may be held and transferred and generally all matters relating to 
the rights and duties of shareholders; 

(bb)  the  maintenance  of  register,  and  the  particulars  to  be  entered  in  the  register  in  addition  to 
those specified in sub-section (2F) of section 3, the safeguards to be observed in the maintenance of 
register on computer floppies or diskettes, inspection and closure of the register and all other matters 
connected therewith: 

(bc)  the  manner  in  which  general  meetings  shall  be  convened,  the  procedure  to  be  followed 

thereat and the manner in which voting rights may be exercised; 

(bd) the holding of meetings of shareholders and the business to be transacted thereat; 

(be) the manner in which notices may be served on behalf of the corresponding new bank upon 

shareholders or other persons; 

(bf) the manner in which the directors nominated under clause (h) of sub-section (3) of section 9 

shall retire;] 

(c) the delegation of powers and functions of the board of directors of a corresponding new bank 

to the general manager, director, officer or other employee of that bank; 

1. Ins. by Act 4 of 1986, s. 2 and Sch. (w.e.f. 5-5-1986). 
2. Ins. by Act 37 of 1994, s. 9 (w.e.f. 15-7-1994). 

19 

 
                                                           
(d)  the  conditions  or  limitations  subject  to  which  the  corresponding  new  bank  may  appoint 
advisers,  officers  or  other  employees  and  fix  their  remuneration  and  other  terms  and  conditions  of 
service; 

(e)  the  duties  and  conduct  of  advisers,  officers  or  other  employees  of  the  corresponding  new 

bank; 

(f)  the  establishment  and  maintenance  of  superannuation,  pension,  provident  or  other  funds  for 
the benefit of officers or other employees of the corresponding new bank or of the dependants of such 
officers  or  other  employees  and  the  granting  of  superannuation  allowances,  annuities  and  pensions 
payable out of such funds; 

(g) the conduct and defence of legal proceedings by or against the corresponding new bank and 

the manner of signing pleadings; 

(h) the provision of a seal for the corresponding new bank and the manner and effect of its use; 

(i)  the  form  and  manner  in  which  contracts  binding  on  the  corresponding  new  bank  may  be 

executed; 

(j) the conditions and the requirements subject to which loans or advances may be made or bills 

may be discounted or purchased by the corresponding new bank; 

(k)  the  persons  or  authorities  who  shall  administer  any  pension,  provident  or  other  fund 
constituted  for  the  benefit  of  officers  or  other  employees  of  the  corresponding  new  bank  or  their 
dependants; 

(l)  the  preparation  and  submission  of  statements  of  programmes  of  activities  and  financial 
statements of the corresponding new bank and the period for which and the time within which such 
statements and estimates are to be prepared and submitted; and 

(m) generally for the efficient conduct of the affairs of the corresponding new bank. 

(3) Until any regulation is made under sub-section (1), the articles of association of the existing bank 
and  every  regulation,  rule,  bye-law  or  order  made  by  the  existing  bank  shall,  if  in  force  at  the 
commencement of this Act, be deemed to be the regulations made under sub-section (1) and shall have 
effect accordingly and any reference therein to any authority of the existing bank shall be deemed to be a 
reference to the corresponding authority of the corresponding new bank and until any such corresponding 
authority is constituted under this Act, shall be deemed to refer to the Custodian. 

1[(4)  Every  regulation  shall,  as  soon  as  may  be  after  it  is  made  under  this  Act  by  the  Board  of 
directors,  of a  corresponding  new  bank,  be  forwarded  to the  Central  Government  and  that  Government 
shall cause a copy of the same to be laid before each House of Parliament, while it is in session, for a total 
period of thirty days which may be comprised in one session or in two or more successive sessions, and 
if, before the expiry of the session immediately following the session or the successive sessions aforesaid, 
both Houses agree in making any modification in the regulation or both Houses agree that the regulation 
should  not  be  made,  the regulation  shall  thereafter  have  effect  only  in  such  modified  form  or  be  of  no 
effect,  as  the  case  may  be;  so,  however,  that  any  such  modification  or  annulment  shall  be  without 
prejudice to the validity of anything previously done under that regulation.] 

