1 THE STATE BANK OF INDIA ACT, 1955 along with THE STATE BANK OF INDIA GENERAL REGULATIONS, 1955 THE STATE BANK (COMPENSATION ON IMPERIAL BANK SHARES) RULES, 1955 THE STATE BANK OF INDIA (APPOINTMENT OF EMPLOYEE DIRECTORS) RULES, 1974 THE STATE BANK OF INDIA ADMINISTRATOR (SALARY AND ALLOWANCES) RULES, 2013 THE STATE BANK OF INDIA COMMITTEE (PROCEDURE) RULES, 2013 STATE BANK OF INDIA LAW DEPARTMENT CORPORATE CENTRE MUMBAI [Updated as on 27 th July 2017] 2 © SBI, Law Department, Corporate Centre, Mumbai. manager.law@sbi.co.in mailto:manager.law@sbi.co.in 3 THE STATE BANK OF INDIA ACT, 1955 ............................................................................ 11 THE STATE BANK OF INDIA GENERAL REGULATIONS, 1955 .................................... 55 THE STATE BANK (COMPENSATION ON IMPERIAL BANK SHARES) RULES,
1955............................................................................................................................................ 93 THE STATE BANK OF INDIA (APPOINTMENT OF EMPLOYEE DIRECTORS) RULES, 1974 ........................................................................................................................... 107 THE STATE BANK OF INDIA ADMINISTRATOR (SALARY AND ALLOWANCES) RULES,
2013.................................................................................................................................... 115 THE STATE BANK OF INDIA COMMITTEE (PROCEDURE) RULES, 2013………………………………………………………………….……………………121 4 C O N T E N T S THE STATE BANK OF INDIA ACT, 1955 .......................................................................... 13
CHAPTER I .......................................................................................................................... 13 PRELIMINARY................................................................................................................ 13
1. Short title and commencement .............................................................................. 13
2. Definitions ............................................................................................................ 13
CHAPTER II ........................................................................................................................ 14 INCORPORATION AND SHARE CAPITAL OF STATE BANK ................................. 14
3. Establishment of the State Bank ............................................................................ 14
4. Authorised capital .................................................................................................. 14
5. Issued capital .............................................................................................................. 15
CHAPTER III ....................................................................................................................... 16 TRANSFER OF UNDERTAKING OF THE IMPERIALBANK TO STATE BANK .... 16
6. Transfer of assets and liabilities of the Imperial Bank to the State Bank .............. 16
7. Transfer of service of existing officers and employees of the Imperial Bank to the State Bank ...................................................................................................................... 16
8. Existing provident and other funds of the Imperial Bank ..................................... 17
9. Compensation to be given to the share-holders of Imperial Bank ........................ 18
CHAPTER IV ....................................................................................................................... 18 SHARES............................................................................................................................ 18
10. Transferability of shares ........................................................................................ 18
10A. Right of registered shareholders to nominate ....................................................... 18
11. Restrictions on voting rights .................................................................................... 19
12. Shares to be approved securities .............................................................................. 19
13. Register of shareholders ........................................................................................ 19
13A. Register of beneficial owners ............................................................................... 20
14. [*****] Omitted ................................................................................................... 20
15. Trust not to be entered on the register of share-holders.- ........................................ 20
CHAPTER V ........................................................................................................................ 20 MANAGEMENT .............................................................................................................. 20
16. Offices, branches and agencies .............................................................................. 20
17. Management .......................................................................................................... 21
18. Central Board to be guided by directions of Central Government .......................... 21
19. Composition of the Central Board ......................................................................... 21
19A. Qualifications for election of directors elected by shareholders ........................... 22
19B. Power of Reserve Bank to appoint additional directors ........................................ 23
20. Term of office of chairman, managing director, etc ............................................. 23
21. Local Boards ............................................................................................................ 25 21A Term of office of members of Local Board ........................................................... 26
21B. Powers of Local Board .......................................................................................... 26
21C. Local Committees ................................................................................................. 27
22. Disqualifications for directorship of Central Board or membership of Local Boards or of Committees............................................................................................................ 27
23. Vacation of office of directors, etc. ......................................................................... 29 5
24. Removal from office of directors, etc. ................................................................... 29
24A. Supersession of Central Board in certain cases ................................................... 30
25. Casual Vacancies ..................................................................................................... 31
26. Remuneration of directors ..................................................................................... 31
27. Powers and remuneration of chairman .................................................................. 32
28. [*****]] Omitted ..................................................................................................... 32
29. Powers and remuneration of managing director .................................................... 32
30. Executive and other committees of the Central Board .......................................... 33
31. Meetings of the Central Board ............................................................................... 33
31A. Meetings of Local Boards ..................................................................................... 34
CHAPTER VI ....................................................................................................................... 35 BUSINESS OF THE STATE BANK ............................................................................... 35
32. State Bank to act as agent of the Reserve Bank .................................................... 35
33. Other Business which the State Bank may transact ................................................. 35
34. Business which the State Bank may not transact ..................................................... 35
35. State Bank may acquire the business of other banks ............................................. 36
35A. Arrangement with the State Bank on appointment of directors to prevail ........ 38
CHAPTER VII ..................................................................................................................... 38 FUNDS, ACCOUNTS AND AUDIT ............................................................................... 38
36. Integration and Development Fund. ...................................................................... 38
37. Reserve Fund ......................................................................................................... 39
38. Disposal of profits ................................................................................................. 39
38A. Transfer of unpaid or unclaimed dividend ............................................................ 39
39. Books to be balanced each year ............................................................................. 40
40. Returns ................................................................................................................... 40
41. Audit ...................................................................................................................... 41
42. Balance sheet etc., of State Bank may be discussed at general meeting.- ............... 43
CHAPTER VIII .................................................................................................................... 43 MISCELLANEOUS.......................................................................................................... 43
43. State Bank may appoint officer and other employees ............................................. 43 43A Bonus ..................................................................................................................... 44
44. Obligation as to fidelity and secrecy ..................................................................... 44
45. Bar to liquidation of State Bank ............................................................................ 44
46. Indemnity of directors and members of Local Boards and Local Committees, etc.
44
47. Defects in appointment or constitu tion not to invalidate acts or proceedings ...... 45
48. Power to remove difficulties.- ******] Omitted .................................................... 45
49. Power of Central Government to make rules ........................................................... 45
50. Power of Central Board to make regulations ......................................................... 46
51. Requirements of foreign law to be complied with in certain cases ......................... 48
52. Amendment of Act 2 of 1934.- [*****] Omitted .................................................... 48
53. Amendment of Act 10 of 1949.- [*****] Omitted ................................................. 48
54. Amendment of Act 47 of 1920.- [*****] Omitted ................................................ 48
55. No proceeding to lie in India against Imperial Bank after appointed day ............... 48
56. References to the Imperial Bank, the Bank of Bengal, etc. in other laws ............. 49
57. Dissolution of Imperial Bank, etc.- ....................................................................... 49 6 THE FIRST SCHEDULE ................................................................................................. 49 COMPENSATION FOR THE TRANSFER OF SHARES OF THE IMPERIAL BANK TO THE RESERVE BANK .......................................................................................... 49 THE SECOND SCHEDULE ............................................................................................ 50 DECLARATION OF FIDELITY AND SECRECY ..................................................... 50 THE THIRD SCHEDULE ................................................................................................ 51 Repealed ......................................................................................................................... 51 THE FOURTH SCHEDULE ............................................................................................ 51 Repealed ......................................................................................................................... 51 Repealed ......................................................................................................................... 51 LIST OF AMENDING ENACTMENTS .......................................................................... 51 LIST OF ABBREVIATIONS USED ................................................................................ 52 THE STATE BANK OF INDIA GENERAL REGULATIONS, 1955 ................................ 55 THE STATE BANK OF INDIA GENERAL REGULATIONS, 1955 ..................................... 57
CHAPTER I ............................................................................................................................... 57 INTRODUCTORY I .................................................................................................................. 57
1. Short title and commencement ............................................................................................ 57
2. Definitions ........................................................................................................................... 57
CHAPTER II .............................................................................................................................. 57 SHARES AND SHARE REGISTER ........................................................................................ 57
3. Shares moveable property ................................................................................................... 57
3A. Share Capital ..................................................................................................................... 58
3B. Procedure for increasing issued capital by the issue of equity or preference shares ....... 58
3C. Manner of accepting money for issued capital, forfeiture and reissue of shares .............. 58
4. Control over shares and branch registers ............................................................................ 61
5. Parties who may not be registered as shareholders ............................................................. 61
6. Particulars to be entered in the share registers .................................................................... 61
7. Exercise of rights of joint holders ....................................................................................... 62
8. [Repealed]. ......................................................................................................................... 62
9. Inspection of registers ......................................................................................................... 63
10. Closing of share registers .................................................................................................... 63
11. Form of shares Certificates and manner of its preparation ................................................. 63
12. Issue of share certificates free of charge ............................................................................. 63
13. Renewal of share certificates ............................................................................................... 64
14. Warrant for transfer of State Bank shares ........................................................................... 64
15. Transfer of shares ................................................................................................................ 65
16. Power to refuse or suspend transfers ................................................................................... 65
16A. Nomination by a Shareholder ........................................................................................... 66
16B. Transmission of shares in case of nomination .................................................................. 66
17. [Repealed] .......................................................................................................................... 67
18. [Repealed] ........................................................................................................................... 67 7
19. Transmission of shares in the event of death, insolvency etc, of a shareholder.................. 67
20. Shareholder ceasing to be qualified for registration............................................................ 68
20A. Delegation of powers and functions by Central Board or its Executive Committee ...... 68
CHAPTER II - A ....................................................................................................................... 68 SAFEGUARDS TO BE PROVIDED IN MAINTAINING THE REGISTER OF SHAREHOLDERS IN COMPUTERS ...................................................................................... 68
20B. Maintenance of shares-register in computer systems etc. ................................................. 68
20C. Safe guards for protection of computer system ................................................................. 69
20D. Powers of the chairman or managing director to provide for other safe guards ............... 69
CHAPTER III ............................................................................................................................ 69 MEETINGS OF SHAREHOLDERS ......................................................................................... 69
21. Notice convening a general meeting ................................................................................... 69
