THE STATE BANK OF INDIA ACT, 1955 ACT NO. 23 OF 1955 1* [8th May, 1955.] WHER 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. CHAP PRELIMINARY CHAPTER I PRELIMINARY 1. Short title and commencement. 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 2*** as the Central Government may, by notification in the Official Gazette, appoint. 2. Definitions. 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; 3*[(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 (7 of 1920), 3*[(dd) "Local Board" means a Local Board constituted under section 21;] ---------------------------------------------------------------------- 1. The Act has been extended to Dadra and Nagar Haveli (w.e.f. 1-7- 1965) by Reg. 6 of 1963, s. 2 and Sch. I; to Pondicherry (w.e.f. 1-10-1963) by Reg. 7 of 1963, s. 3 and Sch. I; and to Goa, Daman and Diu by Reg. 11 of 1963, s. 3 and Sch. 2. 1st July, 1955, see Notification No. S.R.O. 1077, dated the 14th May, 1955, Gazette of India, Pt. II, Sec. 3, p. 869. 3. Ins. by Act 35 of 1964, s. 2 (w.e.f. 1-12-1964). 106 (e) "prescribed" means 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); (g) "State Bank" means the State Bank of India constituted under this Act; 1*[(h) "subsidiary bank" menas a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);] 2*[(i) "vice-chairman" means the vice-chairman of the Central Board;] 3*[(j) "workman" has the meaning assigned to it in the Industrial Disputes Act, 1947 (14 of 1947).] CHAP INCORPORATION AND SHARE CAPITAL OF STATE BANK CHAPTER II INCORPORATION AND SHARE CAPITAL OF STATE BANK 3. Establishment of the 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 Reserve Bank, 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 that 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. 4. Authorised capital.- Subject to the provisions of this Act, the authorized capital of the State Bank shall be twenty crores of rupees divided into 4*[two crores] of fully paid-up shares of 4*[ten rupees] each: Provided that the Central Government may increase or reduce the authorized capital as it thinks fit so however that the shares in all cases shall be fully paid-up shares of 4*[ten rupees] each. 5. Issued capital. 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 ---------------------------------------------------------------------- 1. Ins. by Act 38 of 1959, s. 64 and Sch. III (w.e.f. 10-9-1959). 2. 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 3 of 1994, s. 2 (w.e.f. 15-10-1993). 5. Subs. by s. 2, ibid., for "one hundred rupees" (w.e.f. 15-10-1993). 107 divided into five lakhs, sixty-two thousand and five hundred shares, all of which shall, on the appointed day, stand allotted to the Reserve Bank in lieu of the shares of the Imperial Bank 1*[transferred to and vested in it under section 6]. (2) 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. (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. CHAP TRANSFER OF UNDERTAKING OF THE IMPERIAL BANK TO STATE BANK CHAPTER III TRANSFER OF UNDERTAKING OF THE IMPERIAL BANK TO STATE BANK 6. Transfer of assets and liabilities of the Imperial Bank to the StateBank. 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 shares 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 that 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. 2*[(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 sub- ---------------------------------------------------------------------- 1. Subs. by Act 33 of 1955, s. 2, for "transferred to it by paragraph 2 of the First Schedule" (with retrospective effect). 2. Subs. by s. 3, ibid., for the original sub-section (3) (with retrospective effect). 108 sisting 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 ImperialBank to 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 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. 109 (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. 110 8. Existing provident and other funds of the Imperial Bank. 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; and (e) the Bank of Madras Officers Provident and Mutual Guarantee Fund; 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 shareholders of Imperial Bank. 9. Compensation to be given to shareholders 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. CHAP SHARES CHAPTER IV SHARES 10. Transferability of 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 Reserve Bank 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 fifty-five per cent. of the issued capital of the State Bank. 11. Restrictions on voting rights. 1*[11. Restrictions on voting rights.- No shareholder, other than the Reserve Bank, shall be entitled to exercise voting rights in respect of any shares held by him in excess of ten per cent. 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."] ---------------------------------------------------------------------- 1. Subs. by Act 3 of 1994, s. 3, for s.11 (w.e.f. 15-10-1993). 111 12. Shares to be approved securities. 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 India Trusts Act, 1882 (2 of 1882), and also to be approved securities for the purposes of the Insurance Act, 1938 (4 of 1938), and the [Banking Regulation Act, 1949 (10 of 1949),] 13. Register of shareholders. 2*[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. (2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the State Bank to keep the register of shareholders in computer floppies or diskettes subject to such safeguards as may be prescribed. (3) Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1871), a copy of, or extract from, the register of shareholder, 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. Subs. by Act 3 of 1994 s. 4, for certain words (w.e.f. 15-10-1993). 2. Subs. by s. 5, ibid., for s. 15 (w.e.f. 15-10-1993). 112 1* * * * * 15. Trusts not to be entered on the register of shareholders. 3*[15. Trusts not to be entered on the register of shareholders.- No notice of any trust, express, implied or constructive, shall be entered on the register of shareholders or be receivable by the State Bank.] CHAP MANAGEMENT CHAPTER V MANAGEMENT 16. Offices, branches and agencies. 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 Bombay. (2) The State Bank shall have local head offices in Bombay, Calcutta and Madras 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 3*[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 ---------------------------------------------------------------------- 1. Omitted by Act 3 of 1994, s. 14 s. 6 (w.e.f. 15-10-1993). 2. Subs. by s. 7, for s. 15 ibid. (w.e.f. 15-10-1993). 3. Ins. by Act 33 of 1955, s. 4 (with retrospective effect). 113 additional branches are to be 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. 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. 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 given by the Central Government shall be given through the Reserve Bank 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. 19. Composition of the Central Board.- 2*** The Central Board shall consist of the following, namely:-- (a) a chairman and a vice-chairman to be appointed by the Central Government in consultation with the Reserve Bank 3***; (b) not more than two managing directors, if any, appointed 4*[by the Central Government in consultation with the Reserve Bank]; 5*[(bb) the presidents of the Local Boards appointed under sub-section (5) of section 21, exofficio; (c) if the total amount of the holdings of the share holders, other than the Reserve Bank, whose names are on the ---------------------------------------------------------------------- 1. Ins. by Act 38 of 1959, s. 64 and Sch. III (w.e.f. 10-9-1959). 2. Omitted by Act 3 of 1994, s. 8 (w.e.f. 15-10-1993). 3. Certain words omitted by Act 73 of 1976, s. 4 (w.e.f. 11-6-1976). 