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National Bank for Agriculture and Rural Development Act, 1981


Second Schedule

Amendments to Certain Enactments

Part I

Amendments to the Reserve Bank of India Act, 1934

(2 OF 1934)

Amendments

1.     In section 2,-

(a) clauses (a), (ai), (bi), (bii), (biii), (biv), (bv), (bviii), (ci), (cia), (cii), (ciii), (civ), (cv) and (f) shall be omitted;
(b) after clause (cc) , the following clause shall be inserted, namely:-

‘(ccc) “National Bank” means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agricultureand Rural Development Act, 1981;’;

(c) after clause (g), the following clauses shall be inserted, namely:-

“(h) “agricultural operations”, “central co-operative bank”, “co-operative society”,

“crops”, “marketing of crops”, “pisciculture”, “regional rural bank” and “State cooperative bank” shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981;

(i) “co-operative bank”, “co-operative credit society”, “director”, “primary agricultural credit society”, “primary co-operative bank” and “primary credit society” shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949;”

2.     In section 8, in sub-section (2) , after the existing proviso, the following proviso shall be inserted, namely : -

“Provided further that the Central Government may, in consultation with the Bank, appoint a Deputy Governor as the Chairman of the National Bank, on such terms and conditions as that Government may specify .”

3.     In section 17 ,-

(a) for clause (4AA) , the following clause shall be substituted, namely: -

“(4AA) the making of annual contributions to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981”;;

(b) for clause (4E) , the following clause shall be substituted, namely:-

“ (4E) the making to the National Bank of loans and advances repayable on demand or on the expiry of fixed period not exceeding eighteen months from the date of making of the loan or advance, either-

(i) against the security of stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by any law for the time being in force in India; or

(ii) on such other terms and conditions as the Bank may specify”;;

(c) in clause (8A), for the expression “Agricultural Refinance and Development Corporation”, the expression “National Bank” shall be substituted.

4.     For sub-section (3) of section 33, the following sub-section shall be substituted, namely:-

“(3) The remainder of the assets shall be held in rupee coin, Government of India rupee securities of any maturity, promissory notes drawn by the National Bank for any loans or advances under clause (4E) of section 17 and such bills of exchange and promissory notes payable in India as are eligible for purchase by the Bank under sub clause

(a) or sub-clause (b) or sub-clause (bb) of clause (2) of section 17 or under clause (1) of section 18.”

5.     In section 42,-

(a) in the Explanation occurring after sub-section (1), in sub-clause (ii) of clause (c), for the expression “ Agricultural Refinance and Development Corporation”, the expression “National Bank” shall be substituted;

(b) after sub-section (6) , the following sub-section shall be inserted, namely : -

“(6A) In considering whether a State co-operative bank or a regional rural bank should be included in or excluded from the Second Schedule, it shall be competent for the Bank to act on a certificate from the National Bank on the question whether or not a State co-operative bank or a regional rural bank, as the case may be, satisfies the requirements as to paid-up capital and reserves or whether its affairs are not being conducted in a manner detrimental to the interests of its ‘depositors.”.

6.     Appointment of Agents.- For section 45, the following section shall be substituted, namely :-

“45. (1) Unless otherwise directed by the Central Government with reference to any place, the Bank may, having regard to public interest, convenience of banking, banking development and such other factors which in its opinion are relevant in this regard, appoint the National Bank, or the State Bank, or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, or any subsidiary bank as defined
in the State Bank of India (Subsidiary Banks) Act, 1959, as its agent at all places, or at any place in India for such purposes as the Bank may specify.

(2) When any bank is appointed by the Bank as its agent under sub-section (1) to receive on behalf of the Bank any payment required to be made into the Bank, or any bill, hundies or other securities required to be delivered into the Bank, under any law or rule, regulations or other instructions having the force of law, the same may be paid or delivered into the bank so appointed as the agent of the Bank.”.

7.     Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund.- On and from the date appointed under sub-section (1) of section 18, of the National Bank for Agriculture and Rural Development Act, 1981, for sections 46A and 46B, the following section shall be substituted, namely: -

“46A. The Bank shall contribute every year such sums of money as it may consider necessary and feasible to do so, to the National Rural Credit (Long-Term Operations) Fund and the National Rural National Credit (Stabilisation) Fund established and maintained by the National Bank under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981"

8.     Rural credit and development.- For section 54, the following section shall be substituted, namely :-

“54. the Bank may maintain expert staff to study various aspects of rural credit and development and in particular it may,-

(a) tender expert guidance and assistance to the National Bank;

(b) conduct special studies in such areas as it may consider necessary to do so for promoting integrated rural development.”.

