(i) Every corresponding new bank shall observe, except es 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 practice and usage customary among bankers-, necessary or appropriate for the corresponding new bank to divulge such information.
- (2) Every Custodian of a corresponding new bank shall be deemed to be a public servant for the purpose of Chapter IX of the Indian Penal Code.
17. All acts done by the Custodian, acting in good faith, shall, notwithstanding any defect in his appointment or in the procedure, be valid.
18. Every Custodian of a corresponding new bank and every ofirer of the Central Government and of the Reserve 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 has been caused by his own wilful act or default.
19. Any reference to any existing bank in any law, other than this Ordinance, or in any contract or other instrument shall be construed as a reference to the corresponding new bank in relation to it.
14 of 1S47.
40 of 1860.
Rernoval front office of directors, etc.
Obligations as to fidelity and secrecy.
Custodian to be public servant.
Certain defects not to invalidate acts or proceedings- Indemnity.
References to existing banks on and from the commencement of this Ordinance.
324 tttft GAZfcTTtf Ot1 INDIA EXTRAORDINARY [PART 11—
20. Notwithstanding anything contained in any other law for the time being in force, an existing bank shall, on such date as the Central Government may, by notification in the Official Gazette, specify in this ber halC, stand dissolved.
21. (I) The Central Government may, for the purpose of carrying out the provisions of this Ordinance, make such rules as it may think fit.
(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for all or any of the following matters, namely:—
(a) the manner in which the business of the Advisory Board shall be transacted and the procedure to be followed at the meetings thereof;
(b) fees and allowances which may be paid to members-of-the Advisory Board for attending any meetings of the Board or of any Committee that may be constituted by the Board;
(c) the formation of any Committee whether of the Advisory BofVrd or of the corresponding new bank and the delegation of powers and functions of such Committees;
(d) any other matter which is required to be, or may be, prescribed.
(3) Every rule made by the Central Government under this Ordinance 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 which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in t,uch 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 rule.
22. In the Banking Regulation Act, 1949,—
(a) in sub-section (?) of section 34A, for the words "any subsidiary bank", the words "a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969, and any subsidiary bank" shall be substituted;
(b) in sub-section (3) of section 36AD, for the (words "any subsidiary bank", the words "a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings') Ordinance, 1969, 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 "or any corresponding new bank constituted under section 3 of the Dissolution oi existing banks.
Powef to make rules.
Amendment of the Banking Regulation Act, 1949.
Idlofl94B Six;. 1] THE GAZETTE OF INDIA EXTRAORDINARY 22,3 Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969, or any other banking institution notified by the Central Government in this behalf" shall be substituted.
23. If any difficulty arises in giving effect to the provisions of this Removal of Ordinance, the Central Government may make such order, not inconsis- difficulties, tent with the provisions of the Ordinance, as may appear to it to be necessary for the purpose of removing the difficulty.
THE FIRST SCHEDULE (See sections 2, 3 and 4) Column 1 Eocistmg bank Central Bank of India, Ltd.
Bank of India, Ltd.
Punjab National Bank, Ltd.
Bank of Baroda, Ltd.
United Commercial Bank, Ltd.
Canara Bank, Ltd.
United Bank of India, Ltd.
Dena Bank, Ltd.
Syndicate Bank, Ltd.
Union Bank of India, Ltd.
Allahabad Bank, Ltd.
Indian Bank, Ltd.
Bank of Maharashtra, Ltd.
Indian Overseas Bank, Ltd- Column 2 Corresponding new bank Central Bank of India.
Bank of India.
Punjab National Bank.
Bank of Baroda.
United Commercial Bank.
Canara Bank.
United Bank of India.
Dena Bank.
Syndicate Bank.
Union Bank of India.
Allahabad Bank.
Indian Bank.
Bank of Maharashtra.
Indian Overseas Bank.