4. Subs. by s. 4, ibid., for certain words (w.e.f. 11-6-1976). 5. Subs. by Act 35 of 1964, for cls. (c) and (d) (w.e.f. 1-12-1964). 114 1*[register of shareholders] 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 (iii) more than twenty-five per cent. of such capital, four directors, to be elected in the prescribed manner by such shareholders; 2*[(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 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;] (e) one director to be nominated by the Central Government: and (f) one director to be nominated by the Reserve Bank. 3* * * * * * 20. Term of office of chairman, managing director, etc. 20. Term of office of chairman, managing director, etc.- (1) 4*[The chairman, vice-chairman 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. 5*[(1A) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the term ---------------------------------------------------------------------- 1. Subs. by Act 3 of 1994, s. 8 (w.e.f. 15-10-1993). 2. Ins. by Act 48 of 1973, s. 3 (w.e.f. 1-7-1974). 3. Sub-sections (2) and (3) omitted by Act 35 of 1964, s. 3 (w.e.f. 1-12-1964). 4. Subs. by Act 73 of 1976, s. 4, for "The chairman and the vice- chairman" (w.e.f. 11-6-1976). 5. Ins. by s. 4, ibid. (w.e.f. 11-6-1976). 115 of office of the chairman, vice-chairman 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, vice-chairman 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.] 1* * * * * (3) Subject to the provisions contained in section 19 2***, a director elected under clause (c) 3*** 4*[that section] shall hold office for 4*[three years] and thereafter until his successor shall have been duly elected 2*** and shall be eligible for re-election 5***: 5*[Provided that no such director shall hold office continuously for a period exceeding six years.] 6*[(3A) 4*[Subject to the provisions contained in sub-section (4), a director] appointed under clause (ca) or clause (cb) 7*[of section on nominated under clause (d) of that section] shall hold office for such hold office for such term, not exceeding three years, as the Central Government may specify and thereafter until his successor shall have been 4*[duly appointed or nominated], and shall be eligible 4*[for re-appointment or re-nomination, as the case may be]:] 5*[Provided that no such director shall hold office continuously for a period exceeding six years.] 8*[(4) A director appointed under clause (ca) or clause (cb) 7*[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]. 9* * * * * ---------------------------------------------------------------------- 1. Sub-section (2) omitted by Act 73 of 1976, s. 4 (w.e.f. 11-6- 1976). 2. Certain words omitted by Act 66 of 1988, s. 12 (w.e.f. 8-7-1992). 3. Certain words omitted by Act 3 of 1994, s. 9 (w.e.f. 15-10-1993) 4. Subs. by Act 66 of 1988, s. 12, for certain words (w.e.f. 8-7-1992). 5. Ins. by s. 12, ibid. (w.e.f. 8-7-1992). 6. Ins. by Act 48 of 1973, s. 4 (w.e.f. 1-7-1974). 7. Subs. by Act 3 of 1994, s. 9, for certain words (w.e.f. 15-10-1993). 8. Subs. by Act 66 of 1988 s. 12 for sub-section (4) (w.e.f 8-7-1992). 9. Sub-section (5) omitted s. 12, ibid. (w.e.f. 8-7-1992). 116 21. Local Boards. 1*[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:-- (a) the chairman, ex-officio; 2*[(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 in consultation with the Reserve Bank; 3* * * * * (e) 4*[the chief general manager] of the local head office, appointed by the State Bank, ex-officio. ---------------------------------------------------------------------- 1. Subs. by Act 35 of 1964, s. 5, for s. 21 (w.e.f. 1-12-1964). 2. Subs. by Act 3 of 1994, s. 10, for cl. (b) (w.e.f. 15-10-1993). 3. Cl. (d) omitted by s. 10, ibid. (w.e.f. 15-10-1993). 4. Subs. by Act 48 of 1973, s. 5, for "the secretary and treasurer" (w.e.f. 1-7-1974). 117 1*[(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 sub-section (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 Board 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. 2* * * * * 3*[(5) The Governor of the Reserve Bank shall, in consultation with the chairman, appoint-- (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.] ---------------------------------------------------------------------- 1. Subs. by Act 3 of 1994, s. 10, for sub-section (2) (w.e.f. 15-10-1993). 2. Sub-section (4) omitted by s. 11, ibid. (w.e.f. 15-10-1993). 3. Subs. by s. 10, ibid., for sub-section (5) (w.e.f. 15-10-1993). 118 21A. Term of office of members of Local Board. 1*[ Term of office of members of Local Board.- 2*[(1) Subject to the provisions contained in this section and in sub-section (2) of section 21, a member of a Local Board-- (a) 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 and thereafter until his successor has been duly nominated; (b) elected under clause (d) of sub-section (1) of section 21 shall hold office for three years and thereafter until his successor has been duly elected, and shall be eligible for re-nomination or re-election, as the case may be: Provided that no such director shall hold office continuously for a period exceeding six years.] 3* * * * * (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 reappointment so long as he is a member of the Local Board. 4*[(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.] 21B. Powers of Local Board. 21B. Powers of Local Board.- 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 5*[falling within the jurisdicition] shall of the local head office for which the Board has been constituted, exercise all powers and perform all functions and ---------------------------------------------------------------------- 1. Ins. by Act 35 of 1964, s. 6 (w.e.f. 1-12-1964). 2. Subs. by Act 66 of 1988 s. 13, for sub-section (1) (w.e.f. ). 3. Sub-section (2) omitted by Act 3 of 1994 s. 11 (w.e.f. 15-10-1993). 4. Ins. by Act 66 of 1988, s. 13 (w.e.f. .......). 5. Subs. by Act 3 of 1994, s. 12, for certain words (w.e.f. 15-10-1993). 119 duties of the State Bank 1*[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 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: 2*[Provided that a Local Board shall transact the businesses 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.] 21C. Local Committees. 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. (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.] 22. Disqualifications for directorship of Central Board or membership ofLocal Boards or Committees. 22. Disqualifications for directorship of Central Board or membership of Local Boards or 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 ---------------------------------------------------------------------- 1. Subs. by Act 48 of 1973, s. 6, for certain words (w.e.f. 1-3- 1977). 2. Ins. by s. 6, ibid. (w.e.f. 1-3-1977). 120 (d) he holds any office of profit under the State Bank other than the office of chairman, vice-chairman, 1*[managing director, 2*[3*[chief general manager],] or legal or technical adviser]; or 4*[(da) in the case of a director appointed under clause (ca) or clause (cb) 7**** of section 19,-- (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 6*[(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: 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.] ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1959, s. 2, for "or managing director". 2. Ins. by Act 35 of 1964, s. 7 (w.e.f. 1-12-1964). 3. Subs. by Act 48 of 1973, s. 7, for "secretary and treasurer" (w.e.f. 1-7-1974). 4. Ins. by s. 7, ibid. (w.e.f. 1-7-1974). 5. Certain words omitted by Act 3 of 1994 s. 13 (w.e.f. 15-10-1993). 6. Subs. by s. 12, ibid., for cls. (h) (w.e.f. 15-10-1995). 121 (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. 