REGISTERED No. D. 221 The Gazette of India EXTRAORDINARY
PART II—Section 1 PUBLISHED BY AUTHORITY No. 35] NEW DELHI, MONDAY, OCTOBER, 12 1964/ ASVINA 20, 1886 Separate paging is given to this Part in order that it may be filed as a separate compilation MINISTRY OF LAW (Legislative Department) New Delhi, the 12th October, 1964/Asvina 20, 1886 (Saka) The following Act of Parliament received the assent of the President on the 10th October, 1964, and is hereby published for general information: — THE STATE BANK OF INDIA (AMENDMENT) ACT, 1964 No. 35 OF 1964 [10th October, 1964] An Act further to amend the State Bank of India Act, 1955 BE it enacted by Parliament in the Fifteenth Year of the Republic of India as follows: —
1. (1) This Act may be called the State Bank of India (Amendment) Act, 1964.
Short title and commencement(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. In section 2 of the State Bank of India Act, 1955 (hereinafter referred to as the principal Act),— 23 of 1955. Amendment of section 3.
(1) after clause (b), the following clause shall be inserted, namely: — '(bb) "chairman" means the chairman of the Central Board;
(ii) after clause (d), the following clause shall be inserted, namely : — '(dd) "Local Board" means a Local Board constituted under section 21;';
(329) 525 G of I—1 330 THE GAZETTE OF INDIA EXTRAORDINARY [PART II
(iii) after clause (h), the following clause shall be Inserted, namely: — ' (i) "vice-chairman" means the vice-chairman of the Central Board.'.
Amendment of lection 1».
3. In section 19 of the principal Act,—
(a) in sub-section (1) —
(i) in clause (a), the words, "except in the case of first appointments," shall be omitted;
(li) for clauses (c) and (d), the following clauses shall be substituted, namely : — "(bb) the presidents of the Local Boards appointed under sub-section (5) of section 21, ex-officio;
(c) if the total amount of the holdings of the shareholders, other than the Reserve Bank, whose names are on the principal register three months before the date fixed for election of directors is—
(i) not more than ten per cent, of the total issued capital, two directors,
(ii) more than ten per cent, but not more than twenty-five per cent, of such capital, three directors, and (Hi) more than twenty-five per cent, of such capital, four directors, to be elected in the prescribed manner by such shareholders;
(d) not less than two and not more than six directors to be nominated by the Central Government in consultation with the Reserve Bank, 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;";
(b) sub-sections (2) and (3) shall be omitted.
Amendment of section
4. In section 20 of the principal Act,—
(a) in sub-section (2), the words "or, in the case of the first two appointments, the Central Government," shall be omitted;
SEC. 1] THE GAZETTE OF INDTA EXTRAORDINARY 331
(b) for sub-section (5), the following sub-section shall be substituted, namely: — "(5) The following provisions shall have effect in relation to directors nominated under clause (d) of subsection (1) of section 19, to the Central Board reconstituted for the first time on or after the commencement of the State Bank of India (Amendment) Act, 1964, namely: —
(i) if the number of such directors holding office at the end of one year from the date of such reconstitution is not more than three, then one of such- directors, and if such number exceeds three, then two of them, shall retire at the end nf the said year;
(it) if the number of such directors holding office at the end of two years from the date of such reconstitution is not more than three, then one of such directors, and if such number is four, then two of them, shall retire at the end of the safd two years;
(Hi) if the number of such directors holding office at the end of three years from the date of such reconstitution is not more than two, then one of such directors shall retire at the end of the said three years;
(iv) any such director holding office for a period of four years from the dale of such reconstitution shall retire at the end of such period;
(v) the director or directors to retire at the end of each year under clauses (0 , (ii) and (Hi) shall be determined by lot.".
5. For section 21 of the principal Act, the following section shall he substituted, namely : — Substitution of now section for section 21.
"21. (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: — Local Boards.
(o) the chairman, ex-officio;
(b) all such directors elected or nominated to the Central Board under clause (c) or clause (d) of sub-section (1) 332 THE GAZETTE OF INDIA EXTRAORDINARY [PART IT of section 19 as are ordinarily resident in the area served by the branch register of the local head office;
(c) six members to be nominated by the Central Government in consultation with the Reserve Bank;
(d) one member to be elected in the prescribed manner by the shareholders, other than the Reserve Bank, whose names are entered in the branch register of the local head office, tf the total holdings of such shareholders amount to two and a half per cent, or more of the total Issued capital:
Provided that a person elected as a member of a Local Board under this clause shall not cease to be a member thereof for reason only that the total holdings as aforesaid fall below two and a half per cent of the total issued capital, at any time after his election;
(e) the secretary and treasurer of the local head office, appointed by the State Bank, ex-officlo.