Part II

Amendments to the Banking Regulation Act, 1949

(10 of 1949)

Amendments

1.     In section 5,-

(i) after clause (h) , the following clause shall be inserted , namely :-

‘(ha) “National Bank” means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981;’;

(ii) after clause (j) , the following clause shall be inserted, namely :-

‘(ja) “regional rural bank” means regional rural bank established under section 3 of the Regional Rural Banks Act, 1976;’.

2.     In section 23, after sub-section (4) , the following sub-section shall be inserted , namely:-

“ (4A) Any regional rural bank requiring the permission of the Reserve Bank under this section shall forward its application to the Reserve Bank through the National Bank which shall give its comments on the merits of the application and send it to the Reserve Bank:

Provided that the regional rural bank shall also send an advance copy of the application directly to the Reserve Bank.”.

3.     In section 24, to sub-section (3), the following proviso shall be added, namely:-

“Provided that every regional rural bank shall also furnish a copy of the said return to the National Bank.”.

4.     In section 25, to sub-section (2) , the following proviso shall be added, namely:-

“Provided that every regional rural bank shall also furnish a copy of the said return to the National Bank”.

5.     In section 26, after the existing proviso, the following proviso shall be inserted, namely :-

“Provided further that every regional rural bank shall also furnish a copy of the said return to the National Bank.”.

6.     In section 27, after sub-section (2) the following sub-section shall be inserted, namely:-

“(3) Every regional rural bank shall submit a copy of the return which it submits to the Reserve Bank under sub-section (1) also to the National Bank and the powers exercisable by the Reserve Bank under sub-section (2) may also be exercised by the National Bank in relation to regional rural banks.”.

7.     Power to publish information.- For section 28, the following section shall be substituted, namely:-

“28. The Reserve Bank or the National Bank, or both, if they consider it in the public interest so to do, may publish any information obtained by them under this Act in ,such consolidated form as they think fit.”.

8.     In section 31, after the existing proviso, the following proviso shall be inserted, namely:-

“Provided further that a regional rural bank shall furnish such returns also to the National Bank.”.

9.     In sub-section (3) of section 34A, after the words “the Industrial Development Bank of India,” the words “the National Bank” shall be inserted.

10.  In section 35, after sub-section (5) , the following sub-section shall be inserted, namely:-

“(6) The powers exercisable by the Reserve Bank under this section in relation to regional rural banks may (without prejudice to the exercise of such powers by the Reserve Bank in relation to any regional rural bank whenever it considers necessary so to do)be exercised by the National bank in relation to the regional rural banks, and accordingly, subsections (1) to (5) shall apply in relation to regional rural banks as if every reference therein to the Reserve Bank included also a reference to the National Bank”.

11.  In sub-section (3) of section 36AD, after the words “ the Industrial Development Bank of India,”, the words “the National Bank” shall be inserted.

12.  In section 47, for the words “the Reserve Bank”, wherever they occur, the words the “Reserve Bank or, as the case may be, the National Bank” shall be substituted.

13.  In section 56,-\

(i) in clause (c), for sub-clause (i) ,the following sub-clause shall be substituted, namely:-

“(i) after clause (cc) , the following clauses shall be inserted, namely : - ‘(cci) “co-operative bank” means a state co-operative bank, a central co-operative bank and a primary co-operative bank ;

(ccii) “co -operative credit society” means a co-operative society, the primary object of which is to provide financial accommodation to its members and includes a co-operative land mortgage bank;

(cciii) “director”, in relation to a co-operative society, includes a member of any committee or body for the time being vested with the management of the affairs of that society;

(cciv) “primary agricultural credit society” means a co-operative society ,-

(1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and

(2) the bye-laws of which do not permit admission of any other co-operative society as a member:

Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such ‘co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose;

(ccv) “primary co-operative bank” means a co-operative society, other than a primary agricultural credit society,-

(1) the primary object or principal business of which is the transaction of banking business;

(2) the paid-up share capital and reserves of which are not less than one lakh of rupees; and

(3) the bye-laws of which do not permit admission of any other co-operative society as a member:

Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose;

(ccvi) “primary credit society” means a co-operative society , other than a primary agricultural credit society ,-

(1) the primary object or principal business of which is the transaction of banking business;

(2) the paid-up share capital and reserves of which are less than one lakh of rupees; and

(3) the bye-laws of which do not permit admission of any other co-operative society as a member:

Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose.