22. Special general meeting ...................................................................................................... 70
23. Business at general meetings............................................................................................... 70
24. Quorum at general meetings ............................................................................................... 70
25. Chairman at general meetings ............................................................................................. 70
26. Persons entitled to attend general meetings ........................................................................ 71
27. Voting at general meetings .................................................................................................. 71
28. Minutes of general meetings ............................................................................................... 71
29. [Repealed] ........................................................................................................................... 71
CHAPTER IV ............................................................................................................................ 72 VOTING RIGHTS OF SHAREHOLDERS .............................................................................. 72
30. [Repealed] .......................................................................................................................... 72
31. Determination of voting rights ............................................................................................ 72
32. Voting by duly authorised representative............................................................................ 72
33. Voting by duly authorised representative precludes voting by proxy ................................. 73
34. Proxies ................................................................................................................................. 73
35. Appointment of an employee of the State Bank as duly authorised representative of proxy invalid. ....................................................................................................................................... 74
CHAPTER V.- ........................................................................................................................... 74 ELECTION OF DIRECTORS.- ................................................................................................ 74
36. [Repealed]......................................................................................................................... 74
37. Directors to be elected at General Meeting ......................................................................... 74
38. List of Share- holders .......................................................................................................... 74
39. Nomination of candidates for election ................................................................................ 75
40. Publication of list of candidates .......................................................................................... 75
41. Assumption of office by the elected candidate ................................................................... 76
42. Election disputes ................................................................................................................. 76
CHAPTER VI ............................................................................................................................ 76 CENTRAL BOARD AND ITS EXECUTIVE COMMITTEE ................................................. 76
43. [Repealed] ........................................................................................................................... 76
44. Meetings of the Central Board ............................................................................................ 76
44A. Participation of the directors in the meeting of the Central Board through videoconferencing or other electronic means ............................................................................ 77
45. Resolution without meeting of Central Board valid........................................................... 77 8
46. Constitution and powers of the Executive Committee ........................................................ 78
47. Meetings of the Executive Committee ................................................................................ 78
CHAPTER VI A ........................................................................................................................ 78
47A. Jurisdiction of local head offices ...................................................................................... 78
47B. Exclusion of jurisdiction of local head office ................................................................... 80
CHAPTER VII ........................................................................................................................... 80 LOCAL BOARDS AND THEIR COMMITTEES.................................................................... 80
48. [Repealed] ........................................................................................................................... 80
49. [Repealed] ........................................................................................................................... 80
50. [Repealed] ........................................................................................................................... 80
51. [Repealed] ........................................................................................................................... 80
52. Meetings of Local Boards ................................................................................................... 80
53. Adoption of resolution by Local Board by circulation ....................................................... 81
54. [Repealed] ........................................................................................................................... 81
55. Powers with regard to staff ................................................................................................. 81
56. Constitution and powers of the Committee of the Local Board .......................................... 82
57. Meetings of the Committee of the Local Board .................................................................. 82
CHAPTER VIII ......................................................................................................................... 82 REMUNERATION OF DIRECTORS AND LOCAL BOARD MEMBERS ........................... 82
58. Chapter VIII not to apply to Chairman ............................................................................... 82 59 Fees for Directors, etc. ........................................................................................................ 82
60. Reimbursement of travelling expenses of Directors and Local Board members ................ 83
CHAPTER IX ............................................................................................................................ 83 LOANS AND ADVANCES ...................................................................................................... 83
61. Definitions ........................................................................................................................... 83
62. Powers to grant loans and advances by Local Boards ........................................................ 84
63. [Repealed] ........................................................................................................................... 85
64. Directors and members of Local Boards to notify their interests in firms, companies, etc. 85
65. Employee not to grant loan or advance to himself .............................................................. 85
66. Employee not to grant loan or advance to relatives ............................................................ 85
67. Loan or advance to officers and employees ........................................................................ 85
68. [Repealed] ........................................................................................................................... 85
69. [Repealed] ........................................................................................................................... 85
70. [Repealed] ........................................................................................................................... 86
71. [Repealed] ........................................................................................................................... 86
72. [Repealed] ........................................................................................................................... 86
73. [Repealed] ........................................................................................................................... 86
74. [Repealed] ........................................................................................................................... 86
CHAPTER X ............................................................................................................................. 86 MISCELLANEOUS .................................................................................................................. 86
75. Manner and form in which contracts binding on the State Bank may be executed ........... 86
76. Accounts receipts and documents of State Bank by whom to be signed ............................ 86
77. Plaints, etc, by whom to be signed ...................................................................................... 87
78. Joint responsibility of Managing Directors in administrative and staff matters ................. 87 9
79. Obligations to notify disqualifications of directors and members of Local Boards and Local Committees .............................................................................................. 87
80. The Seals of the State Bank................................................................................................. 87
81. Service of notices to shareholders ....................................................................................... 88
82. Service of notice on State Bank .......................................................................................... 88
82A. [Repealed] ......................................................................................................................... 88
83. Payment of dividend............................................................................................................ 88
84. Matters not covered by these regulations ............................................................................ 89 Schedule-I .................................................................................................................................. 89 Schedule- II ................................................................................................................................ 92 COMMENTS/ NOTES. ............................................................................................................. 92 THE STATE BANK (COMPENSATION ON IMPERIAL BANK SHARES) RULES,
1955............................................................................................................................................ 93 THE STATE BANK (COMPENSATION ON IMPERIAL BANK SHARES) RULES, 1955. 95
1. Short title and date of commencement ................................................................................ 95
2. Definitions-.......................................................................................................................... 95
3. When different holdings may be combined ........................................................................ 95
4. Manner in which applications for compensation shall be made. ........................................ 95
5. Warrant for transfer of State Bank shares ........................................................................... 96
6. Payment of the balance of compensation after deduction of the price of State Bank shares- ........................................................................................................................................ 96
7. Shares registered in the names of deceased holders ............................................................ 96
8. Claims under instruments of transfer .................................................................................. 97
9. Claims not provided for by Rules 7 and 8 ........................................................................... 97
10. Power to require indemnity ................................................................................................. 97
11. Rules also to apply to claimants other than registered shareholders ................................... 97
12. Loss, etc., of share certificate .............................................................................................. 97
13. Information regarding payment of compensation ............................................................... 98
SCHEDULE ............................................................................................................................... 98 FORM ‘A’ .................................................................................................................................. 98 FORM ‘B’ ................................................................................................................................ 101 FORM ‘C’ ................................................................................................................................ 103 FORM ‘D’ ................................................................................................................................ 106 THE STATE BANK OF INDIA (APPOINTMENT OF EMPLOYEE DIRECTORS) RULES,
1974.......................................................................................................................................... 107 THE STATE BANK OF INDIA (APPOINTMENT OF EMPLOYEE DIRECTORS) RULES,
1974.......................................................................................................................................... 109
CHAPTER 1 – Introductory .................................................................................................... 109
1. Short title and commencement –.......................................................................................... 109
2. Definitions............................................................................................................................ 109
CHAPTER II – Appointment of Employee Directors ............................................................. 109 10
3. Appointment of workmen-employee director ...................................................................... 109
4. Appointment of non-workmen employee director .............................................................. 110 THE SCHEDULE .................................................................................................................... 110 ANNEXURE I ......................................................................................................................... 113 ANNEXURE II ........................................................................................................................ 113 THE STATE BANK OF INDIA ADMINISTRATOR (SALARY AND ALLOWANCES) RULES, 2013 .......................................................................................................................... 115 THE STATE BANK OF INDIA ADMINISTRATOR (SALARY AND ALLOWANCES) RULES, 2013 ........................................................................................................................... 117
1. Short title and commencement............................................................................................. 117
2. Definitions............................................................................................................................ 117
3. Salary and Allowances ......................................................................................................... 117
4. Residuary provision ............................................................................................................. 118
5. Oaths of office and secrecy .................................................................................................. 118 THE STATE BANK OF INDIA COMMITTEE (PROCEDURE) RULES, 2013 .................. 121 THE STATE BANK OF INDIA COMMITTEE (PROCEDURE) RULES, 2013 .................. 123
1. Short title and commencement............................................................................................. 123
2. Definitions............................................................................................................................ 123
3. Meetings of the Committee .................................................................................................. 123
4. Quorum ................................................................................................................................ 124
5. Residuary provision ............................................................................................................. 124 11 THE STATE BANK OF INDIA ACT, 1955 (Act No. 23 OF 1955) 12 13 THE STATE BANK OF INDIA ACT, 1955 (Act No. 23 OF 1955) AN ACT To constitute a State Bank for India, to transfer to it the undertaking of the Imperial Bank of India and to provide for other matters connected therewith or incidental thereto.