1*[(4) IN this section,-- (a) "banking company" has the same meaning as in the 2*[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)] 23. Vacation of office of directors, etc. 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 the 3*[chairman, vice-chairman 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. ---------------------------------------------------------------------- 1. Ins. by Act 26 of 1959, s. 2. 2. Subs. by Act 3 of 1994, s. 13, for certain words (w.e.f. 15-10-1993). 3. Subs. by Act 73 of 1976, s. 4, for "chairman and vice-chairman". 122 1* * * * * 24. Removal from office of directors, etc. 24. Removal from office of directors, etc.- (1) The Central Government may, after consulting the Reserve Bank, remove from office 2*[the chairman, vice-chairman or a managing director]. 3* * * * * (3) The Central Government, after consulting the Reserve Bank, may remove from office any director 4*[appointed under clause (ca) or clause (cb) or nominated under clause (d)] 5*[of section 19] 6*[or any member of a Local Board nominated under clause (c) of sub-section (1) of section 21] and 7*[appoint or nominate, as the case may be,] in his stead another person to fill the vacancy. (4) The shareholders, other than the Reserve Bank, 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 8*** of section 19 and elect in his stead another person to fill the vacancy. 9* * * * * (6) No person shall be removed from his office under sub-section (1) 1*** or sub-section (3) unless he has been given an opportunity of showing cause against his removal. 25. Casual vacancies. 25. Casual vacancies.- 8*[(1) If the chairman, vice-chairman 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 ---------------------------------------------------------------------- 1. Proviso added by Act 21 of 1957, s. 3, omitted by Act 26 of 1959, s. 3. 2. Subs. by Act 73 of 1976, s. 4, for "the chairman or the vicechairman" (w.e.f. 11-6-1976). 3. Sub-section (2) omitted by s. 4, ibid., (w.e.f. 11-6-1976). 4. Subs. by Act 43 of 1973, s. 8, for "nominated under clause (d)" (w.e.f. 1-7-1974). 5. Subs. by Act 3 of 1994 s. 14 (w.e.f. 15-10-1993). 6. Ins. by Act 35 of 1964, s. 8 (w.e.f. 1-12-1964). 7. Subs. by Act 48 of 1973, s. 8, for "nominate" (w.e.f. 1-7-1974). 8. Certain words omitted by Act 3 of 1994 s. 14 (w.e.f. 15-10-1993). 9. Sub-section omitted by s. 14, ibid. (w.e.f. 15-10-1993). 10. The words brackets and figure "or sub-section (2)" omitted by Act 73 of 1976, s. (w.e.f. 11-6-1976). 11. Subs. by s. 4, ibid., for sub-section (1) (w.e.f. 11-6-1976). 123 involving the vacation of his office, the Central Government may, in consultation with the Reserve Bank, appoint another person to officiate in the vacancy.] 1*[(2) Where any vacancy occurs before the expiry of the term of office of a director, other than the chairman, vice-chairman or a managing director or 2*[a director appointed under clause (ca) or 3*[clause (cb) of section 19 or of a member of a Local Board other othan 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 in consultation with the Reserve Bank: 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] by-optig a person not disqualified under section 22. (3) A person elected or nominated or co-opted, as the case may be 4*[under sub-section (2)] shall hold office for the unexpired portion of the term of his predecessor. 5*[(4) Where any vacancy occurs before the expiry of the term of office of a director appointed under clause (ca) or clause (cb) 5*** 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. 26. Remuneration of directors. -(1) Without preiudice to the provisions contained in sections 27 28 and 29 the directors shall be paid such fees and allowances for attending the meetings of the Central Board or of any of its ---------------------------------------------------------------------- 1. Subs. by Act 35 of 1964, s. 9, for sub-section (2) (w.e.f. 1-12- 1964). 2. Subs. by Act 48 of 1973, s. 9. for certain words (w.e.f. 1-7- 1974). 3. Subs. by Act 3 of 1994, s. 15, for certain words (w.e.f. 15-10-1993). 4. Subs. by s. 9. ibid. for "under this section" (w.e.f. 1-7-1974). 5. Ins. by s. 9, ibid., (w.e.f. 1-7-1974). 6. Certain words omitted by Act 3 of 1994, s. 15 (w.e.f. 15-10-1993). 124 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. 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* * * * * 28. Powers and cremuneration of vice-chairman. 28. Powers and cremuneration 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 perquisities 1*[as may be determined by the Central Government]. 2* * * * * (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. 29. Powers and remuneration of managing director. 29. Powers and remuneration of managing director.-(1) A managing director-- (a) shall be a whole-time officer of the State Bank; and (b) subject to the general control of the chairman and the vice-chairman, shall exercise such powers and perform such duties as may be entrusted or delegated to him by the Central Board. (2) A managing director shall receive such salary and allowances 1*[as may be determined by the Central Government]. 2* * * * * ---------------------------------------------------------------------- 1. Subs. by Act 73 of 1976, s. 4, for certain words (w.e.f. 11-6- 1976). 2. Proviso omitted by s. 4, ibid. (w.e.f. 11-6-1976). 125 30. Exceutive and other committees of the Central Board. 30. Exceutive and other committees of the Central Board.- The Central Board may constitute such and so many committees, including an executive committee, of itself as it deems fit to exercise such powers and perform such duties as may, subject to such conditions, if any, as the Central Board may impose, be delegated to them by the Central Board. Meetings of the Central Board. 31. (1) The Central 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. Meetings of the Central Board. (2) All questions at the meeting shall be decided by a majority of the votes of the directors present and in the case of equality of votes, the chairman or, in his absence, the vice-chairman shall have a second or casting vote. (3) A director 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 Central Board and shall not be present at any meeting of the Central Board when any such contract, loan, arrangement or proposal is discussed unless his presence is required by the other directors for the purpose of eliciting information, and no director so required to be present shall vote on any such contract, loan, arrangement or proposal: 1*[Provided that nothing contained in this sub-section shall apply to such director by reason only of his being-- (i) a shareholder (other than a director) holding not more than two per cent. of the paid-up capital in any public company as defined in the Companies Act, 1956 (1 of 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 proposes to enter into or make, a contract, loan, arrangement or proposal; or (ii) a director ex officio of the State Bank or a director of a subsidiary bank;] 2*[or] ---------------------------------------------------------------------- 1. Ins. by Act 56 of 1962, s. 2. 2. Ins. by Act 48 of 1973, s. 10 (w.e.f. 1-7-1974). 126 1*[(iii) an officer or other employee of the State Bank, if he is a director appointed under clause (ca) or clause (cb) of 5*xxx of section 19.] (4) If for any reason neither the chairman nor the vice-chairman is able to be present at a meeting of the Central Board, any director, 3*** authorised by the chairman in writing in this behalf, and in the absence of such authorization, 4*[any director] elected by the directors present from amongst themselves, shall preside at the meeting and, in the event of equality of votes, shall have a second or casting vote. 31A. Meetings of Local Boards. 4*[31A. Meetings of Local Boards.