S.1 Short title and commencement

       (1) This Act may be called The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
       (2) It shall be deemed to have come into force on the 15th day of April, 1980.

S.2 Definitions

       In this Act, unless thecontext otherwise requires, -
       (a) "bankingcompany" does not include a foreign company within the meaning of section591 of the Companies Act, 1956;
       (b) "correspondingnew bank", in relation to an existing bank, means the body corporatespecified against such bank in column 2 of the First Schedule;
       (c) "Custodian"means the person who becomes, or is appointed, a Custodian under section 7;
       (d) "existingbank" means a banking company specified in column 1 of the First Schedule,being a company the total of the demand and time liabilities in India of which,as shown in the return as on the 14th day of March, 1980, furnished to theReserve Bank under section 42 of the Reserve Bank of India Act, 1934 amounts tonot less than rupees two hundr

S.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 column 2 of 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) Subject to the provisions of this Act, the authorised capital of every corresponding new bank shall be one thousand five hundred crores of rupees divided into one hundred and fifty crores fully paid-up shares of ten rupees each:
       Provided that the Central Government may, after consultation with the Reserve Bank and by notification in the Official Gazette, increase

S.3(a) Trust not to be entered on the register

       Notwithstanding anything contained in sub-section 2(F) of section 3, no notice of any trust, express, implied or constructive, shall be entered on the register or be receivable, by the corresponding new Bank. ]
       
       2[Provided that nothing in this sub-section shall apply to a depository in respect of shares held by it as a registered owner on behalf of the beneficial owners]
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       1.Inserted by Act 37 of 1994, section 5 w.e.f. 15-7-1994.
       2.Inserted by Depositories Related Laws (Amendment) Act ,1997 w.e.f 15.01.1997

S.3(b) Register of beneficial owners

       The register of benificial owners maintained by a depository under section 11 of the Depositories Act,1996,shall be deemed to be a register of shareholders for the purposes of this act.8. Inserted by Act 37 of 1994, section 5 w.e.f. 15-7-1994.]
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       1. Inserted by Depositories Related Laws (Amendment) Act ,1997 w.e.f 15.01.1997
       

S.4 Undertakings of existing banks to vest in corresponding new banks

On the commencement of this Act, the undertaking of every existing bank shall be transferred to, and shall vest in, the corresponding new bank.

S.5 General effect of vesting

       (I) The undertaking of each existing bank, shall be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property as were immediately before the commencement of this Act in the ownership, possession, power or control of the existing bank in relation to the undertaking, whether within or without India, and all books of accounts, registers, records and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the existing bank in relation to the undertaking.
       (2) If, according to the laws of any country outside India, the provisions of this Act by themselves are not effective to transfer or vest any asset or

S.6 Payment of amount

       (1) Every existing bank shall be given by the Central Government such amount in respect of the transfer, under section 4, to the corresponding new bank of the undertaking of the existing bank as is specified against each such bank in the Second Schedule.
       (2) The amount referred to in sub-section (1) shall be given to every existing bank, at its option,-
       (a) in cash (to be paid by cheque drawn on the Reserve Bank) in three equal annual installments, the amount of each instalment carrying interest at the rate of five and a half per cent per annum from the commencement of this Act; or
       (b) in saleable or otherwise transferable promissory notes or stock certificates of the Central Government issued and repayable at par, and maturing at the end of-
       (i

S.7 Head office and management

       (1) Thehead office of each corresponding new bank shall be at such place as the CentralGovernment may, by notification in the Official Gazette, specify in this behalf,and, until any such place is so specified, shall be at such place at which thehead office of the existing bank, in relation to which it is the correspondingnew bank, is on the commencement of this Act, located.
       (2) The generalsuperintendence, direction and management of the affairs and business of acorresponding new bank shall vest in a Board of Directors which shall beentitled to exercise all such powers and do all such acts and things as thecorresponding new bank is authorised to exercise and do.
       (3)(a) As soon as may beafter the commencement of this Act, the Central Government shall, inconsultation with the Reserve Bank, constitute the first Board of Directors of acorres

S.8 Corresponding new banks to be guided by the directions of the Central Government

Every corresponding new bank shall, in the discharge of its functions, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, give.

S.9 Power of Central Government to make scheme

       (1) The Central Government may, after consultation with the Reserve Bank, make a scheme for carrying out the provisions of this Act.
       