20. Amendment of certain enactments.—(1) In the Banking Regulation Act, 1949 (10 of 1949),— 

(a) in section 34A, in sub-section (3), for the words “and any subsidiary bank”, the words, figures 
and  brackets  “a  corresponding  new  bank  constituted  under  section  3  of  the  Banking  Companies 
(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and any subsidiary bank” shall be 
substituted; 

(b)  in  section  36AD,  in  sub-section  (3),  for  the  words  “and  any  subsidiary  bank”,  the  words, 
figures  and  brackets  “a  corresponding  new  bank  constituted  under  section  3  of  the  Banking 

1. Ins. by Act 1 of 1984, s. 69 (w.e.f. 15-2-1984). 

20 

 
                                                           
Companies  (Acquisition  and  Transfer  of  Undertakings)  Act,  1970  (5  of  1970),  and  any  subsidiary 
bank” shall be substituted; 

(c)  in  section  51,  for  the  words  “or  any  other  banking  institution  notified  by  the  Central 
Government  in  this  behalf”,  the  words,  figures  and  brackets  “or  any  corresponding  new  bank 
constituted  under  section  3  of  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings) 
Act,  1970  (5  of  1970),  or  any  other  banking  institution  notified  by  the  Central  Government  in  this 
behalf” shall be substituted; 

(d) in the Fifth Schedule, in Part I of paragraph 1, in clause (e), the Explanations shall be deemed 

never to have been inserted. 

(2) In the Industrial Disputes Act, 1947 (14 of 1947), in section 2, in clause (bb), for the words “and 
any  subsidiary  bank”,  the  words,  figures  and  brackets  “a  corresponding  new  bank  constituted  under 
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), 
and any subsidiary bank” shall be substituted. 

(3)  In  the  Banking  Companies  (Legal  Practitioners,  Clients,  Accounts)  Act,  1949  (46  of  1949),  in 
section  2,  in  clause  (a),  for  the  words  “and  any  subsidiary  bank”,  the  words,  figures  and  brackets  “a 
corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer 
of Undertakings) Act, 1970 (5 of 1970), and any subsidiary bank” shall be substituted. 

(4) In the Deposit Insurance Corporation Act, 1961 (47 of 1961),— 

(a) in section 2,— 

(i) after clause (e), the following clause shall be inserted, namely:— 

(ee)  “corresponding  new  bank”  means  a  corresponding  new  bank  constituted  under 
section  3  of  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings)  Act,  1970  
(5 of 1970); 

(ii) in clause (g),— 

(a)  for  the  words  “or  a  banking  company”,  the  words  “a  corresponding  new  bank  or  a 

banking company”, and 

(b) for the words “with a banking company”, the words “with a corresponding new bank 

or with a banking company”, 

shall be substituted; 

(iii)  in  clause  (i),  after  the  words  “banking  company”,  the  words  “or  a  corresponding  new 

bank” shall be inserted; 

(b)  section  13  shall  be  re-numbered  as  sub-section  (1)  thereof  and  after  sub-section  (1)  as  so  

re-numbered, the following sub-section shall be inserted, namely:— 

“(2)  The  provisions  of  clauses  (a),  (b),  (c),  (d)  and  (h)  of  sub-section  (1)  shall  apply  to  a 

corresponding new bank as they apply to a banking company.” 

(5) In the State Agricultural Credit Corporations Act, 1968 (60 of 1968),— 

(a) in section 2, after clause (i), the following clause shall be inserted, namely:— 

(ii) “corresponding new bank” means a corresponding new bank constituted under section 3 

of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970)'; 

(b)  after  the  words  “subsidiary  banks”  or  “subsidiary  bank”,  as  the  case  may  be,  occurring  in 
clause (d) of sub-section (3) of section 5, in clause (b) of section 9 and in the proviso to section 18, 
the  words  “corresponding  new  banks”  or  “corresponding  new  bank”,  as  the  case  may  be,  shall  be 
inserted. 

21. Repeal and savings.—(1) The Banking Companies (Acquisition and Transfer of Undertakings) 

Ordinance, 1970 (Ord. 3 of 1970), is hereby repealed. 

21 

 
(2) Notwithstanding such repeal and notwithstanding any judgment, decree or order of any court or 

tribunal,— 

(a) any action taken, or purported to have been taken, or anything done, or purported to have been 
done, between the 19th day of July, 1969, and the 10th day of February, 1970, by any corresponding 
new bank purported to have been constituted under the Banking Companies (Acquisition and Transfer 
of Undertakings) Ordinance, 1969 (8 of 1969), or the Banking Companies (Acquisition and Transfer 
of Undertakings) Act, 1969 (22 of 1969), or by any person purporting to act on behalf of such bank 
and any right, obligation or liability acquired or incurred, between the said dates, by or on behalf of 
such corresponding new bank shall be deemed to have been taken, done, acquired or incurred under 
the provisions of this Act by or on behalf of the corresponding new bank constituted thereunder; 