-(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. (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 than two per cent. of the paid-up capital in any public company as defined in the Companies Act, 1956 (1 of 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 ---------------------------------------------------------------------- 1. Ins. by Act 48 of 1973, s. 10 (w.e.f. 1-7-1974). 2. Certain words omitted by Act 3 of 1994, s. 16 (w.e.f. 15-10-1993). 3. The words "other than a managing director", omitted by s. 10, ibid. (w.e.f. 1-7-1974). 4. Subs. by s. 10, ibid., for "any such director" (w.e.f. 1-7-1974). 5. Ins. by Act 35 of 1964, s. 10 (w.e.f. 1-12-1964). 127 made or proposes to enter into or make, a contract, loan, arrangement or proposal, or (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 vice- president is able to be present at a meeting of the Local Board, any member, 1*[other than the chief general manager], 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 vice-chairman, if he is a member of the Local Board, shall, whenever he is present, preside at such meeting. CHAP BUSINESS OF THE STATE BANK CHAPTER VI BUSINESS OF THE STATE BANK 32. State Bank to act as agent of the Reserve Bank. 32. State Bank to act as agent of the Reserve Bank.-(1) The State Bank shall, if so required by the Reserve Bank, act as agent of the Reserve Bank at all places in India where it has a branch 2*[or where there is a branch of a subsidiary bank], and where there is no branch of the banking department of the Reserve Bank, for-- (a) paying, receiving, collecting and remitting money, bullion and securities on behalf of any Government in India; and (b) undertaking and transacting any other business which the Reserve Bank may from time to time entrust to it. (2) The terms and conditions on which any such agency business shall be carried on by the State Bank on behalf of the Reserve Bank shall be such as may be agreed upon. (3) If no agreement can be reached on any matter referred to in sub-section (2) or if a dispute arises between the State Bank and the Reserve Bank as to the interpretation of any agreement between them, the matter shall be referred to the Central Government and the decision of the Central Government thereon shall be final. ---------------------------------------------------------------------- 1. Subs. by Act 48 of 1973, s. 11, for "other than the secretary and treasurer" (w.e.f. 1-7-1974). 2. Ins. by Act 38 of 1959, s. 64 and Sch. III (w.e.f. 10-9-1959). 128 (4) The State Bank may transact any business or perform any functions entrusted to it under sub-section (1) 1*[by itself or through a subsidiary bank] or through an agent approved by the Reserve Bank. 33. Other business which the State Bank may transact. 2*[33. Other business which the State Bank may transact.- Subject to the other provisions contained in this Act, the State Bank may carry on and transact the business of banking as defined in clause (b) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) and may engage in one or more of the other forms of business specified in sub- section (1) of section 6 of that Act.] 34. Business which the State Bank may not Transact. 34. Business which the State Bank may not Transact.- 3*** (6) Save as otherwise provided in 4*[this Act], the State Bank shall not own or acquire any 5*** immovable property except for the purpose of providing buildings or other accommodation in which to carry on the business of the State Bank or for providing residences for its officers and other employees: Provided that if any such building or other accommodation is not immediately required for any of the purposes of the State Bank, the State Bank may utilize it to the best advantage by letting it out or in any other manner. 35. State Bank may acquire the business of other Banks. 35. State Bank may acquire the business of other Banks.-(1) The State Bank may, with the sanction of the Central Government, and shall, if so directed by the Central Government in consultation with the Reserve Bank, enter into negotiations for acquiring the business, including the assets and liabilities, of any banking institution. 6*[(2) The terms and conditions relating to such acquisition, if agreed upon by the Central Board of the State Bank and the directorate or management of the banking institution concerned and approved by the Reserve Bank, shall be submitted to the Central Government for its sanction and that Government may by order in writing (hereafter in this section referred to as the order of sanction) accord its sanction thereto. ---------------------------------------------------------------------- 1. Subs. by Act 38 of 1959, s. 64 and Sch. III, for "either by itself" (w.e.f. 10-9-1959). 2. Subs. by Act 48 of 1973, s. 12, for section 33 (w.e.f. 1-3-1977). 3. Sub-sections (1), (2), (3) and (5) omitted by s. 13, ibid. (w.e.f. 1-3-1977). 4. Subs. by Act 56 of 1962, s. 2, for "section 33". 5. The words "interest in" omitted by s. 2, ibid. 6. Subs. by Act 26 of 1959, s. 6, for sub-sections (2), (3) and (4). 129 (3) Notwithstanding anything contained in this Act or any other law for the time being in force or any instrument regulating the constitution of the banking institution concerned, the terms and conditions as sanctioned by the Central Government shall come into effect on the date specified by the Central Government in this behalf in the order of sanction and be binding upon the State Bank and the banking institution as well as upon the shareholders (or, as the case may be, proprietors) and creditors of that banking institution. (4) If for any reason the terms and conditions cannot come into effect on the date specified in the order of sanction, the Central Government may fix another suitable date for that purpose. (5) On the date on which the terms and conditions as aforesaid come into effect the business and the assets and liabilities of the banking institution concerned as covered by the acquisition shall, by virtue, and in accordance with the provisions, of the order of sanction stand transferred to, and become respectively the business and the assets and liabilities of, the State Bank. (6) The consideration for the acquisition of the business and the assets and liabilities of any banking institution under this section may, if so agreed upon, be paid either in cash or by allotment of shares in the capital of the State Bank or partly in cash and partly by allotment of shares, and the State Bank may, for the purpose of any such allotment, increase, subject to the other provisions contained in this Act relating to the increase of capital, the capital of the State Bank by the issue of such number of shares as may be determined by the State Bank. (7) Any business acquired under this section shall thereafter be carried on by the State Bank in accordance with the provisions of this Act, subject to such exemptions or modifications as the Central Government may, by notification in the Official Gazette, make in this behalf in consulation with the Reserve Bank: Provided that no such exemption or modification shall be made so as to have effect for a period of more than seven years from the date of acquisition. (8) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any other law or in any agreement for the time being in force, on the acquisition of the business and the 130 assets and liabilities of any banking institution under this section, no officer or other employee of that banking institution shall be entitled to any compensation to which he may be entitled under that Act or that other law or that agreement and no claim in respect of such compensation shall be entertained by any court, tribunal or other authority, if on his having accepted in writing an offer of employment by the State