(8th May, 1955).
Whereas for the extensions of banking facilities on a large scale, more particularly in the rural and semi-urban areas, and for divers other public purposes it is expedient to constitute a State Bank for India, and to transfer to it the undertaking of the Imperial Bank of India and to provide for other matters connected therewith or incidental thereto;
Be it enacted by Parliament in the Sixth Year of the Republic of India as follows:-
CHAPTER I PRELIMINARY
1. Short title and commencement.- (1) This Act may be called the State Bank of India Act, 1955.
(2) It shall come into force on such date 1 as the Central Government may, by notification in the Official Gazettee, appoint.
2. Definitions. - In this Act, unless the context otherwise requires,-
(a) “appointed day” means the date on which this Act comes into force :
(b) “Central Board” means the Central Board of Directors of the State Bank;
2 [(bb) “chairman” means the chairman of the Central Board;]
(c) “goods” includes bullion, wares and merchandise;
(d) “Imperial Bank” means the Imperial Bank of India constituted under the Imperial Bank of India Act, 1920 (47 of 1920);
3 [(dd) “Local Board” means a Local Board constituted under the Section 21;]
(e) “prescribed” means prescribed by regulations made under this Act;
(f) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India Act,1934 (2 of 1934) 1 1 st July 1955 wide Notification No. S.R.O. 1077, dt. 14th May 1955 see Gazette of India, Pt. II S. 3, page 869.
Extended to Dadra and Nagar Haveli by Reg. 6 of 1963, S.2 and Sch. I (w.e.f. 1-7-1965) Pondicherry by Reg.7 of 1963, S.3 and Sch. I (w.e.f 1-10-1963); Goa, Daman, Diu by Reg. 11 of 1963, S.3 and Sch., and to Sikkim vide Notification S. O. No. 548 (E) dt. 15-1-1976 (w.e.f. 14-8-1976) 2 Ins, by Act 35 of 1964, S.2 (w.e.f. 1-12-1964).
3 Ins, by Act 35 of 1964, S.2 (w.e.f. 1-12-1964).
14
(g) “State Bank” means the State Bank of India constituted under this Act;
1 [(h) “subsidiary bank” means a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);]
2 [(i)[……..]
3
(j) “workman” has the meaning assigned to it in the Industrial Disputes Act, 1947 (14 of 1947).]
CHAPTER II INCORPORATION AND SHARE CAPITAL OF STATE BANK
3. Establishment of the State Bank.- (1) A Bank to be called the State Bank of India shall be constituted to carry on the business of banking and other business in accordance with the provisions of this Act and for the purpose of taking over the undertaking of the Imperial Bank.
(2) The [Central Government] 4 , together with such other persons as may from time to time become shareholders in the State Bank in accordance with the provisions of this Act, shall, so long as they are shareholders in the State Bank, constitute a body corporate with perpetual succession and a common seal under the name of the State Bank of India, and shall sue and be sued in the name.
(3) The State Bank shall have power to acquire and hold property, whether movable or immovable, for the purposes for which it is constituted and to dispose of the same.
4. Authorised capital.- 5 [Subject to the provisions of this Act, the authorised capital of the State Bank shall be five thousand crores of rupees divided into five hundred crores of fully paid-up shares of ten 6 rupees each:
Provided that the Central Board may reduce the nominal or face value of the shares, and divide the authorised capital into such denomination as it may decide with the approval of the Reserve Bank:
1 Ins. by Act 38 of 1959, S.64 and It. I, Pt. VI of Th. Sch. (w.e.f.10-09-1959) 2 Omitted the words “ #“vice-chairman” means the vice chairman of the Central Board” by Act 27 of 2010, sec.2 (w.e.f. 15.09.2010), (#which was earlier ins, by Act 35 of 1964, S.2 (w.e.f. 1-12-1964)).
3 Ins. By Act 48 of 1973, S.2 (w.e.f. 1-7-1974) 4 Subs. By Act 32 of 2007, Sec.2 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 5 Subs. by Act 27 of 2010, S.3, (w.e.f. 15.09.2010). The section before its amendment was “Subject to the provisions of this Act, the authorised capital of the State Bank shall be *twenty crores of rupees divided into ** [two crores] of fully paid up share of ***[ten rupees] each: Provided that the Central Government may increase or reduce the authorised capital as it thinks fit so however that the shares in all cases shall be fully paid-up shares of [ten rupees] each” (*Increased to Rs.1000 crores in terms of Notification No. 14(3)89 / Accts. dated the 28th June 1990 of Banking Division, Ministry of Finance, Govt. of India.; ** Subs. by Act 3 of 1994, S. 2. (i) for “twenty Lakhs” (w.e.f. 15.10.1993); *** Subs.
by Act 3 of 1994, S. 2. (ii) for “one hundred rupees” (w.e.f. 15.10.1993)) 6 The Central Board of SBI vide notification No. ADVT III/4/Exty/39/14, dated 28.10.2014 published in the Gazette of India, Extraordinary Part III- Section 4, No.319 dated 05.11.2014 reduced the face value of equity shares of the Bank from Rs.10 per share to Rs.1 per share, with effect from 21.11.2014.
15
Provided further that the Central Government may in consultation with the Reserve Bank, increase or reduce the authorised capital so however that the shares in all cases shall be fully paid-up shares.]
5. Issued capital.- (1) The issued capital of the State Bank shall, on the appointed day, be five crores, sixty two lakhs and fifty thousand rupees divided into five lakhs, sixty two thousand and five hundred shares, all of which shall, on the appointed day, stand allotted to the [Central Government] 1 in lieu of the shares of the Imperial Bank 2 [transferred to and vested in it under section 6.]
3 [(2) The issued capital of the State Bank shall consist of equity shares or equity and preference shares:
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:
Provided further that the Central Board may from time to time increase, with the previous approval of the Reserve Bank and the Central Government, whether by public issue or rights issue or preferential allotment or private placement, in accordance with the procedure as may be prescribed, the issued capital by the issue of equity or preference shares:
Provided also that the Central Government shall, at all times, hold not less than fifty-one per cent. of the issued capital consisting of equity shares of the State Bank.]
4
(3)No increase in the issued capital beyond twelve crores and fifty lakhs of rupees shall be made under sub-section (2) without the previous sanction of the Central Government.
5 [(4) Subject to the provisions contained in sub-section (2), the Central Board may increase from time to time, by way of issuing bonus shares to existing equity shareholders, the issued capital in such manner as the Central government may after consultation with the Reserve Bank, direct.
(5) The State Bank may, accept the money in respect of shares issued towards increase in the issued capital in instalments, make calls, forfeit unpaid shares and re-issue them, in such manner as may be prescribed.]
1 Subs. By Act 32 of 2007, Sec.3 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 2 Subs. by Act 33 of 1955, S. 2 for “transferred to it” by para. 2 of the First Schedule (with retrospective effect).
3 Subs. by Act 27 of 2010, S. 4, (w.e.f. 15.09.2010). The section before its amendment was “The Central Board may from time to time increase the issued capital but no increase in the issued capital shall be made in such a manner that the Reserve bank holds at any time less than fifty five per cent of the issued capital of the State Bank.” 4 Increased to Rs.200 crores in terms of Notification No. 14(3)89 / Accts. dated the 28th June 1990 and further to Rs.500 crores in terms of Notification No. F-12/6/93-BOA dated the 20th Sept 1993 of Banking Division, Ministry of Finance, Govt. of India. Issued capital after the G.D.R. issue is increased to Rs 526.30 crores.
