(1) Each of the following societies, that is to say, the Hyderabad State Co-operative Bank Limited, and the Hyderabad Central Co-operative Land Mortgage Bank Limited (hereinafter in this Act referred to as “the existing societies”), shall be reconstituted in the manner hereinafter appearing.
(2) From the areas of operations of each of the existing societies, the following territories shall be excluded, namely:-
(a) the territories comprised in the talukas of Bidar, Humnabad, Bhalki and Santpur of Bidar district, the talukas of Raichur, Manvi, Sindhnur, Gangawathi, Kopbal, Yelbarga, Kushtagi, Lingsugur and Devdurg of Raichur district, and the talukas of Gulbarga, Chitapur, Yadgir, Shahpur, Shorapur Jiwargi, Afzalpur, Aland Chincholi and Sedam of Gulbarga district (hereinafter in this Act referred to as the Karnataka area);
(b) the territories comprised in the districts of Aurangabd, Parbhani, Nanded, excluding Kuber, Mudhol and Bhainsa revenue circles of Mudhol taluka and Jukkal and Bichkonda revenue circles of Deglur taluka of Nanded district, Osmanabad and Bhir and the talukas of Nilanga, Ahmedpur and Udgir of Bidar district, Islapur revenue circle of Boath taluka and Kinwat and Rajura talukas of Adilabad district (hereinafter referred to as the Marathwada area).
(3) The proposals for the reconstitution of the existing societies under section 3 shall, inter alia, provide-
(a) In relation to the Karnataka area-
(i) for the disaffiliation from the existing societies of the member-societies within that area;
(ii) for the affiliation of the said member societies to the corresponding societies of the Mysore State, that is to say, the Mysore State Co-operative Bank Limited or, as the case may be, the Mysore Central Co-operative Land Mortgage Bank Limited, registered under the Mysore Co-operative Societies Act; and
(iii) for the transfer of the relative portion of the assets and liabilities of the existing societies to the said corresponding Mysore societies;
(b) In relation to the Marathwada area-
(i) for the disaffiliation from the existing societies of the member-societies within that area;
(ii) either for the affiliation of the the member-societies to the corresponding societies of Co-Bombay State, that is to say, the Bombay State Co-operative Bank Limited, or as the case may be, the Bombay State Co-operative Land Mortgage Bank Limited, registered under the Bombay Co-operative Societies Act, or for the formation and registration of a corresponding new society or societies for that area with the societies disaffiliated under sub-clause (i) as its or their members, as the Government may, by notification in the Official Gazette, direct; and
(iii) for the transfer of the relative portion of the assets and liabilities from the existing societies to the said corresponding Bombay societies or, as the case may be, the corresponding new society or societies.