Bank on the terms and conditions proposed by it he has been employed in accordance with such terms and conditions. (9) The Central Government may, if it considers necessary or expedient in the case of any banking institution in relation to which an order of sanction has been made under this section, appoint, whether before or after the coming into effect of the terms and conditions relating to the acquisition of the business and the assets and liabilities of that banking institution, a suitable person to take over the management of that banking institution for the purposes of winding up its affairs and distributing its assets, and the expenditure incurred in connection with such management (including the remuneration for the person so appointed and his staff, if any) shall be paid out of the assets of the banking institution or by the State Bank as the Central Government may direct. (10) Simultaneously with the appointment of a suitable person to take over the management of any banking institution under sub-section (9) or immediately thereafter, the Central Government shall issue directions to be followed by that person in the management of that banking institution for the purposes aforesaid and thereupon-- (a) the provisions of the Companies Act, 1956(1 of 1956), or the 1*[Banking Regulation Act, 1949] (10 of 1949) or any other law for the time being in force or any instrument having effect by virtue of any such Act or law, in so far as they are inconsistent with such directions, shall cease to apply to or in relation to that banking institution; (b) all persons in charge of the management, including any person holding office as manager or director of the banking institution immediately before the issue of such directions, shall be deemed to have vacated their offices as such; and (c) the person appointed to take over the management of the banking institution shall in accordance with those ---------------------------------------------------------------------- 1. Subs. by Act 3 of 1994, s. 17, for certain words (w.e.f. 15-10-1993). 131 directions take all such steps as may be necessary to facilitate the winding up of its affairs and distribution of its assets. (11) The Central Government, when satisfied that nothing further remains to be done in order to wind up the affairs of any such banking institution, may by another order in writing direct that as from such date as may be specified therein the banking institution shall stand dissolved and thereupon any such direction shall have effect notwithstanding anything to the contrary contained in any other law. (12) No action under this section shall be questioned on the ground merely of any defect in the constitution of any banking institution in relation to which such action has been taken or in the constitution of its Board of Directors or in the appointment of any person entrusted with the management of its affairs. (13) In this section "banking institution" includes any individual or any association of individuals (whether incorporated or not, or whether a department of Government or a separate institution), carrying on the business of banking.] 35A. Arrangement with the State Bank on appointment of directors toprevail. 1*[35A. Arrangement with the State Bank on appointment of directors to prevail.- (1) Where any arrangement entered into by the State Bank with a company provides for the appointment by the State Bank of one or more directors of such company, such provisions and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956 ( 1 of 1956), or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to the company, and any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the State Bank in pursuance of the arrangement as aforesaid. (2) Any director appointed as aforesaid shall-- (a) hold office during the pleasure of the State Bank and may be removed or substituted by any person by order in writing of the State Bank; (b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto; (c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.] CHAP FUNDS, ACCOUNTS AND AUDIT CHAPTER VII FUNDS, ACCOUNTS AND AUDIT 36. Integration and development fund. 36. Integration and development fund.- (1) The State Bank shall maintain a special fund to be known as the Integration and Development Fund into which shall be paid-- (a) the dividends payable to the Reserve Bank on such shares of the State Bank held by it as do not exceed fifty- five per cent. of the total issued capital; and (b) such contributions as the Reserve Bank or the Central Government may make from time to time: 2*[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 if such balance on such date is less ---------------------------------------------------------------------- 1. Ins. by Act 1 of 1984, s. 43 (w.e.f. 15-2-1984) 2. Added by Act 35 of 1964, s. 12 (w.e.f. 1-12-1964). 132 than rupees five crores, only so much of the dividends then payable as will bring such balance to rupees five crores shall be paid into that Fund and the balance of such dividends shall be paid to the Reserve Bank.] (2) The amount in the said Fund shall be applied exclusively for meeting-- (a) losses in excess of such yearly sum as may be agreed upon between the Reserve Bank and the State Bank and attributable to the branches established in pursuance of sub-section (5) of section 16; 1* 2*[(aa) subsidies granted by the State Bank to a subsidiary bank with the approval of the Reserve Bank; and] (b) such other losses or expenditure as may be approved by the Central Government in consultation with the Reserve Bank. (3) Subject to the provisions of sub-section (2), the said Fund shall be the property of the Reserve Bank and no shareholder or the State Bank or any other person shall have any claim to the amount held in the said Fund. 3*[(4) No amount applied for any of the purposes specified in sub-section (2) shall, for the purposes of the 4*[Income tax Act, 1961 (43 of 1961)] be treated as income, profits or gains of the State Bank.] 37. Reserve Fund. 37. Reserve Fund.-The State Bank shall establish a Reserve Fund which shall consist of-- (a) the amount held in the Reserve Fund of the Imperial Bank transferred to the State Bank on the appointed day; and (b) such further sums as may be transferred to it by the State Bank out of its annual net profits before declaring a dividend. 38. Disposal of profits. 38. Disposal of profits.- (1) After making provision for bad and doubtful debts, depreciation in assets, equalisation of dividends, contribution to staff and superannuation funds and for all other matters for which provision ---------------------------------------------------------------------- 1. The word "and" omitted by Act 38 of 1959, s. 64 and Sch. III (w.e.f.10-9-1959). 2. Ins. by ibid. s. 64 and Sch. III (w.e.f. 10-9-1959). 3. Ins. by Act 26 of 1959, s. 7. 4. Subs. by Act 3 of 1994, s. 18, for certain words (w.e.f. 15-10-1993). 133 is necessary by or under this Act or which are usually provided for by banking companies, the State Bank may, out of its net profits, declare a dividend. (2) Subject to the provisions of paragraph 6 of the First Schedule, the rate of dividend shall be determined by the Central Board. 39. Books to be balanced each year. 39. Books to be batlanced each year. The Central Board shall cause the books of the State Bank to be closed, and balanced 1*[as] on the 31st of December 2*[or such other date in each year as the Central Government may, by notification in the Official Gazette, specify] year: 3*[Provided that with a view to facilitating the transition from one period of accounting to another period of accounting under this section, the Central Government may, by order published in the Official Gazette, make such provisions as it considers necessary or expedient for the closing and balancing of, or for other matters relating to, the books in respect of the concerned years.] 