5 Ins. by Act 27 of 2010, S. 4, (w.e.f. 15.09.2010).
16
CHAPTER III TRANSFER OF UNDERTAKING OF THE IMPERIAL BANK TO STATE BANK
6. Transfer of assets and liabilities of the Imperial Bank to the State Bank. - (1) Subject to the other provisions contained in this Act, on the appointed day:-
(a) all share in the capital of the Imperial Bank shall be transferred to, and shall vest in the Reserve Bank, free of all trusts, liabilities and encumbrances, and
(b) the undertaking of the Imperial Bank shall be transferred to, and shall vest in the State Bank.
(2) The undertaking of the Imperial Bank shall be deemed to include all rights, powers, authorities and privileges, and all property, movable and immovable, including cash balances, reserve funds, investments and all other interests and rights in, or arising out of, such property as may be in the possession of the Bank immediately before the appointed day, and all books, accounts and documents relating thereto, and shall also be deemed to include all debts, liabilities and obligations of whatever kind then existing of that Bank.
1 [(3) Unless otherwise expressly provided by or under 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 appointed day and to which the Imperial Bank is a party or which are in favour of the Imperial Bank shall be of as full force and effect against or in favour of the State Bank, as the case may be, and may be enforced or acted upon as fully and effectually as if instead of the Imperial Bank the State Bank had been a party thereto or as if they had been issued in favour of the State Bank.]
(4) If on the appointed day any suit, appeal or other legal proceeding of whatever nature is pending by or against the Imperial Bank, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer to the State Bank of the undertaking of the Imperial 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 State Bank.
7. Transfer of service of existing officers and employees of the Imperial Bank to the State Bank .- (1) Every officer or other employee of the Imperial Bank (excepting the managing director, the deputy managing director and other directors) in the employment of the Imperial Bank immediately before the appointed day shall, on and from the appointed day, become an officer or other employee, as the case may be, of the State Bank, and shall hold his office or service therein by the same tenure, at the same remuneration, and upon the same terms and conditions and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if the undertaking of the Imperial Bank had not vested in the State Bank, and shall continue to do so unless and until his employment in the State Bank is terminated or until his remuneration, terms or conditions are duly altered by the State Bank.
(2) Any person who, on the appointed day, is entitled to or is in receipt of, a pension or other superannuation or compassionate allowance or benefit from the Imperial bank or any provident, pension or other fund or any authority administering such fund shall be entitled to be paid by, and to receive from, the State Bank or any provident, pension or other fund or any 1 Subs. by Act 33 of 1955, S. 3 for the original sub-S. (3) (with retrospective effect).
17 authority administering such fund the same pension, allowance or benefit so long as he observes the conditions on which the pension, allowance or benefit was granted, and if any question arises whether he has so observed such conditions, the question shall be determined by the Central Government and the decision of the Central Government thereon shall be final.
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), no appointment made or promotion, increment in salary, pension, allowance or any other benefit granted to any person after the 19th day of December, 1954, and before the appointed day which would not ordinarily have been made or granted or which would not ordinarily have been admissible under the rules or authorizations of the Imperial Bank or of any provident, pension or other fund in force prior to the 19th day of December, 1954 shall have effect or be payable or claimable from the State Bank or from any provident, pension or other fund or from any authority administering the fund, unless the Central Government has, by general or special order, confirmed the appointment, promotion or increment or has directed the continued grant of the pension, allowance or other benefit as the case may be.
(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 of the Imperial Bank from that Bank to the State Bank shall not entitle such officer or other employee to any compensation under that Act or other law, and no such claim shall be entertained by any court, tribunal or other authority.
(5) Any person holding office as managing director, deputy managing director, director or member of any Local Board of the Imperial Bank immediately before the appointed day shall be deemed to have vacated his office as such on the appointed day, and notwithstanding anything contained in this Act or in any other law for the time being in force or in any agreement or contract, he shall not be entitled to any compensation from the Imperial Bank or the State Bank for the loss of office or for the premature termination of any agreement or contract relating to his employment, except such pension, compensation or other benefit which the State Bank may grant to him, having regard to what that person would have received as an officer of the Imperial Bank if this Act had not been passed and if he had retired from his employment in the ordinary course.
(6) Where any managing director, deputy managing director, director, officer or other employee of the Imperial Bank has, after the 19th day of December, 1954, and before the appointed day, been paid any sum by way of compensation or gratuity, the State Bank shall be entitled to claim refund of any sum so paid if the payment is not confirmed by the Central Government by general or special order.
8. Existing provident and other funds of the Imperial Bank. - For the persons who immediately before the appointed day are the trustees of the following funds, that is to say,-
(a) the Imperial Bank of India Employees Provident Fund ;
(b) the Imperial Bank of India Employees Pension and Guarantee Fund;
(c) the Bank of Bombay Officers Pension and Guarantee Fund ;
(d) the Bank of Madras Pension and Gratuity Fund ;
(e) the Bank of Madras Officers Provident and Mutual Guarantee Fund ;
18 there shall be substituted as trustees such persons as the Central Government may, by general or special order, specify.
9. Compensation to be given to the share-holders of Imperial Bank.- (1) Every person who immediately before the appointed day is registered as a holder of shares in the Imperial Bank shall be entitled to compensation in accordance with the provisions contained in the First Schedule.
(2) Nothing contained in sub-section (1) shall affect the rights inter se between the holder of any share in the Imperial Bank and any other person who may have an interest in such share, and such other person shall be entitled to enforce his interest against the compensation awarded to the holder of such share, but not against the Reserve Bank.
CHAPTER IV SHARES
10. Transferability of shares. - (1) Save as otherwise provided in sub-section (2), the shares of the State Bank shall be freely transferable.
(2) Nothing contained in sub-section (1) shall entitle the [Central Government] 1 to transfer any shares held by it in the State Bank if such transfer will result in reducing the shares held by it to less than 2 [fifty-one per cent. of the issued capital consisting of equity shares,] of the State Bank.
3 [10A. Right of registered shareholders to nominate. (1) Every individual registered shareholder may, at any time, nominate, in the prescribed manner, an individual to whom all his rights in the shares shall vest in the event of his death.
(2) Where the shares are registered in the name of more than one individual jointly, the joint holders may together nominate in the prescribed manner, an individual to whom all their rights in the shares shall vest in the event of the death of all the joint holders.
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, where a nomination in respect of shares is made in the prescribed manner and which purports to confer on the nominee the right to vest the shares, the nominee shall, on the death of the shareholder or, as the case may be, on the death of all the joint holders, become entitled to all the rights of the shareholder or, as the case may be, of all the joint holders, in relation to such shares and all other persons shall be excluded unless the nomination is varied or cancelled in the prescribed manner.
(4) Where the nominee is a minor, it shall be lawful for the individual registered holder of the shares to make nomination to appoint, in the prescribed manner, any person to become entitled to the shares in the event of his death during the minority of the nominee.]
1 Subs. By Act 32 of 2007, Sec.4 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 2 Subs. by Act 27 of 2010, S. 5 for the words “fifty-five per cent. of the issued capital”, (w.e.f.
15.09.2010).
3 Ins. by Act 27 of 2010, S. 6, (w.e.f. 15.09.2010).
19 1 [11. Restrictions on voting rights. - No shareholder, other than the [Central Government] 2 , shall be entitled to exercise voting rights in respect of any shares held by him in excess of ten percent of the issued capital.
Provided that such shareholder shall be entitled to exercise voting rights at such higher percentage as the Central Government may, after consultation with the Reserve Bank, specify.]
3 [Provided further that the shareholder holding any preference share capital in the State Bank shall, in respect of such capital, have a right to vote only on resolutions placed before the State Bank which directly affect the rights attached to his preference shares:
Provided also that 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 total voting rights of all the shareholders holding preference share capital only.]
12. Shares to be approved securities. - Notwithstanding anything contained in the Acts hereinafter mentioned in this section, the shares of the State Bank shall be deemed to be included among the securities enumerated in section 20 of the Indian Trusts Act, 1882 (2 of 1882), and also to be approved securities for the purpose of the Insurance Act, 1938 (4 of 1938) 4 [……].
5 [13. Register of shareholders.- (1) The State Bank shall keep at its Central Office, a register, in one or more books of the shareholders, and shall enter therein the following particulars so far as they may be available :-
(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.
6 [Provided that nothing in this sub-section shall apply to the shares held with a depository]
(2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the State Bank to keep the register of shareholders 7 [in computer floppies or diskettes or any other electronic form] subject to such safeguards as may be prescribed.