THE SECOND SCHEDULE (See section 6) PRINCIPLES OF COMPENSATION
1. The compensation to be paid by the Central Government to each existing bank in respect of the acquisition cf the undertaking thereof shall be an amount equal to the sum-total of the value of the assets of the existing bank as on the commencement of this Ordinance, calculated in accordance with the provisions of Pert I, less the sum-total of the liabilities computed and obligations of the existing bank calculated in accordance with the provisions of Part II.
Part I.—Assets For the purposes of this Part "assets" means the total of the following : —
(a) the amount of cash in hand and with the Reserve Bank and the State Bank of India (including foreign currency notes which shall be converted at the market rate of exchange);
334 THE GAZETTE OF INDIA EXTRAORDINARY [PAHT II—
(b) the amount of balances with any banki whether on deposit or currency account, and money at call and < short. notice, balances held outside India being converted at the market rate of exchange:
Provided that any balances which are not realisable in full shall be deemed to be debts and valued accordingly;
(c) ,the market value, as on the day immediately before the commencement of the Ordinance, of any securities,. shares, debentures, bonds and other investments, held by the bank concerned.
Explanation.—For the purpose of this clause—
(i) securities of the Central and State Governments [other than the securities specified in sub-clauses (ii) and (Hi) of this Explanation] maturing for redemption within five years from the commencement of the Ordinance shall be valued at the face value or the market value, whichever is higher;
(ii) securities of th e Central Government, such as Post Office Certificates and Treasury Savings Deposit Certificates and any other securities or certificates issued or to be issued under the Small Savings Scheme of the Central Government, shall be valued at their face value or the encashable value as on the day immediately before the commencement of the Ordinance, whichever is higher;
(iji) where the market value of any Government security such as the zamindari abolition bonds or other similar security in respect of which the principal is payable in instalments, is not ascertainable or is, for any reason, not considered as reflecting the fair value thereof or as otherwise appropriate the security shall be valued at such an amount as is considered reasonable having, regard to the instalments of principal and interest remaining to be paid, the period during which such instalments are payable, the yield of any security, issued by the Government to which the security pertains and having the same or approximately the same maturity, and other relevant factors;
(iv) where the market value of any security, share, debenture, bond or other investment is not considered reasonable by reason of its having been affected by abnormal faptors, the investment may be valued on the basis of its average market value over any reasonable period;
(v) where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account ac is considered reasonable having regard to the financial position of the issuing concern, the dividend paid by it during the preceding five years and other relevant factors;
(d) the amount of advances (including loans, cash credits, overdrafts, bills purchased and discounted) and other debts, whether secured or unsecured, to the extent to which they are reasonably considered recoverable, having regard to the value of the security, if aiiy, the operation on the account, the reported worth and responsibility of the borrower, the prospects of realisation and other relevant considerations;
(e) the value of any land or buildings;
(f) the total amount of the premia paid, in respect of all leasehold properties, reduced in the case of each such premium by an amount which bears to such premium the same proportion as the SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY ^25 expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease;
(g) the written down value as per books, or the realisable value, as may be considered reasonable, of all furniture, fixtures and fittings;
(h) the market or realisable value, as may be appropriate, of other assets appearing on the books of the bank, no value being allowed for capitalised expenses, such as share selling commission, organisational expenses and brokerage, losses incurred and similar other items.
Part II.—Liabilities For the purposes of this Part "liabilities" means the total amount of all outside liabilities existing at the commencement of the Ordinance, and all contingent liabilities which the corresponding new bank may reasonably be expected to be required to meet out of its own resources on or after the date of commencement of the Ordinance.
CERTAIN DIVIDENDS NOT TO BE TAKEN INTO ACCOUNT
2. No separate compensation shall be payable for any profits or any dividend in respect of any period immediately preceding the commencement of the Ordinance for which, in the ordinary course, profits would have been transferred or dividend declared after the commencement of the Ordinance.
V. V. GIRI, Vice-President acting as President.
N. D. P. NAMBOODIRIPAD, Joint Secy, to the Govt. of India.
PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, HEW DELHI AND PUBLISHED BY THB MANAGER OF PUBLICATIONS, DELHI, 1 9 6 9