40. Returns. 40. Returns. (1) The State Bank shall furnish to the Central Government and to the Reserve Bank 4*[within three months from the 31st day of December 5*[or the date specified under section 39, as the case may be] shall as on which its books are closed and balanced] its balance sheet, together with the profit and loss account and the 6*[auditors' report and a report by the Central Board on the working and activities of the State Bank"] during the period covered by the accounts: 7*[Provided that the Central Government may, after consultation with the Reserve Bank, extend the said period of three months by such further period, not exceeding three months, as it may think fit.] (2) The balance sheet and the profit and loss account shall be signed by the chairman, vice-chairman, managing directors, if any, and a majority of the other directors. (3) The State Bank shall also, within two months from the date on which its accounts are closed and balanced, transmit to the Central Government and the Reserve Bank a statement showing, as far as may be available, the name, address and occupation off, and the number of shares held by, each shareholder of the State Bank as on the said date. 6*[(4) The Central Government shall cause the auditors' report and the report by the Central Board on the working and activities of the State Bank to be laid, as soon as may be after they are received, before each House of Parliament 9***.] 41. Audit. 41. Audit. (1) The affairs of the State Bank shall be 4*[audited by two or more auditors] duly qualified to act as auditors of companies under 11*[section 226 of the Companies Act, 1956 (1 of 1956), who shall be appointed by the Reserve Bank in consultation with the Central Government. ---------------------------------------------------------------------- 1. Ins. by Act 48 of 1973, s. 14 (w.e.f. 31-12-1973). 2. Subs. by Act, 66 of 1988, s. 14, for certain words (w.e.f. 30-12-1988). 3. Ins by s. 14, ibid. (w.e.f. 30-12-1988). 4. Subs. by Act 48 of 1973 s. 15, ibid., for certain words (w.e.f. 31-12-1973). 5. Ins. by Act 66 of 1988 s. 15, ibid (w.e.f. 30-12-1988). 6. Subs. by Act 1 of 1984, s. 44, for certain words (w.e.f. 15-2-1984). 7. Ins. by Act 48 of 1973, s. 15, ibid. (w.e.f. 31-12-1973). 8. Ins. by Act 1 of 1984, s. 44 (w.e.f. 1984). 9. Omitted by Act 81 of 1985 s. 3 (w.e.f. 1-5-1986). 10. Subs. by s. 16, ibid., for certain words (w.e.f. 31-12-1973). 11. Subs. by Act 26 of 1959, s. 8 for "sub-section (1) of section 144 of the Indian Companies Act, 1913". 133A (2) The auditors shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government. (3) An auditor may be a shareholder but no director or member of a Local Board or of a Local Committee or an officer of the State Bank shall be eligible to be an auditor during his continuance in office as such director, member or officer. (4) An auditor shall on relinquishing office be eligible for reappointment. (5) The auditors shall severally be, and continue to act as, auditors until the 1*[annual] general meeting after their respective appointment, and if any vacancy arises before the expiry of the term of office of an auditor, the vacancy may be filled by the Reserve Bank. (6) Every auditor shall be supplied with a copy of the annual balance sheet and profit and loss account, and a list of all books kept by the State Bank, and it shall be the duty of the auditor to examine the balance sheet and profit and loss account with the accounts and vouchers relating therto, and in the performance of his duties, the auditor-- (a) shall have, at all reasonable times, access to the books, accounts and other documents of the State Bank; (b) may, at the expense of the State Bank, or if he is appointed by the Central Government, at the expense of the Central Government, employ accountants or other persons to assist him in investigating such accounts; and (c) may, in relation to such accounts, examine any director or any member of a Local Board or of Local Committee or any officer of the State Bank. (7) The auditors shall make a report to the Central Government upon the annual balance sheet and accounts, and in every such report they shall state-- (a) whether, in their opinion, the balance sheet is a full and fair balance sheet containing all the necessary particulars and properly drawn up so as to exhibit 2*[a true and ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1959, s. 8, for "first". 2. Subs. by Act 35 of 1964, s. 13, for "a true and correct view" (w.e.f. 1-12-1964). 133B fair view] of the affairs of the State Bank, and in case they have called for any explanation or information, whether it has been given and whether it is satisfactory; (b) whether or not the transactions of the State Bank which have come to their notice have been within the powers of the State Bank; (c) whether or not the returns received from the offices and branches of the State Bank have been found adequate for the purpose of their audit; (d) whether the profit and loss account shows a true balance of 1*[profit of loss] for the period covered by such account; and (e) any other matter which they consider should be brought to the notice of the shareholders or the Central Government, as the case may be. 2*[Explanation 1.--For the purposes of this Act,-- (a) the balance sheet shall not be treated as not disclosing a true and fair view of the affairs of the State Bank, and (b) the profit and loss account shall not be treated as not showing a true balance of profit or loss for the period covered by such account, merely by reason of the fact that the balance sheet or, as the case may be, the profit and loss account, does not disclose any matters which are, by the provisions of the Banking Regulation Act, 1949 (10 of 1249), read with the relevant provisions of this Act, not required to be disclosed. Explanation 2.--For the purposes of this Act, the accounts of the State Bank shall not be deemed as having not been properly drawn up on the ground merely that they do not disclose certain matters if-- (i) those matters are such as the State Bank is, by virtue of any provision contained in the Banking Regulation Act, 1949 (10 of 1949), read with the relevant provisions of this Act, or any other Act, not required to disclose; and ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1959, s. 8, for "profit and loss". 2. Ins. by Act 48 of 1973, s. 16 (w.e.f. 1-12-1964). 133C (ii) the provisions referred to in clause (i) are specified in the balance sheet and profit and loss account of the State Bank or in the auditors' report.] (8) The auditors shall also forward a copy of the audit report to the State Bank. (9) Without prejudice to anything contained in the foregoing provisions, the Central Government may appoint at any time such auditors as it thinks fit to examine and report on the accounts of the State Bank. 42. Balance sheet, etc., of State Bank may be discussed at generalmeeting. 42. Balance sheet, etc., of State Bank may be discussed at general meeting.-(1) A general meeting (1*[in this Act] referred to as annual general meeting (shall be held 2*[in each year] at such time and at such place where there is a local head office of the State Bank 3*** and a general meeting may be convened by the State Bank at any other time: 4*[Provided that such annual general meeting shall be held before the expiry of six weeks from the date on which the balance sheet, together with the profit and loss account and auditors' report, is under sub-section (1) of section 40, forwarded to the Central Government or to the Reserve Bank, whichever date is earlier.] (2) The shareholders present at an annual general meeting shall be entitled to discuss the balance sheet and the profit and loss account of the State Bank made up to the previous 31st day of December 5*[or the date specified under section 39, as the case may be] the report of the Central Board on the working 6*[and activities] of the State Bank for the period covered by the accounts and the auditors' report on the balance sheet and accounts. CHAP MISCELLANEOUS CHAPTER VIII MISCELLANEOUS 43. State Bank may appoint officers and or other employees. 