1 Subs. by Act 3 of 1994, S. 3 (w.e.f. 15.10.1993) 2 Subs. By Act 32 of 2007, Sec.5 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 3 Ins. by Act 27 of 2010, S. 7, (w.e.f. 15.09.2010).
4 Omitted the words “ and the Banking Regulation Act, 1949” by Act 4 of 2013, Schedule (w.e.f
18.01.2013).
5 Subs. by Act 3 of 1994, S. 5 (w.e.f. 15.10.1993) 6 Ins. by Act No.8 of 1997, S.3 (w.e.f. 15.01.1997) 7 Subs. by Act 27 of 2010, S. 8, for “in computer floppies or diskettes” (w.e.f. 15.09.2010).
20
(3) Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), a copy of, or extract from, the register of shareholders, certified to be a true copy under the hand of an officer of the State Bank authorised in this behalf shall, in all legal proceedings, be admissible in evidence.]
1 [13A. Register of beneficial owners.- The register of beneficial owners maintained by a depository under S.11 of the Depositories Act, 1996 (22 of 1996) shall be deemed to be register of shareholders for the purposes of this Act.]
14.
2 [*****] Omitted 3 [15. Trust not to be entered on the register of share-holders.- No. notice of any trust, express, implied or constructive, shall be entered on the register of shareholders or be receivable by the State Bank .]
4 [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.
Explanation. :- For the purposes of Section 13, Section 13A 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]
CHAPTER V MANAGEMENT
16. Offices, branches and agencies.- (1) Unless otherwise provided by the Central Government, by notification in the Official Gazette, the Central Office of the State Bank shall be at 5 [Mumbai, and shall also be known as Corporate Centre].
(2) The State Bank shall have local head offices in 6 [Mumbai, Kolkata and Chennai] and at such other places in India as the Central Government, in consultation with the Central Board, may determine.
(3) The State Bank shall maintain as its branches or agencies all branches or agencies of the Imperial Bank which were in existence 7 [in India] immediately before the appointed day, and no such branch may be closed without the previous approval of the Reserve Bank.
(4) The State Bank may establish branches or agencies at any place in or outside India in addition to the branches or agencies referred to in sub-section (3).
(5) Notwithstanding anything contained in sub-section (4), the State Bank shall establish not less than four hundred branches in addition to the branches referred to in sub-section (3) within five years of the appointed day or such extended period as the Central Government may specify in this behalf, and the places where such additional branches are to be 1 Ins. by Act No.8 of 1997, S.4 (w.e.f. 15.01.1997) 2 Omitted by Act 3 of 1994, S. 6 (w.e.f. 15.10.1993) 3 Subs. by Act 3 of 1994, S. 7 (w.e.f. 15.10.1993) 4 Ins. by Act No.8 of 1997. S.5 (w.e.f. 15.01.1997) 5 Ins. by Act 27 of 2010, S. 9, for “Bombay” (w.e.f. 15.09.2010).
6 Ins. by Act 27 of 2010, S. 9, for “Bombay, Calcutta and Madras” (w.e.f. 15.09.2010).
7 Ins by Act 33 of 1955, S.4 (with retrospective effect).
21 established shall be determined in accordance with any such programme as may be drawn up by the Central Government from time to time in consultation with the Reserve Bank and the State Bank, and no branch so established shall be closed without the previous approval of the Reserve Bank.
17. Management. - (1) The general superintendence and direction of the affairs and business of the State Bank shall be entrusted to the Central Board which may exercise all powers and do all such acts and things as may be exercised or done by the State Bank and are not by this Act expressly directed or required to be done by the State Bank in general meeting.
(2) The Central Board in discharging its functions shall act on business principles, regard being had to public interest.
18. Central Board to be guided by directions of Central Government.- (1) In the discharge of its functions 1 [including those relating to a subsidiary bank], the State Bank shall be guided by such directions in matters of policy involving public interest as the Central Government may, in consultation with the Governor of the Reserve Bank and the chairman of the State Bank, give to it.
(2) [All directions shall be given by the Central Government] 2 and, if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.
19. Composition of the Central Board.- The Central Board shall consist of the following, namely :-
(a) chairman 3 [***] to be appointed by the Central Government in consultation with the Reserve Bank 4 [............];
(b) 5 [such number of managing directors not exceeding four, as may be appointed by the Central Government in consultation with the Reserve Bank. ] 6{
(bb) 7[*****]
(c) if the total amount of the holdings of the shareholders, other than the [Central Government] 8 , whose names are on the 9 (register of shareholders) three months before the date fixed for election of directors is - 1 Ins by Act 38 of 1959, S. 64 and It. 2, Pt. VI of TH. Sch. (w.e.f. 10.9.59) 2 Subs. By Act 32 of 2007 sec.6 for the words ‘All directions given by the Central Government shall be given through the Reserve Bank’ w.e.f. 29.06.2007 3 The words “and a vice-chairman” omitted. by Act 27 of 2010, S. 10, (w.e.f. 15.09.2010).
4 Omitted by Act 73 of 1976, S. 4 (i) (a) (w.e.f. 11.6.1976) 5 Sub by Act 27 of 2010, S.10, (w.e.f. 15.09.2010), for the words “not more than two managing directors, if any, appointed * [by the Central Government in consultation with the Reserve Bank]”.
(*Subs by Act 73 of 1976, S. 4 (i) (b) (w.e.f. 11.6.1976)).
6 Subs. by Act 35 of 1964, S.3 for cls. (c) and (d) (w.e.f. 1-12-1964)).
7 Omitted by Act 27 of 2010, S.10, (w.e.f 15.09.2010) for the words “(bb) the presidents of the Local Boards appointed under sub-section (5) of section 21, ex-officio”.
8 Sub. by Act 32 of 2007 sec.7 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 9 Subs. by Act 3 of 1994, S. 8 (ii) (w.e.f. 15-10-1993) 22
(i) not more than ten per cent of the total issued capital, two directors,
(ii) more than ten percent but not more than twenty-five percent of such capital, three directors, and
(iii)more than twenty-five per cent of such capital, four directors, to be elected in the prescribed manner by such shareholders;
1 [(ca) one director, from among the employees of the State Bank, who are workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act;
(cb) one director, from among such of the employees of the State Bank, as are not workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act;]
(d) not less than two and not more than six directors to be nominated by the Central Government 2 [****] from among persons having special knowledge of the working of co-operative institutions and of rural economy or experience in commerce, industry, banking or finance;}
(e) one director to be nominated by the Central Government ; and
(f) 3 [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.]
4 [ ***** ] 5 {19A. Qualifications for election of directors elected by shareholders.- (1) The directors elected under clause (c) of section 19 shall—
(a) have special knowledge or experience in respect of one or more of the following areas, namely:—
(i) agriculture and rural economy,
(ii) banking,
(iii) co-operation,
(iv) economics,
(v) finance,
(vi) law,
(vii) small-scale industry,
(viii) any other area the special knowledge of, and experience in, which in the opinion of the Reserve Bank shall be useful to the State Bank;
(b) represent the interests of depositors; or 1 Ins by Act 48 of 1973, S. 3. (w.e.f. 1-7-1974).
2 The words “in consultation with the Reserve Bank,” omitted by Act 27 of 2010, S. 10, (w.e.f.
15.09.2010).
3 Sub.. by Act 27 of 2010, S. 10, for “one director to be nominated by the Reserve Bank” (w.e.f.
15.09.2010).
4 Sub-Ss. (2) and (3) omitted by Act 35 of 1964, S. 3 (w.e.f. 1-12-1964).
5 Ins. by Act 27 of 2010, S. 11, (w.e.f. 15.09.2010).
23
(c) represent the interests of farmers, workers and artisans.
(2) Without prejudice to the provisions of sub-section (1) 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 (c) of section 19 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 and the Reserve Bank may specify in the notification issued under this subsection, the authority to determine the fit and proper status, the manner of such determination, the procedure to be followed for such determinations and such other matters as may be considered necessary or incidental thereto.
(3) Where the Reserve Bank is of the opinion that any director of the State Bank elected under clause (c) of section 19 does not fulfil the requirements of subsections (1) and
(2), it may, after giving to such director and the State Bank a reasonable opportunity of being heard, by order, remove such director.
(4) On the removal of a director under sub-section (3), the Central Board shall co-opt any other person fulfilling the requirements of sub-sections (1) and (2), as a director in place of the person so removed, till a director is duly elected by the shareholders of the State 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 State Bank as a director.
19B. Power of Reserve Bank to appoint additional directors.- (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 State Bank or its depositors, it is necessary so to do, it may, from time to time and by order in writing appoint, with effect from such date as may be specified in the order, one or more persons as additional directors of the State Bank.
(2) Any person appointed as additional director under sub-section (1) shall,—
(a) 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, by order, specify;
(b) not incur any obligation or liability by reason only of his being an additional 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) not be required to hold qualification shares in the State Bank.
