(i) The head office of each corresponding new bank shall be at such place as the Central Government may, by notification in the Oilicial 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 Ordinance, 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 is authorised 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 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 oi' 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 Ordinance.
(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.
(5) The Chairman of an existing bank holding office as such immediately before the commencement of this Ordinance, 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 oUice during Ihe pleasure of the Central Government.
Head office and management.
HFC. 1J THE GAZETTE OF INDIA EXTRAORDINARY i ^
8. Every corresponding new bank shal], in the discharge of its functions, be guided by such directions in lcgard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, give.
!), (i) The Central Government may, filter consultation with the Reserve Bank, make a scheme for canymg out the provisions oh this Ordinance.
(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 coi responding new bank, so however that the paid-up capital of any such bank shall not be in exc ess of rupees fifteen erorcs;
(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 leconstitution 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 corresponding new bank to any other1 banking institution or the transfer of the whole or any pait of the undertaking of any other banking institution to a corresponding new bank;
(d) such incidental, consequential and supplemental matters ;is may be necessary to carry out the provisions of this Ordinance.
(3) Every Board of Directors of a cuiresponding new bank, constituted under any scheme made under sub-sect ion (1), shall include—
(a) representatives of the employees and depositors of such bank, and
(b) such other persons as mav represent the interests of fanners workers and artisans, to be elected or nominated in such manner as may be specified in the scheme.
(4) The Central Government may, after consultation with the Reserve Bank, make a scheme to amend or vaiy any scheme made under sub section (1).
(5) Everv scheme 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 oi the session immediately following, both Houses agree in making any modification In the scheme or both Houses agrep 1li.il the scheme should not be made, the sell (-me shall fherenfter lmve effect only in such modified form or be Corresponding new banks to be guided by the directions of the Centrol Government.
Power of Central Government to make scheme I3() THE GAZETTE OF INDIA EXTRAORDINARY |PAHT 11 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.
CHAPTER V M L S C J I L L A N I ' O U S
10. (/) Every corresponding new bank shall cause its books to be closed and balanced on the 31st da}r of December of each year and shall appoint, with the previous approval of the Reserve Bank, auditors for the audit of its accounts.
(2) Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under section 226 of the Companies Act, 1956, and shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government.
(?) Every auditor shall be supplied with a copy of the annual balancesheet 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 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 Ir.uance-sheet is a full and fair balance-sheet containing al] the necessary particulars and id 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 sucly account; and
(e) any other matter which he considers should be brought to the notice of the Central Government.
Closure of Recounts and disposal of profit?.
1 Hi J!J5<i.
fiic. 1] THE GAZETTE OF INDIA EXTRAORDINARY 13?
(5) The report of the auditor shall be verified, signed and transmitted to the Central Government in such manner as may be prescribed.
(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 are usually provided for by banking companies, a corresponding new bank shall transfer the balance of profits to the Central Government.
11. For the purposes of the Income-tax Act, 1961, every corresponding new bank shall be deemed to be an Indian company and a company in which the public are substantially interested.
12* (1) Every person holding office, immediately before the commencement of this Ordinance, 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 (i), all officers and other employees of an existing bank shall become, on the commencement of this Ordinance, officers and employees of the corresponding new bank and shall hold their offices or services 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 them 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 their employment in the corresponding new bank is terminated or until their remuneration, terms or conditions are duly altered by the corresponding new bank.
(3) For the persons who immediately before the commencement of this Ordinance 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 persona as the Central Government may, by general or special order, specify.
(4) Notwithstanding anything contained in the Industrial Disputes Act, 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 Ordinance or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.