       (2) In particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely:-
       
       (a) the capital structure of the corresponding new bank 1 [***]
       
       (b) the constitution of the Board of Directors by whatever name called, of the corresponding new bank and all such matters in connection therewith or incidental thereto as the Central Government may consider to be necessary or expedient;
       

S.9(a) Power of Reserve Bank to appoint additional director

       (1) If the Reserve Bank is of the opinion that in the interest of banking policy or in the public interest or in the interests of the corresponding new bank or its depositors, it is necessary so to do, it may, from time to time, by order in writing, appoint, with effect from such date as may be specified in the order, one or more persons to hold office as additional directors of the corresponding new bank.
       (2) Any person appointed as an additional director in pursuance of this section--
       (a) shall hold office during the pleasure of the Reserve Bank and subject thereto for a period not exceeding three years or such further periods not exceeding three years at a time as the Reserve Bank may specify;
       (b) shall not incur any obligation or liability by reason only of his being a director or for anyt

S.10 Closure of accounts and disposal of profits

       (1) Every corresponding new bank shall cause its booksto be closed and balanced on the 31st day of December 1 [orsuch other date in each year as the Central Government may, by notification inthe Official Gazette specify] and shallappoint, with the previous approval of the Reserve Bank, auditors for the auditof its accounts.
       2 [Providedthat with a view to facilitating the transition from one period of accounting toanother period of accounting under this sub-section, the Central Government may,by order published in the Official Gazette, make such provisions as it considersnecessary or expedient for the closing and balancing of, or for other mattersrelating to, the books in respect of the concerned years.]
       (2) Every auditor of a corresponding new bank shall be aperson who is qualified to act as an auditor of a company under section 226 ofth

S.10(a) Annual general meeting

       -(1) A general meeting (in this Act referred to as an annual general meeting) of every corresponding new bank which has issued capital under clause (c) of sub-section (2B) of section 3 shall be held at the place of the head office of the bank in each year al such time as shall from lime to time be specified by the Board of Directors:
       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 auditor's report is, under sub-section (7A) of section 10, forwarded to the Central Government or to the Reserve Bank, whichever date is earlier.
       (2) The shareholders present at an annual general meeting 2 [shall be entitled to discuss, approve and adopt] the balance-sheet and the profit and loss account

S.10(b) Transfer of unpaid or unclaimed dividend to Unpaid Dividend Account

       (1) Where, after the commencement of the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, a dividend has been declared by a corresponding new bank but has not been paid or claimed within thirty days from the date of declaration, to, or by, any shareholder entitled to the payment of the dividend, the corresponding new bank shall, within seven days from the date of the expiry of such period of thirty days, transfer the total amount of dividend which remains unpaid or unclaimed within the said period of thirty days, to a special account to be called "Unpaid Dividend Account of ... (the name of the corresponding new bank)".
       Explanation.--In this sub-section, the expression "dividend which remains unpaid" means any dividend the warrant in respect thereof has not been encashed or which has otherwise not been paid or claim

S.11 Corresponding new bank deemed to be an Indian company

For the purposes of the Income-tax Act, 1961, every corresponding new bank shall be deemed to be an Indian company and a company in which the public are substantially interested.

S.12 Vacation of office of Chairman, etc.

       (1) Every person holding office, immediately before the commencement of this Act, as Chairman of an existing bank shall, if he becomes Custodian of the corresponding new bank, be deemed, on such commencement to have vacated office as such Chairman.
       (2) Save as otherwise provided in sub-section (1), every officer or other employee of an existing bank shall become, on the commencement of this Act, an officer or other employee, as the case may be, of the corresponding new bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if the undertaking of the existing bank had not been transferred to and vested in the corresponding new bank and continue to do so unless and until his employment in the corresponding new bank is terminated or until his remuneratio

S.12(a) Bonus

       (1) No officer or other employee [other than an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act, 1965] of a corresponding new bank shall be entitled to be paid any bonus.
       (2) No employee of a corresponding new bank, being an employee within the meaning of clause (13) of section 2 of the Payment of Bonus Act, 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 judgement, 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, 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.]

S.13 Obligations as to fidelity and secrecy

       (1)Every corresponding new bank shall observe, except as otherwise required by law,the practices and usages customary among bankers and, in particular, it shallnot divulge any information relating to or to the affairs of its constituentsexcept in circumstances in which it is, in accordance with law or practices andusages customary among bankers, necessary or appropriate for the correspondingnew bank to divulge such information.
       (2)Every director, member of a local board or a committee, or auditor, adviser,officer or other employee of a corresponding new bank shall, before enteringupon his duties make a declaration of fidelity and secrecy in the form set outin the Third Schedule.
       (3)Every Custodian of a corresponding new bank shall, as soon as possible, make adeclaration of fidelity and secrecy in the form set out in the Third Schedule.

S.14 Custodian to be public servant

Every Custodian of a corresponding new banks shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code.