43. State Bank may appoint officers and or other employees.- 5*[(1)] The State Bank may appoint such number of officers, advisers and employees as it considers necessary or desirable for the efficient performance of its functions, and determine the terms and conditions of their appointment and service. ---------------------------------------------------------------------- 1. Subs. by Act 26 of 1959, s. 9, for "hereinafter". 2. Ins. by Act 48 of 1973, s. 17 (w.e.f. 31-12-1973). 3. The words "before the end of March in each year" omitted by s. 17 ibid. (w.e.f. 31-12-1973). 4. Subs. by s. 17, ibid. (w.e.f. 31-12-1973). 5. Ins. by Act 66 of 1988, s. 16 (w.e.f. 30-12-1988). 6. Ins. by Act 1 of 1984, s. 45 (w.e.f. 15-2-1984). 7. S. 43 renumbered as sub-section (1) of that section by Act 35 of 1964, s. 14 (w.e.f. 1-12-1964). 133D 1*[(2) The officers, advisers and employees of the State Bank shall exercise such powers and perform such duties 2*[as may, by general or special order, be] trusted or delegated to them by the Central Board.] 43A. Bonus. 3*[43A. Bonus.-(1) No. officer, adviser or other employee [other than an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act 1965 (21 or 1965)] of the State Bank shall be entitled to be paid any bonus. (2) No employee of the State Bank, being an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act, 1965, (21 of 1965.) shall be entitled to be paid any bonus except in accordance with the provisions of that Act. (3) The provisions of this section shall have effect notwithstanding any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in any other provision of this Act or in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force or any practice, usage or custom or any contract, agreement, settlement, award or other instrument.] 44. Obligation as to fidelity and secrecy. 44. Obligation as to fidelity and secrecy.- (1) The State Bank shall observe, except as otherwise required by law, the practices and usages customary among bankers, and, in particular, it shall not divulge any information relating to or to the affairs of its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the State Bank to divulge such information. (2) Every director, member of a Local Board or of a Local Committee, auditor, adviser, officer or other employee of the State Bank shall, before entering upon his duties, make a declaration of fidelity and secrecy as in the form set out in the Second Schedule. 45. Bar to liquidation of State Bank. 45. Bar to liquidation of State Bank.- No provision of law relating to the winding up of companies shall apply to the State Bank, and the State Bank shall not be placed in liquidation save by order of the Central Government and in such manner as it may direct. 46. Indemnity of directors and members of Local Board and LocalCommittees, etc. 46. Indemnity of directors and members of Local Board and Local Committees, etc.- (1) Every director and every member of a Local Board or a Local Committee shall be indemnified by the State Bank against all losses and expenses incurred by him in or in relation to the discharge of his duties except such as are caused by his own wilful act or default. (2) Neither a director nor a member of a Local Board or a Local Committee shall be responsible for any loss or expense caused to the State Bank by the insufficiency or deficiency of the value of or title to any property or security acquired or taken on behalf of the State Bank or by the insolvency or wrongful act of any customer or debtor or by anything done in or in relation to the execution of the duties of his office or otherwise than for his wilful act or default. 47. Defects in appointment or constitution not to invalidate acts orproceedings. 47. Defects in appointment or constitution not to invalidate acts or proceedings. (1) No act or proceeding of the Central Board or of a Local Board or a Local Committee shall be questioned on the ground merely of the existence of any vacancy or defect in the constitution of the Board or Committee, as the case may be. ---------------------------------------------------------------------- 1. Ins. by Act 35 of 1964 s. 14, (w.e.f. 1-12-1964). 2. Subs. by Act 1 of 1984, s. 46, for certain words (w.e.f. 15-2-1984). 3. Ins. by Act 64 of 1984, s. 2. 133E (2) All acts done by any person acting in good faith as a director or as a member of a Local Board or of a Local Committee shall, notwithstanding that there was some defect in this appointment or qualifications, be as valid as if he was a director of the Central, Board or a member of the Local Board or the Local Board or the Local Committee, as the case may be. 48. [Repealed.] 48. [Power to remove difficulties.] Rep. by the State Bank of India (Amendment) Act, 1964 (35 of 1964), s. 15 (w.e.f. 1-2-1964). 49. Power of Central Government to make rules. 49. Power of Central Government to make rules.- (1) The Central Government, in consultation with the Reserve Bank, may, by notification in the Official Gazette, 1*[make rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provision of this Act]. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for-- (a) the procedure for the payment of compensation 2* under this Act; (b) the determination of persons to whom the said compensation shall be payable in all cases, including cases where shares in the Imperial Bank have been held by more than one person, or where they have been transferred before the appointed day but the transfer has not been registered or where the shareholder is dead; 3*[(c) the manner of appointment of a director under clause (ca) or clause (cb) 4*** of section 19, and all other matters connected therewith or incidental thereto.] 4*[(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.] 50. Power of Central Board to make regulations. 50. Power of Central Board to make regulations.-(1) The Central Board may, after consultation with the Reserve Bank and with the previous sanction of the Central Government 5*[,by notification in the official Gazette] make regulations, not inconsistent with this Act and the rules made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of this Act. ---------------------------------------------------------------------- 1. Subs. by Act 48 of 1973, s. 18q, for certain words (w.e.f. 31-12- 1973). 2. For the State Bank (Compensation on Imperial Bank Shares) Rules, 1955. see Gazette of India, Extraordinary, Part II, Sec. 3 page 1409. 3. Ins. by Act 48 of 1973, s. 18 (w.e.f. 31-12-1973). 4. Ins. by Act 1 of 1984, s. 47 (w.e.f. 15-12-1984). 5. Ins. by Act 66 of 1988, s. 17 (w.e.f. 30-12-1988). 6. Certain words Omitted by Act 3-6-1994, s. 19 (w.e.f. 15-10-1993). 