(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 served by the branch register 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) or clause (d) of sub-section (1) and is ordinarily resident in the erea served by the branch register 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 Board and shall on becoming such member be deemed to have been nominated or, as the case may be, elected 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 I,ocal Board under sub-section (2) shall be deemed to be a casual' vacancy and be filled in accordance with the provisions of section 25, SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 333
(4) Notwithstanding anything contained in clause (d) of sub-section (1),—
(a) on the reconstitutlon of an existing Local Board for the first time on or after the commencement of the State Bank of India (Amendment) Act, 1964, or
(b) on the constitution of a new Local Board under sub-section (2) of which an elected member of an existing Local Board does not in pursuance of that sub-section become a member, the Reserve Bank shall nominate a member in place of the member to be elected under that clause and such nominated member shall be deemed to have been elected under the said clause.
(5) The Governor of the Reserve Bank shall, in consultation with the chairman, appoint—
(a) a member of a Local Board nominated or elected under clause (c) or clause (d) of sub-section (I) to be the president thereof, and
(b) a member of a Local Board holding office under clause (b) or nominated or elected under clause (c) or clause (d) of that sub-section to be the vice-president thereof.".
6. After section 21 of the principal Act, the following sections shall be inserted, namely: — Insertion of new sections 21A, 21B and 21C.
"21 A. (J) 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 or elected under clause (d) of that sub-section shall hold office for two years and thereafter until his successor has been duly nominated or elected and shall be eligible for re-nomination or re-election, as the case may be:
Term of office of members of Local Board.
Provided that out 'of the six members nominated under clause (c) of sub-section (1) of section 21, on the constitution of a new Local Board or the reconstitution of an existing Local Board for the first time on or after the commencement of the State Bank of India (Amendment) Act, 1964, three shall retire at the end of one year and three shall retire at the end of two years from the date of the constitution or, as the case may be, reconstitutlon of that Local Board, and the members to retire at the end of the first year shall be determined by lot.
334 THE GAZETTE OF INDIA EXTRAORDINARY [FART II
(2) A member of a Local Board nominated by the Reserve Bank under sub-section (4) of ^ction 21 shall retire at the expiry of one year from the date of such nomination.
(3) A director of the Central Board becoming a member of a Local Board by virtue of the provisions of clause (b) of subsection (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, Powers of Local Board.
2IB. 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 served by the branch register of the local head office for which the Board has been constituted, exercise all powers and perform all functions and duties of the Stats? Bank in relation to eny 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), (Hi), (v) to (ix), (xa), (xii) to
(xv), (xvii), (xviii), (xixb) and (xixc) of section 33 and shall exercise such other powers and perform such other functions and duties as may be conferred on or assigned to it by the Central Board- Local Committees.
21C. (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.
(2) The chairman 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.".
Amendment of section
22.
7. In section 22 of the principal Act, in sub-section (1),—
(a) in clause (d), after the words "managing director,", the words "secretary and treasurer," shall be inserted:
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 335
(b) for the proviso, the following proviso shall be substituted, namely: — "Provided that in the case of a member of Local Board nominated by the Reserve Bank under sub-section (4) of section 21, the disqualification mentioned in clause (h) shall not operate for a period of six months from his becoming such member.".
8. In section 24 of the principal Act, in sub-section (3), after the word and figures "section 19", the words, brackets, letter end figures "or any member of a Local Board nominated under clause (c) of sub-section (1) of section 21" shall be inserted.
Amendment of section
24.
9. In section 25 of the principal Act, for sub-section (2), the following sub-section shall be substituted, namely: — " (2) Where any vacancy occurs before the expiry of the term of office of a director, other than the chairman, vicechairman or a managing director or of a member of a Local Board other than the secretary and treasurer, the vacancy shall be filled— Amendment of section
25.
(a) in the case of an elected director or member, by election; and
(b) in the case of a director nominated under clause
(d) of sub-section (2) of section 19 or a member of a Local Board nominated under clause (c) of sub-section (1) of section 21, by nomination in consultation with the Reserve Bank:
Provided that where the duration of the vacancy in the office of an elected director or member is likely to be less than six months, the vacancy may be filled by the remaining directors or members, as the case may be, by co-opting a person not disqualified under section 22.".
10. After section 31 of the principal Act, the following section shall be inserted in Chapter V, namely: — Insertion of new section after section 31.
Meetings of Local Boards.
"31A. (1) A Local Board shall meet at such time and place and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.
(2) All questions at the meeting shall be decided by a majority of the votes of the members present and in the case of equality of votes, the person presiding at the meeting shall have a second or casting vote.