Explanation. - lf any dispute arises as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi) a determination thereof by the Reserve Bank shall be final;

(ccvii) “central co-operative bank”, “co-operative society”, “primary rural credit society” and “state co-operative bank” shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981;’;”

(ii) in clause (p) ,-

(a) for the words, figures and brackets “in section 23, for sub-section (1) , the following sub-section shall be substituted, namely”, the following shall be substituted, namely:-

“in section 23,-

(i) for sub-section (1) , the following sub-section shall be substituted, namely”;

(b) after sub-clause (i) , the following sub-clause shall be inserted, namely:-

‘(ii) after sub-section (4) , the following sub-section shall be inserted, namely: -

“(4A) Any co-operative bank requiring the permission of the Reserve Bank under this section shall forward its application to the Reserve Bank through the National Bank which shall give its comments on the merits of the application and send it to the Reserve Bank:

Provided that the co-operative bank shall also send an advance copy of the application directly to the Reserve Bank.”;’;

(iii) in clause (q) , after sub-clause (ii) , the following sub-clause shall be inserted, namely:-

“(iii) to sub-section (3) , the following proviso shall be added, namely:-

‘Provided that every co-operative bank, other than a primary co-operative bank, shall also furnish a copy of the said return to the National Bank.’.”;

(iv) after clause (r) , the following clauses shall be inserted, namely:-

‘(ri) in the second proviso to section 26 for the expression “regional rural bank”, the expression “co-operative bank, other than a primary co-operative bank” shall be substituted;

(rii) in section 27, for sub-section (3) , the following sub-section shall be substituted, namely :-

“(3) Every co-operative bank, other than a primary co-operative bank, shall submit a copy of the return which it submits to the Reserve bank, under sub-section (1) also to the National Bank and the powers exercisable by the Reserve Bank under sub-section (2) may also be exercised by the National Bank in relation to co-operative banks other than primary co-operative banks.”;;

(v) for clause (t) , the following clause shall be substituted, namely :-

‘(t) in section 31,-

(i) for the words “within three months” and “of three months”, the words “within six months” and “of six months” shall, respectively, be substituted;

(ii)for the second proviso, the following proviso shall be substituted, namely:-

“Provided further that a co-operative bank, other than a primary co-operative bank shall furnish such returns also to the National Bank”;’;

(vi) in clause (w), existing sub-clause (iii) shall be re-numbered as sub-clause (iv) and before sub-clause (iv) as so re-numbered, the following sub-clause shall be inserted, namely:-

‘(iii) in sub-section (6) , for the expressions “regional rural banks” and “regional rural bank”, wherever they occur, the expressions “co-operative banks other than primary co-operative banks” and “co-operative bank other than a primary co-operative bank” shall, respectively be substituted.’;

(vii) after clause (zj), the following clause shall be inserted, Namely:-

‘(zji) in section 54, after the expression “Reserve Bank”, wherever it occurs, the expression “or the National Bank” shall be inserted.’;

(viii) in the Third Schedule as substituted by clause (zl), After the expression “Reserve Bank”, wherever it occurs, the expression “the National Bank shall be inserted.

14. In the Banking Regulation Act, 1949, for the words “Agricultural Refinance Corporation”, wherever they occur, the words “National Bank” shall be substituted.

Part III: Amendment to the Industrial Disputes Act, 1947

(14 of 1947)

Amendment

In section 2, in clause (a), for the words and figures “the Agricultural Refinance Corporation established under section 3 of the Agricultural Refinance Corporation Act, 1963 “, the words and figures “the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 shall be substituted.

Part IV: Amendment to the Deposit Insurance and Credit Guarantee Corporation Act, 1961

(47 of 1961)

Amendment

In section 2, for clause (q), the following clauses shall be substituted, namely:-

‘(q) the expressions “central co-operative bank”, “co-operative Society” and “State co-operative bank” shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981;

(r) the expressions “primary co-operative bank” and “primary credit society” shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949.-.

Part V: Amendment to the Payment of Bonus Act, 1965

(21 of 1965)

Amendment

In section 32, for sub-clause (d) of clause (ix) , the following sub clause shall be substituted, namely-

“(d) the National Bank for Agriculture and Rural Development.”.



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