(b) any action taken, or purported to have been taken, or anything done, or purported to have been 
done, between the 10th day of February, 1970, and the appointed day, by an existing bank or by any 
person  acting  on  behalf  of  such  bank,  and  any  right,  obligation  or  liability  acquired  or  incurred, 
between  the  said  dates,  by  or  on  behalf  of  such existing  bank  shall be  deemed  to  have  been taken, 
done, acquired or incurred under the provisions of this Act by or on behalf of the corresponding new 
bank constituted thereunder; 

(c) anything done or any action taken, including any order made, notification issued or directions 
given  under  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings)  Ordinance,  1970  
(3 of 1970), shall be deemed to have been done, taken, made, issued or given, as the case may be, 
under the corresponding provisions of this Act. 

(3) Any suit, appeal or other proceeding of whatever nature instituted on or after the 19th day of July, 
1969,  by  or  against  a  corresponding  new  bank  purported  to  have  been  constituted  by  the  Banking 
Companies  (Acquisition  and  Transfer  of  Undertakings)  Ordinance,  1969  (8  of  1969),  or  the  Banking 
Companies  (Acquisition  and  Transfer  of  Undertakings)  Act,  1969  (22  of  1969),  shall  not  abate,  be 
discontinued, or be, in any way, prejudicially affected by reason of the expiry of the said Ordinance or the 
invalidation  of  the  said  Act,  as  the  case  may  be,  but  such  suit,  appeal  or  other  proceeding  may  be  
continued, prosecuted and enforced by or against the corresponding new bank as if such suit, appeal or 
other proceeding had been instituted by or against the corresponding new bank constituted under this Act. 

22 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
THE FIRST SCHEDULE 

(See sections 2, 3 and 4) 

Existing bank 

Column 1 

Corresponding new bank 

Column 2 

The Central Bank of India Limited 

                    Central Bank of India. 

The Bank of India Limited 

                    Bank of India. 

The Punjab National Bank Limited 

                     Punjab National Bank 

The Bank of Baroda Limited 

The United Commercial Bank Limited 

Canara Bank Limited 

United Bank of India Limited 

Dena Bank Limited 

Syndicate Bank Limited 

The Union Bank of India Limited 

Allahabad Bank Limited 

Existing bank 

Column 1 

The Indian Bank Limited 

The Bank of Maharashtra Limited 

The Indian Overseas Bank Limited 

Bank of Baorda. 
1[UCO Bank.] 

Canara Bank. 

United Bank of India. 

Dena Bank. 

Syndicate Bank. 

Union Bank of India 

Allahabad Bank 

Corresponding new bank 

Column 2 

Indian Bank. 

Bank of Maharashtra. 

Indian Overseas Bank. 

1. Subs. by Act 81 of 1985, s. 10, for “United Commercial Bank” (w.e.f. 30-12-1985). 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
THE SECOND SCHEDULE 

(See section 6) 

Name of existing bank 

The Central Bank of India Limited.. 

The Bank of India Limited.. 

The Punjab National Bank Limited .. 

The Bank of Baroda Limited .. 

The United Commercial Bank Limited .. 

Canara Bank Limited .. 

United Bank of India Limited .. 

Dena Bank Limited .. 

Syndicate Bank Limited .. 

The Union Bank of India Limited .. 

Allahabad Bank Limited .. 

The Indian Bank Limited .. 

The Bank of Maharashtra Limited .. 

The Indian Overseas Bank Limited .. 

Amount of compensation 
(in lakhs of rupees) 

1750 

1470 

1020 

840 

830 

360 

420 

360 

360 

310 

310 

230 

230 

250 

24 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
THE THIRD SCHEDULE 

[See sub-sections (2) and (3) of section 13] 

DECLARATION OF FIDELITY AND SECRECY 

I, ----------, do hereby declare that I will faithfully, truly and to the best of my skill and ability execute 
and perform the duties required of me as Custodian, Director, member of Local Board, member of Local 
Committee, auditor, adviser, officer or other employee (as the case may be) of the * 
and which properly relate to the office or position in the said*  
held by me. 

I further declare that I will not communicate or allow to be communicated to any person not legally 

to 

of 

the 

any 

affairs 

entitled thereto any information relating to the affairs of the *  
or 
;nor  will 
having 
I  allow  any  such  person  to  inspect  or  have  access  to  any  books  or  documents  belonging  to  or  in 
possession of the* 
and relating to the business of the*  
or to the business of any person having any dealing with the*  
* Name of corresponding new bank to be filled in. 

dealing  with 

person 

the* 

any 

25 

 
