Banking Companies (Acquisition and Transfer of Undertakings) Act,1970
Act No : 5
Section : Establishment of corresponding new banks and business thereof
3. Establishment of corresponding new banks and business thereof. (1) On the commencement of this Act, there shall be constituted such corresponding new banks as are specified in the First Schedule. (2) The paid-up capital of every corresponding new bank constituted under sub-section (1) shall, until any provision is made in this behalf in any scheme made under section 9, be equal to the paid-up capital of the existing bank in relation to which it is the corresponding new bank. 2*[(2A) Notwithstanding anything contained in subs-section (2), the paid-up capital of every corresponding new bank constituted under sub-section (1) may from time to time be increased by-- (a) such amounts as the Board of Directors of the corresponding new bank may, after consultation with the Reserve Bank and with the previous sanction of the Central Government, transfer from the reserve fund established by such bank to such capital: (b) such amounts as the Central Government may, in consultation with the Reserve Bank, contribute to such paid-up capital; Provided that the paid-up capital of any such bank shall in no case be in excess of 3*[4*[rupees one thousand five hundred crores]. (3) The entire capital of each corresponding new bank shall stand vested in, and allotted to, the Central Government. (4) Every corresponding new bank shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, and to contract, and may sue and be sued in its name. (5) Every corresponding new bank shall 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 5*[one or more of the other forms of business] specified in sub-section (1) of section 6 of that Act. (6) Every corresponding new bank shall establish a reserve fund to which shall be transferred the share premiums and the balance, if any, standing to the credit of the reserve fund of the existing bank in relation to which it is the corresponding new bank, and such further sums, if any, as may be transferred in accordance with the provisions of section 17 of the Banking Regulation Act, 1949 (10 of 1949). 6*[(7) (i) The corresponding new 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, 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. (ii) The terms and conditions on which any such agency business shall be carried on by the corresponding new bank on behalf of the Reserve Bank shall be such as may be agreed upon. (iii) If no agreement can be reached on any matter referred to in clause (ii), or if a dispute arises between the corresponding new 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. (iv) The corresponding new bank may transact any business or perform any functions entrusted to it under clause (i), by itself or through any agent approved by the Reserve Bank.]
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