S.15 Certain defects not to invalidate acts or proceedings

       (1) All acts done by the Custodian, acting in good faith, shall, notwithstanding any defect in his appointment or in the procedure, be valid.
       (2) No act or proceeding of any Board of Directors or a local board or committee of a corresponding new bank shall be invalid merely on the ground of the existence of any vacancy in, or defect in the constitution of such board or committee, as the case may be.
       (3) All acts done by a person acting in good faith as a director or member of a local board or committee of a corresponding new bank shall be valid, notwithstanding that it may afterwards be discovered that his appointment was invalid by reason of any defect or disqualification or had terminated by virtue of any provision contained in any law for the time being in force:
       Provided that nothing in

S.16 Indemnity

       (1) Every Custodian of a corresponding new bank and every officer of the Central Government or of the Reserve Bank and every officer or other employee of a corresponding new bank shall be indemnified by such bank against all losses and expenses incurred by him in or in relation to the discharge of his duties except such as have been caused by his own wilful act or default.
       (2) A director or member of a local board or committee of a corresponding new bank shall not be responsible for any loss or expenses caused to such bank by the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the corresponding new 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 unless such loss, expenses, insufficiency or deficiency was due to an

S.16(a) Arrangement with corresponding new bank on appointment of Directors to prevail

       (1) Where any arrangement entered into by a corresponding new bank with a company provides for the appointment by the corresponding new bank of one or more directors of such company, such provision and any appointment of directors made in pursuance (hereof shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 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 corresponding new bank in pursuance of the arrangement as aforesaid.
       (2) Any director appointed as aforesaid shall-
    

S.17 Construction of references to existing banks

Any reference to any existing bank in any law, other than this Act, or in any contract or other instrument shall, in so far as it relates to the undertaking which has been transferred by section 4, be construed as a reference to the corresponding new bank.

S.18 Dissolution

No provision of law relating to winding up of corporations shall apply to a corresponding new bank and no corresponding new bank shall be placed in liquidation save by order of the Central Government and in such manner as it may direct.

S.18(a) Supersession of Board in certain cases

       .--(1) Where the Central Government, on the recommendation of the Reserve Bank, is satisfied that in the public interest or for preventing the affairs of any corresponding new bank being conducted in a manner detrimental to the interest of the depositors or the corresponding new bank or for securing the proper management of any corresponding new bank, it is necessary so to do, the Central Government may, for reasons to be recorded in writing, by order, supersede the Board of Directors of such corresponding new bank for a period not exceeding six months as may be specified in the order:
       Provided that the period of supersession of the Board of Directors may be extended from time to time, so, however, that the total period shall not exceed twelve months.
        (2) The Central Government may, on supersession of the Board of Directors of th

S.19 Power to make regulations

       (I) TheBoard of Directors of a corresponding new bank may, after consultation with theReserve Bank and with the previous sanction of the Central Government, 1[bynotification in the Official Gazette,] makeregulations, not inconsistent with the provisions of this Act or any scheme madethereunder to provide for all matters for which provision is expedient for thepurpose of giving effect to the provisions of this Act.
       (2) In particular, andwithout prejudice to the generality of the foregoing power, the regulations mayprovide for all or any of the following matters, namely: -
       (a) thepowers, functions and duties of local boards and restrictions, conditions orlimitations, if any, subject to which they may be exercised or performed, theformation and constitution of local committees and committees of local boards(including the number of members o

S.20 Repeal

Repealed by the Repealing and Amending. Act (19 of 1988), Section 2, Schedule I w.e.f. 31-3-1988.

S.21 Repeal and saving

       (1) The Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1980, is hereby repealed.
       (2) Notwithstanding such repeal, anything done or any action taken, including any order made, notification issued or direction given, under the said Ordinance shall be deemed to have been done, taken, made, issued or given, as the case may be under the corresponding provisions of this Act.

Sch.1 FIRST SCHEDULE

       THE FIRST SCHEDULE
       (See sections 2, 3 and 4)
       Existing bank Corresponding New Bank
       Column 1 Column 2
       The Andhra Bank Limited Andhra bank
       Corporation Bank Limited Corporation Bank
       The New Bank of India Limited New Bank of India.
       The Oriental Bank of Commerce Limited Oriental Bank of Commerce
       The Punjab and Sind Bank Limited Punjab and Sind Bank
       Vijaya Bank Limited Vijaya Bank

Sch.2 Schedule II

       THE SECOND SCHEDULE
       (See section 6)
       Name of existing bank Amount(in lakhs of rupees)
       The Andhra Bank Limited ..... 610
       Corporation Bank Limited ..... 180
       The New Bank of India Limited ..... 510
       The Oriental Bank of Commerce Limited ..... 100
       The Punjab and Sind Bank Limited ..... 210
       Vijaya Bank Limited ..... 240

Sch.3 Schedule III

       THE THIRD SCHEDULE
       [See sub-sections (2) and (3) of section 13]
        DECLARATION OF FIDELITY AND SECRECY
        I.....do hereby declare that I will faithfully, truly and to the best of my skill and ability execute and perform the duties required of me as Custodian, Director, member of Local Board, member of Local Committee, auditor, adviser, officer or other employee (as the case may be) of the.....and which properly relate to the office or position in the said.....held by me.
        I. further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the.....or to the affairs of any person having any dealing with the.....; nor will I allow any such person to inspect or