133F (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for-- (a) the nature of shares of the State Bank, the manner in which and the conditions subject to which shares may be held and transferred and generally all matters relating to the rights and duties of shareholders; 1*[(b) the maintenance of register of shareholders, and the particulars to be entered in such register in addition to those specified in section 13, the safeguards to be observed in the maintenance of register of shareholders on computer floppies or diskettes, the inspection and closure of the register of shareholders and all other matters connected therewith;] (c) the holding and conduct of elections under this Act, including the allocation of elected directors to the various areas 2*[falling within the jurisdiction of each local head office] and the final determination of doubts or disputes regarding the qualifications of candidates for election or regarding the validity of elections; 3*[(ca) the determination of areas falling within the jurisdiction of each local head office;] 4*[(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;] (e) the fees and allowances which may be paid to directors, or members of Local Boards or Local Committees for attending any meetings of the Central Board or of its committees or of the Local Boards or Local Committees, as the case may be, or for attending to any other work of the State Bank; (f) the manner in which the business of the Central Board 5*[or of Local Boards] shall be transacted and the procedure to be followed at the meetings thereof; (g) the formation of committees of the Central Board and the delegation of powers and functions of the Central Board ---------------------------------------------------------------------- 1. Subs. by Act 3 of 1994, s. 20, for cl. (a) (w.e.f. 15-10-1993). 2. Subs. by S. 20, ibid. for certain words (w.e.f. 15-10-1993). 3. Ins. by s. 20 ibid. (w.e.f. 15-10-1993). 4. Subs. by Act 35 of 1964, s. 16, for cl. (d) (w.e.f. 1-12-1964). 5. Ins. by Act 35 of 1964, s. 16 (w.e.f. 1-12-1964). 133G to such committees and the conduct of business in such committees; 1* * * * * (i) the manner in which general meetings shall be convened, the procedure to be followed thereat and the manner in which voting rights may be exercised; (j) the holding of meetings of shareholders 2*** and the business to be transacted thereat; (k) the manner in which notices may be served on behalf of the State Bank upon shareholders or other persons; (l) the provision of seals for the State Bank and the manner and effect of their use; (m) the conduct and defence of legal proceedings and the manner of signing pleadings; (n) the duties and conduct of officers, other employees, advisers and agents of the State Bank; 3*[(o) the establishment and maintenance of superanuation pension, provident or other funds for the benefit of the employees of the State Bank or of the dependants of such employees or for the purposes of the State Bank, and the granting of superannuation allowances, annuities and pensions payable out of any such fund;] (p) the form and manner in which contracts binding on the State Bank may be executed; 4*[(q) the terms, conditions, stipulations, restrictions and limitations, if any, in the transaction by the State Bank of its businesses in regard to the advancing or lending of money or the discounting or purchase of any instrument, negotiable or otherwise, with or without reference to any security, purpose, amount, period or otherwise;] (r) the conditions subject to which alone, advances may be made to directors, members of Local Boards or of Local Committees or officers of the State Bank, or the relatives of such directors, members or officers or to companies, firms or individuals with which or with whom such directors, members, officers, or relatives are connected as ---------------------------------------------------------------------- 1. Cl. (h) omitted by Act 35 of 1964, s. 16 (w.e.f. 1-12-1964). 2. Omitted by Act 3 of 1994, s. 20 (w.e.f. 15-10-1993). 3. Subs. by Act 26 of 1959, s. 10, for the former clause. 4. Subs. by Act 48 of 1973, s. 19, for clause (q) (w.e.f. 31-12- 1973). 133H partners, directors, managers, servants, shareholders or otherwise; (s) the statements, returns, and forms that are required for the purposes of this Act; (t) the payment of dividends, including interim dividends; (u) generally for the conduct of the business of the State Bank. 1*[(2A) All regulations made under this section shall have effect from such earlier or late date as may be specified in the regulations.] (3) Notwithstanding anything contained in this section, the first regulations shall be made by the Reserve Bank with the previous sanction of the Central Government, and thereupon shall be deemed to be the regulations made by the Central Board under this section and shall have force accordingly until they are amended or repealed. 2*[(4) Every regulation shall, as soon as may be after it is made under this Act by the Central Board, be forwarded to the Central Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it is in session, for a total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.] 51. Requirements of foreign law to be complied with in certain cases. 3*[51. Requirements of foreign law to be complied with in certain cases.- If, according to the laws of any country outside India, the provisions of this Act by themselves are not effective to transfer to and vest in the State Bank any asset or liability which forms part of the undertaking of the Imperial Bank and which is situate in that country, the Imperial Bank shall take all such steps as may be required by the laws of that country for the purpose of effecting or perfecting such transfer and vesting, and in connection therewith the Imperial Bank may realise any asset and discharge any liability and transfer the net proceeds thereof to the State Bank.] 52. [Repealed.] 52. [Amendment of Act 2 of 1934.] Rep. by the Repealing and Amending Act, 1960 (58 of 1960), s. 2 and Sch. I. 53. [Repealed.] 53. [Amendment of Act 10 of 1949.] Rep. by s. 2 and Sch. I, ibid. 54. [Repealed.] 3*54. [Amendment of Act 47 of 1920.] Rep. by s. 2 and Sch. I ibid. 55. No proceding to lie in India against Imperial Bank after appointedday. 4*[55. No proceding to lie in India against Imperiali Bank after appointed day.-On and from the appointed day, no person shall make any claim or demand or take any proceeding in India against the Imperial Bank or a director, officer or other employee thereof in his capacity as such director, officer or employee except in so far as may be ---------------------------------------------------------------------- 1. Ins. by Act 48 of 1973, s. 19 (w.e.f. 31-12-1973). 2. Ins. by Act 1 of 1984, s. 48 (w.e.f. 15-2-1984). 3. Subs. by Act 33 of 1955, s. 5, for the original section (with retrospective effect). 4. Ins. by s. 6, ibid. (with retrospective effect). 133I necessary for enforcing the provisions of this Act or except in so far as it relates to any offence committed by any such director, officer or employee. 56. Refernces to the Imperial Bank, the Bank of Bengal etc., in otherlaws. 56. References to the Imperial Bank, the Bank of Bengal etc., in other laws.- On and from the appointed day, any reference to the Imperial Bank or to the Bank of Bengal, the Bank of Madras or the Bank of Bombay in any law (other than this Act or the Imperial Bank of India Act, 1920) (47 of 1920.) or in any contract or other instrument shall, except as otherwise provided in any general or special order made by the Central Government be deemed to be a reference to the State Bank. 57. Dissolution of Imperial Bank, etc. 57. Dissolution of Imperial Bank, etc.- (1) On such day as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Imperial Bank shall stand dissolved, and the Imperial Bank of India Act, 1920 (47 of 1920), shall stand repealed. (2) On the day specified in the notification under sub-section (1), the State Bank shall pay to the Reserve Bank a sum of ten lakhs of rupees. (3) If, on the day specified in the notification under sub- section (1), the Imperial Bank has in its possession or custody any assets created on or after the appointed day, such assets shall be disposed of in accordance with directions issued by the Central Government in this behalf.]