336 THE GAZETTE OF INDIA EXTRAORDINARY [PAST II
(3) A member who is directly or indirectly concerned or interested in any contract, loan, arrangement or proposal entered into or proposed to be entered into by or on behalf of the State Bank, shall, at the earliest possible opportunity, disclose the nature of his Interest to the Local Board and shall not be present at any meeting of the Local Board when any such contract, loan, "arrangement or proposal is discussed unless his presence is required by the other members for the purpose of eliciting information, and no member so required to be present shall vote on any such contract, loan, arrangement or proposal:
Provided that nothing contained in this sub-section shall apply to such member by reason only of his being—
(i) a shareholder (other than a director) holding not more then two per cent, of the paid-up capital in any public company as defined in the Companies Act, 1956, or any corporation established by or under any law for the time being in force in India or any co-operative society, with which or to which the State Bank has entered into or made or propose* to enter into or make, a contract, loan, arrangement or proposal; or 1 of 1956
(ii) a director ex-officio of the State Bank or a director of a subsidiary bank.
(4) If for any reason neither the president nor the vicepresident is able to be present at a meeting of the Local Board, eny member, other than the secretary and treasurer, elected by the members present from amongst themselves, shall preside at the meeting.
(5) Notwithstanding anything contained in this section, the chairman shall preside at any meeting of a Local Board at which he is present and In the absence of the chairman, the vicechairmen, if he is a member of the Local Board, shall, whenever he is present, preside at such meeting.".
Amendment of section S3.
Amendment of section W.
11. In section 33 of the principal Act, in clause (xixb), for tht words "seven years", the words "ten years" shall be substituted.
12. In section 36 of the principal Act, to sub-section (1), the following proviso shall be added, namely: — "Provided that if the balance in the Integration and Development Fund on the date of declaration of any dividends by the State Bank is rupees five crores or more, no amount shall be paid into that Fund under clause (a) <and the dividends payable to the Reserve Bank shall be paid to that Bank; and K such balance &CC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 337 on such date is less than rupees five erores, only so much of the dividends then payable as will bring such balance to rupees five erores shall be paid into that Fund and the balance of such dividends shall be paid to the Reserve Bank.".
13. In section 41 of the principal Act, in clause (a) of sub-section
(7), for the words "a true and correct view", the words "a true and fair view" shall be substituted.
Amendment of section 41.
14. Section 43 of the principal Act shall be re-numbered as subsection (I) thereof and after sub-section (1) as so re-numbered, the following sub-section shall be inserted, namely :— Amendment of section 43 "(2) The officers, advisers and employees of Lhe State Bank shall exercise such powers and perform such duties as may be entrusted or delegated to them by the Central Board.".
15. Section 48 of the principal Act shall be omitted.
16. In Section 50 of the principal Act, in sub-section (2),—
(a) for clause (d), the following clause shall be substituted, namely: — Omission of section
48.
Amendment of section 60 "(d) the powers, functions and duties of Local Boards and the restrictions, conditions or limitations, if any, subject to which they may be exercised or performed, the formation and constitution of Local Committees (including the number of members of any such Committee) and of committees of Local Boards, the powers, functions and duties of such Committees, the holding of meetings of Local Committees and committees of Local Boards and the conduct of business thereat;";
(b) in clause (f), after the words "the Central Board", the words "or of Local Boards" shall be inserted;
(c) clause (h) shell be omitted.
17. When the Central Board is reconstituted for the first time under the provisions of section 19 of the principal Act as amended by this Act— Special provisions as to directors.
(a) the chairman and the vice-chairman of the Central Board end the managing directors of the State Bank holding office as such immediately before such reconstitution shall continue to hold their respective offices after such reconstitution for the unexpired portion of the term of their office;
338 THE GAZETTE OF INDIA EXTRAORDINARY [PABT II SEC. 1]
(b) all the directors of the Central Board deemed to be elected under the proviso to clause (c) of sub-section (1) of section 19 of the principal Act or nominated under clause (d) of that sub-section end holding office as such immediately before such reconstitution shall be deemed to have vacated their respective offices on such reconstitution; and the remaining directors elected under clause (c), and the directors nominated under clauses (e) and (f), of the said sub-section (1) shall continue to hold office after such reconstitution until their successors are duly elected under clause (c) or, as the case may be, nominated under clauses (e) and (f), of sub-section (1) of section 19 of the principal Act es amended by this Act.
Vacation of office by members of Local Boards.
28. On the reconstitution of any Local Board for the first time under the principal Act as amended by this Act, all members of that Local Board holding office under clause (a) of sub-section (1) of section 21 of the principal Act or elected or nominated under clause (b) of that sub-section and holding office as such immediately before such reconstitution, shall be deemed to have vacated their offices on such reconstitution.
R. C. S. SARKAR, Secy, to the Govt, of India.
PRINTED IN INDIA BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATION, DELHI, 1964