(3) For the purpose of reckoning any proportion of the total number of directors of the State Bank, any additional director appointed under this section shall not be taken into account.}
20. Term of office of chairman, managing director, etc.- (1) 1 [The chairman 2 [***] and each managing director] shall hold office for such term, not exceeding five years, as the Central Government may fix when appointing them and shall be eligible for reappointment.
1 Subs by Act 73 of 1976, S. 4 (ii) (a) (w.e.f. 11-6-1976).
2 The words “the vice-chairman” omitted by Act 27 of 2010, S. 12 (a), (w.e.f. 15.09.2010).
24 1 [(1A) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the term of office of the chairman 2 [***] or a managing director, as the case may be, at any time before the expiry of the term fixed under sub-section (1) by giving him notice of not less than three months in writing or three months’ salary and allowances in lieu of such notice, and the chairman 3 [***] or a managing director, as the case may be, shall also have the right to relinquish his office at any time before the expiry of the term so fixed by giving to the Central Government notice of not less than three months in writing.]
4 [(2) *****]
(3) Subject to the provisions contained in section 19 5 [............], a director elected under clause (c) 6 [.........] of 7 [that section] shall hold office for 8 [three years] 9 [……….]
10 [...........], and shall be eligible for re-election 11 [............].
12 [Provided that no such director shall hold office continuously for a period exceeding six years.]
13 {3(A) 14 [Subject to the provisions contained in sub-section (4), a director] appointed under clause (ca) or clause (cb) 15 [of section 19 16 (or nominated under clause (d) of that section)] shall hold office for such term, not exceeding three years, as the Central Government may specify 17 [***], and shall be eligible for 18 [re-appointment or renomination, as the case may be].} 19 [Provided that no such director shall hold office continuously for a period exceeding six years.]
1 [(4) A director appointed under clause (ca) or clause (cb) 2 [of section 19 or nominated under clause (d) or clause (e) or clause (f) of that section] shall hold office during the pleasure of the authority appointing or nominating him, as the case may be].
1 Ins. by Act 73 of 1976, S. 4 (ii) (b) (w.e.f. 11-6-1976).
2 The words “vice-chairman” omitted by Act 27 of 2010, S. 12(b), (w.e.f. 15.09.2010).
3 The words “vice-chairman” omitted by Act 27 of 2010, S. 12(b), (w.e.f. 15.09.2010).
4 Omitted by Act 73 of 1976, S. 4 (ii) (c) (w.e.f. 11-6-1976).
5 Omitted by Act 66 of 1988, S. 12 (a) (i) (w.e.f. 8.7.1992).
6 Omitted by Act 3 of 1994, S. 9 (a) (w.e.f. 15.10.1993).
7 Subs. by Act 66 of 1988, S. 12. (a) (ii) (w.e.f. 8.7.1992).
8 Subs. by Act 66 of 1988, S. 12. (a) (ii) (w.e.f. 8.7.1992).
9 The words “and thereafter until his successor shall have been duly elected” omitted by Act 45 of 2006, Sec.14.
10 Omitted by Act 66 of 1988, S. 12(a) (iii) (w.e.f. 8.7.1992).
11 Omitted by Act 66 of 1988, S. 12(a) (iii) (w.e.f. 8.7.1992).
12 Ins. by Act 66 of 1988, S. 12 (a) (iv) (w.e.f. 8.7.1992).
13 Ins. by Act 48 of 1973, S. 4 (w.e.f. 1.7.1974).
14 Subs. by Act 66 of 1988, S. 12(b) (i) (w.e.f. 8.7.1992).
15 Subs. by Act 3 of 1994, S. 9 (b) (w.e.f. 15.10.1993).
16 Ins. by Act 66 of 1988, S. 12 (b) (ii) (w.e.f. 8.7.1992).
17 The words “and thereafter until his successor shall have been *[duly appointed or nominated]” omitted by Act 27 of 2010, S. 12 (c), (w.e.f. 15.09.2010). (*Subs. by Act 66 of 1988, S. 12, for “duly appointed” (w.e.f. 8.7.1992).
18 Subs. by Act 66 of 1988, S. 12 (b) (iii) (w.e.f. 8.7.1992).
19 Ins. by Act 66 of 1988, S. 12. (b) (iv) (w.e.f. 8.7.1992).
25 3 [(5) *****] 4 [21. Local Boards.- (1) There shall be constituted at each place where the State Bank has a local head office, a Local Board which shall consist of the following members, namely :- 5 [(a) the chairman, ex officio or the managing director nominated by the chairman;]
6 [(b) all such directors elected or nominated to the Central Board under clause (c) or clause (d) of section 19 as are ordinarily resident in the area falling within the jurisdiction of the local head office;]
(c) six members to be nominated by the Central Government 7 [***];
(d) 8 (...............).
(e) 9 [the chief general manager] of the local head office, appointed by the State Bank, ex-officio.
10 [(2)Where as a result of the establishment of any local head office (hereinafter referred to as “the new local head office”) for any area which is already falling within the jurisdiction of another local head office (hereinafter referred to as “the existing local head office”) a Local Board (hereinafter referred to as “the new Local Board”) is constituted for the new local head office, any person who is, at the time of such constitution, holding office as a member of a Local Board (hereinafter referred to as “the existing Local Board”) for an existing local head office under clause (c) of subsection (1) and is ordinarily resident in the area falling within the jurisdiction of the new local head office, shall cease to hold office as member of the existing Local Board and shall become a member of the new Local Broad and shall on becoming such member be deemed to have been nominated to the new Local Board and shall hold office as such member for the unexpired portion of his term of office as a member of the existing Local Board.;]
(3) Any vacancy caused in the existing Local Board as a result of any member thereof becoming a member of the new Local Board under sub-section (2) shall be deemed to be a casual vacancy and be filled in accordance with the provisions of Section 25.
(4) 11 (..............).
1 [(5) The 2 [Central Government] shall, in consultation with the chairman, appoint- 1 Subs. by Act 66 of 1988, S. 12(c) (w.e.f. 8.7.1992).
2 Subs. by Act 3 of 1994, S. 9 (c) (w.e.f. 15.10.1993).
3 Omitted by Act 66 of 1988, S. 12 (d) (w.e.f. 8.7.1992).
4 Subs. by Act 35 of 1964, S. 5 for S. 21 (w.e.f. 1.12.1964).
5 Subs. by Act 27 of 2010, S. 13 for the words “(a) the chairman, ex-officio;”, (w.e.f. 15.09.2010).
6 Subs. by Act 3 of 1994, S. 10 (a) (i) (w.e.f. 15.10.1993).
7 The words “in consultation with the Reserve Bank” omitted by Act 27 of 2010, S. 13, (w.e.f.
15.09.2010).
8 Omitted by Act 3 of 1994, S. 10 (a) (ii) (w.e.f. 15.10.1993).
9 Subs. by Act 48 of 1973, S. 5, for the words “the secretary and treasurer” (w.e.f. 1.7.1974).
10 Subs. by Act 3 of 1994, S. 10 (b) (w.e.f. 15.10.1993).
11 Omitted by Act 3 of 1994, S. 10 (c) (w.e.f. 15.10.1993).
26
(a) a member of a Local Board nominated under clause (c) of sub-section (1) to be the president thereof ; and
(b) a member of a Local Board holding office under clause (b) or nominated under clause (c) of that sub-section to be the vice-president thereof.]
3 {[21A Term of office of members of Local Board.- 4 [ 5 ((1) Subject to the provisions contained in this section and in sub-section (2) of Section 21, a member of a Local Board nominated under clause (c) of sub section (1) of Section 21 shall hold office for such term, not exceeding three years, as the Central Government may specify in this behalf 6 [………] and shall be eligible for re-nomination :
Provided that no such director shall hold office continuously for a period exceeding six years.) ]
(2) 7 [..............].
(3) A director of the Central Board becoming a member of a Local Board by virtue of the provisions of clause (b) of sub-section (1) of section 21 shall cease to hold office as such member on his ceasing to be a director or on his ceasing to be ordinarily resident in the relevant area.
(4) The president and the vice-president of a Local Board shall each hold office for two years or the remaining period of his office as a member of the Local Board, whichever is shorter, and shall be eligible for re-appointment so long as he is a member of the Local Board.
8 [(5) A member of a Local Board nominated under clause (c) of sub-section (1) of section 21 shall hold office during the pleasure of the Central Government.]
9 [21B. Powers of Local Board.- In respect of the area falling within the jurisdiction of the local head office for which the Local Board has been constituted, a Local Board shall, subject 1 Subs. by Act 3 of 1994, S. 10 (d) (w.e.f. 15.10.1993).
2 Subs. by Act 27 of 2010, S. 13(b) for the words “Governer of the Reserve Bank”, (w.e.f.
15.09.2010).
3 Ss. 21A, 21B and 21C ins by Act 35 of 1964, S. 6. (w.e.f. 1.12.1964).
4 Subs. by Act 3 of 1994, S. 22 (a) (Please also see S. 1 (2) of Act 66 of 1988).
5 Subs. by Act 66 of 1988, S. 13 (1)(a). w.e.f. 25-10-99 vide Govt. Notification dt. 25-10-99. (Please also see Act 3 of 1994 S.22(a)).
6 The words “and thereafter until his successor has been duly nominated” omitted by Act 45 of 2006, Sec.15 7 Omitted by Act 3 of 1994, S. 11 (w.e.f. 15.10.1993).
8 Ins. by Act 66 of 1988, S-13 (b). w..e.f. 25-10-99 vide Govt . Notification no dt. 25-10-99.
9 Subs. by Act 27 of 2010, S. 14, (w.e.f. 15.09.2010). The section before its amendment was “21B.
Save as may otherwise be prescribed and subject to any general or special directions which the Central Board may give from time to time, a Local Board shall, in respect of the area *[falling within the jurisdiction] of the local head office for which the Board has been constituted, exercise all powers and perform all functions and duties of the State Bank ** [in relation to the business of banking and the forms of business set out in clauses (a), (b), (e), (f), (g), (h), (i), (k) and (l) of sub-section (1) of section 6 of the Banking Regulation Act, 1949 (10 of 1949), and such other forms of business referred to in sub-section (1) of the said section 6, as may be approved by the Central Board in this behalf and 27 to such general or special direction as the Central Board may give from time to time, exercise such powers and perform such duties and functions as may be entrusted or delegated to it by the Central Board.]
21C. Local Committees.- (1) A Local Committee may be constituted by the Central Board for any area and shall consist of such number of members as may be prescribed.
1 [(2) The Chairman or the managing director nominated by him shall be an ex-officio member of every such Local Committee.]
(3) A Local Committee shall exercise such powers and perform such functions and duties as the Central Board may confer on or assign to it.}
22. Disqualifications for directorship of Central Board or membership of Local Boards or of Committees.- (1) No person shall be qualified to be a director of the Central Board or a member of a Local Board or of a Local Committee if-
(a) he holds the office of director, provisional director, promoter, agent or manager of any banking company already established or advertised as about to be established;
or
(b) he is a salaried officer of Government not specially authorised by the Central Government to be a director or member; or
(c) he has been removed or dismissed from the service of Government on a charge of corruption or bribery; or
(d) he holds any office of profit under the State Bank other than the office of chairman, 2 [***] 3 [managing director 4 (chief general manager) or legal or technical adviser]; or 5 [(da) in the case of a director appointed under clause (ca) or clause (cb) 6 (.........) of Section 19- shall also] exercise such other powers and perform such other functions and duties as may be conferred on or assigned to it by the Central Board.
*** [Provided that a Local Board shall transact the business of borrowing of money and the acquiring, holding, issuing on commission, under-writing and dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments, only if the Central Board approves any of such businesses in this behalf and confers or assigns any of such businesses to the Local Board.]” (*Subs. by Act 3 of 1994, S. 12 (w.e.f. 15.10.1993); ** Subs. by Act 48 of 1973, S.
6. (i) for the words “in relation to any business that may be carried on or transacted by the State Bank under sub-section (1) of section 32 and clauses (i) (excluding the proviso), (ii), (iii), (v) to (ix), (xa),
(xii) to (xv), (xviii), (zixb) and (xixc) of section 33 and shall” (w.e.f. 1.7.1974).; *** Ins. by Act 48 of 1973, S. 6 (ii) (w.e.f.1-7-1974).)
1 Subs. by Act 27 of 2010, S. 15, (w.e.f. 15.09.2010). The subsection before its amendment was “(2) The chairman shall be an ex-officio member of every such Local Committee.” 2 The word “vice-chairman” was omitted by Act 27 of 2010, S. 16, (w.e.f. 15.09.2010).
3 Subs. by Act 26 of 1959, S. 2 (a) for “or managing director”..
4 Subs. by Act 48 of 1973, S. 7. (i) “secretary and treasurer” (w.e.f. 1.7.1974).
5 Ins. by Act 48 of 1973, S. 7 (ii) (w.e.f. 1-7-1974).
6 Omitted by Act 3 of 1994, S. 13. (a) (i) (w.e.f. 15.10.1993).
28
(i) he is not serving in the State Bank or has not been serving in it for a continuous period of at least five years; and
(ii) he is of such age that there is a likelihood of his attaining the age of superannuation during his term of office as a director; or]
(e) he is or at any time has been adjudicated an insolvent or has suspended payment of his debts or has compounded with his creditors; or
(f) he is declared lunatic or becomes of unsound mind; or
(g) he is or has been convicted of any offence involving moral turpitude; or 1 [ (h) in the case of an elected director, he is not registered as a holder in his own right of unencumbered shares in the State Bank, either as sole holder or as first named holder when jointly held, of a nominal value of at least five thousand rupees:]
2 [Provided that in the case of a director appointed under clause (ca) or clause (cb) of section 19, the disqualification mentioned in clause (d) shall not operate;]
(2) No two persons who are partners of the same firm or are directors of the same private company or one of whom is an agent of the other or holds a power of attorney from a firm of which the other is a partner may be directors of the Central Board or members of the same Local Board or Local Committee at the same time.
(3) The appointment, nomination or election as director or member of a Local Board or of a Local Committee of any person who is a member of Parliament or the Legislature of any State shall be void unless within two months of the date of his appointment, nomination or election he ceases to be a member of Parliament or the State Legislature, and if any director or member of a Local Board or of a Local Committee is elected or nominated as a member of Parliament or any State Legislature, he shall cease to be a director or member of the Local Board or of the Local Committee as from the date of such election or nomination, as the case may be, 3 [(4) In this section,-
(a) “banking company” has the same meaning as in the 4 [Banking Regulation Act, 1949 (10 of 1949)];
(b) “manager” means the chief executive officer, by whatever name called, of a banking company;
(c) “private company” has the same meaning as in the Companies Act, 1956 (1 of 1956).]
1 Subs. by Act 27 of 2010, S. 16, (w.e.f. 15.09.2010). The subsection before its amendment was “*[ (h) in the case of an elected director, he is not registered as a holder in his own right of unencumbered shares in the State Bank of a nominal value of at least five thousand rupees :” (*Subs. by Act 3 of 1994, S. 13 (a) (ii) (w.e.f.
15-10-1993).)
2 Ins. by Act 48 of 1973, S. 7 (iii) (w.e.f. 1-7-1974).
3 Ins. by Act 26 of 1959, S. 2 (b).
4 Subs. by Act 3 of 1994, S. 13 (b) (w.e.f. 15.10.1993).
29
23. Vacation of office of directors, etc..- If a director of the Central Board or a member of a Local Board or a Local Committee-
(a) becomes subject to any of the disqualifications mentioned in section 22; or
(b) resigns his office by giving notice in writing under his hand, in the case of 1 [the chairman 2 [***] and a managing director], to the Central Government and in the case of other directors or members of Local Boards or Committees, to the Central Board, and the resignation is accepted; or
(c) is absent without leave of the Central Board, the Local Board or the Local Committee of which he is a director or member, as the case may be, for more than three consecutive meetings thereof, his seat shall thereupon become vacant.
3 [ *****]
24. Removal from office of directors, etc..- (1) The Central Government may, after consulting the Reserve Bank, remove from office 4 [the chairman 5 [***] or a managing director].
6 [(2) * ***]
(3) The Central Government 7 [***] may remove from office any director 8 [appointed under clause (ca) or clause (cb) or nominated under clause (d)] 9 [of section 19] 10 [or any member of a Local Board nominated under clause (c) of sub-section (1) of section 21] and 11 [appoint or nominate as the case may be] in his stead another person to fill the vacancy.
(4) The shareholders, other than the [Central Government] 12 , may, by a resolution passed by majority of the votes of such shareholders holding in the aggregate not less than one-half of the share capital held by all such shareholders, remove any director elected under clause
(c) 13 [..........] of section 19 and elect in his stead another person to fill the vacancy.
(5) 14 [..................].
(6) No person shall be removed from his office under sub-section (1) 15 [.....] or subsection (3) unless he has been given an opportunity of showing cause against his removal.
1 Subs. by Act 73 of 1976, S. 4 (iii) (w.e.f. 11-6-1976).
2 The word “vice-chairman” was omitted by Act 27 of 2010, S. 17, (w.e.f. 15.09.2010).
3 Proviso which was added by Act 21 of 1957, S. 3. omitted by Act 26 of 1959, S. 3.
4 Subs. by Act 73 of 1976, S. 4 (iv) (a) (w.e.f. 11-6-1976).
5 The word “vice-chairman” was omitted by Act 27 of 2010, S. 18, (w.e.f. 15.09.2010).
6 Omitted by Act 73 of 1976, S. 4 (iv) (b) (w.e.f. 11.6.1976).
7 The words “after consulting the Reserve Bank” was omitted by Act 27 of 2010, S. 18, (w.e.f.
15.09.2010).
8 Subs. by Act 48 of 1973, S. 8 (i) for the words “nominated under clause (d)” (w.e.f. 1.7.1974).
9 Subs. by Act 3 of 1994, S. 14 (a) (w.e.f. 15.10.1993).
10 Ins. by Act 35 of 1964, S. 8 (w.e.f. 1-12-1964).
11 Subs. by Act 48 of 1973, S. 8 (ii) for the word “nominate” (w.e.f. 1-7-1974).
12 Subs. by Act 32 of 2007 sec.8 for the words ‘Reserve Bank’ w.e.f. 29.06.2007 13 Omitted by Act 3 of 1994, S. 14 (b) (w.e.f. 15.10.1993).
14 Omitted by Act 3 of 1994, S. 14 (c) (w.e.f. 15.10.1993).
15 Omitted by Act 73 of 1976, S. 4. (iv) (c) (w.e.f. 11.6.1976).
30 1 [24A. Supersession of Central 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 the State Bank being conducted in a manner detrimental to the interest of the depositors or the State Bank or for securing the proper management of the State Bank, it is necessary so to do, the Central Government may, for reasons to be recorded in writing, by order, supersede the Central Board for a period not exceeding six months as may be specified in the order:
Provided that the period of supersession of the Central Board may be extended from time to time, so, however, that the total period shall not exceed twelve months.
(2) On supersession of the Central Board under sub-section (1), the Central Government may, in consultation with the Reserve Bank appoint an Administrator (not being an officer of the Central Government or a State Government) who has experience in law, finance, banking, economics or accountancy, for such period as it may determine.
(3) The Central Government may issue such directions to the Administrator as it may consider necessary and the Administrator shall be bound to follow such directions.
(4) Notwithstanding anything contained in this Act, upon making the order of supersession of the Central Board—
(a) the chairman, managing director 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 Central Board, or by a resolution passed in the general meeting of the State Bank, shall, until the Central Board is reconstituted, be exercised and discharged by the Administrator appointed under sub-section (2):
Provided that the powers exercised by the Administrator shall be valid notwithstanding that such power is also exercisable by a resolution passed in the general meeting of the State Bank.
(5) The Central Government may, in consultation with the Reserve Bank, constitute 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 rules made under this Act.
(7) The salary and allowances of the Administrator and the members of the committee shall be such as may be specified by the rules made under this Act and be payable by the State Bank.
(8) On and before the expiration of two months before the expiry of the period of supersession of the Central Board, the Administrator of the State Bank shall call the general meeting of the State Bank to elect new directors and re-constitute the said Board.
1 Ins. by Act 27 of 2010, S. 19, (w.e.f. 15.09.2010).
31
(9) Notwithstanding anything contained in any other law for the time being in force or in any contract, no person shall be entitled to claim any compensation for the loss or termination of his office on supersession of the Central Board.
(10) The Administrator appointed under sub-section (2) shall vacate office immediately after the re-constitution of the Central Board.]
25. Casual Vacancies.- 1 [(1) If the chairman 2 [***] or a managing director is rendered incapable of discharging his duties by reason of infirmity or otherwise or is absent on leave or otherwise in circumstances not involving the vacation of his office, the Central Government may, in consultation with the Reserve Bank, appoint another person to officiate in the vacancy.]
3 [(2) Where any vacancy occurs before the expiry of the term of office of a director, other than the chairman 4 [***] or a managing director or 5 (a director appointed under clause (ca) or 6 [clause (cb) of section 19 or of a member of a Local Board other than the chief general manager) the vacancy shall be filled-
(a) in the case of an elected director, by election; and
(b) in the case of a director nominated under clause (d) of section 19 or a member of a Local Board nominated under clause (c) of sub-section (1) of section 21, by nomination 7 [***] :
Provided that where the duration of the vacancy in the office of an elected director is likely to be less than six months, the vacancy may be filled by the remaining directors.;]
(3) A person elected or nominated or co-opted, as the case may be, 8 [under sub-section
(2)] shall hold office for the unexpired portion of the term of his predecessor.
9 [(4) Where any vacancy occurs before the expiry of the term of office of a director appointed under clause (ca) or clause (cb) 10 (.........) of section 19, such vacancy shall be filled in accordance with the said clause (ca) or, as the case may be, clause (cb), and the director so appointed shall hold office for the period specified under sub-section (3A) of section 20.]
26. Remuneration of directors.- (1) Without prejudice to the provisions contained in sections 27, 28 and 29, the directors shall be paid such fees and allowances for attending the 1 Subs. by Act 73 of 1976, S. 4 (v) (w.e.f. 11-6-1976).
2 The word “vice-chairman” was omitted by Act 27 of 2010, S. 20(a), (w.e.f. 15.09.2010).
3 Subs. by Act 35 of 1964, S. 9 (w.e.f. 1-12-1964).
4 The word “vice-chairman” was omitted by Act 27 of 2010, S. 20(b), (w.e.f. 15.09.2010).
5 Subs. by Act 48 of 1973, S. 9 (i) for the words “of a member of a Local Board other than the secretary and treasurer” (w.e.f. 1-7-1974).
6 Subs. by Act 3 of 1994, S. 15. (a) (w.e.f. 15.10.1993).
7 The words “in consultation with the Reserve Bank” was omitted by Act 27 of 2010, S. 20(b), (w.e.f.
15.09.2010).
8 Subs. by Act 48 of 1973, S. 9 (ii), for the words “under this section” (w.e.f. 1-7-1974).
9 Ins. by Act 48 of 1973, S. 9 (iii) (w.e.f. 1.7.1974).
10 Omitted by Act 3 of 1994, S. 15 (b) (w.e.f. 15-10-1993).
32 meetings of the Central Board or of any of its committees and for attending to any other work of the State Bank as may be prescribed.
(2) Notwithstanding anything contained in sub-section (1), no fees shall be payable to a managing director or any other director who is an officer of the Central Government or the Reserve Bank.
27. Powers and remuneration of chairman.- (1) The chairman shall preside at all meetings of the Central Board and, subject to such general or special directions as the Central Board may give, exercise all such powers and do all such acts and things as may be exercised or done by the State Bank .
(2) The chairman shall receive such salary, fees, allowances and perquisites 1 [as may be determined by the Central Government.]
2 [ ******] 3 [28. [*****]] Omitted
29. Powers and remuneration of managing director.- (1) A managing director -
(a) shall be a whole-time officer of the State Bank;
4 [***]
(b) subject to the general control of the chairman 5 [***] shall exercise such powers and perform such duties as may be entrusted or delegated to him by the Central Board 6 [; and] 7 [(c) when authorised by the chairman, shall preside at the meetings of the Central Board in his absence.]
(2) A managing director shall receive such salary and allowances 8 [as may be determined by the Central Government.]
1 [*****] 1 Subs. by Act 73 of 1976, S. 4 (vi) (a) (w.e.f. 11.6.1976).
2 Omitted by Act 73 of 1976, S. 4 (vi) (b) (w.e.f. 11-6-1976).
3 Omitted by Act 27 of 2010, S. 21, (w.e.f. 15.09.2010). The section before its amendment was: “28.
Powers and remuneration of vice-chairman.- (1) The vice-chairman shall preside at the meetings of the Central Board in the absence of the chairman and, subject to the general control of the chairman, exercise such powers and perform such duties as may be entrusted or delegated to him by the Central Board.
(2) The vice-chairman shall receive such salary, fees, allowances and perquisites $ [as may be determined by the Central Government.]
$$ [*******]
(3) The fact that the vice-chairman exercises any of the powers and does any act or thing for or on behalf of the State Bank shall be conclusive proof of his authority to do so.” ( $ Subs. by Act 73 of 1976, S. 4 (vii) (a) (w.e.f. 11-6-1976).;
$$ Omitted by Act 73 of 1976, S. 4 (vii)(b) (w.e.f. 11-6- 1976).)
4 The word “and” was omitted by Act 27 of 2010, S. 29(a), (w.e.f. 15.09.2010).
5 The words “and the vice-chairman” was omitted by Act 27 of 2010, S. 29(b), (w.e.f. 15.09.2010).
6 Ins. by Act 27 of 2010, S. 22(b), (w.e.f. 15.09.2010).
7 Ins. by Act 27 of 2010, S. 22(c), (w.e.f. 15.