56. Act to apply to co-operative societies subject to modifications.—8
[Notwithstanding anything
contained in any other law for the time being in force, the provisions of this Act], shall apply to, or in
relation to, co-operative societies as they apply to, or in relation to, banking companies subject to the
following modifications, namely:—
(a) throughout this Act, unless the context otherwise requires,—
1. Section 53 renumbered as sub-section (1) thereof by Act 28 of 2005, s. 57 and the Third Schedule.
2. Subs by s. 57 and Third Schedule, ibid., for “banking company or institution or to any class of banking companies”.
3. The words “or any of their branches functioning or located in any Special Economic Zone established under the Special
Economic Zones Act, 2005 (28 of 2005)” omitted by Act 17 of 2007, s. 3 (w.e.f. 23-1-2007).
4. Ins. by Act 28 of 2005, s. 57 and the Third Schedule.
5. Subs. by Act 17 of 2007, s. 3, for “A copy of every notification proposed to be issued under sub-section (1), shall be laid in
draft before each house of Parliament” (w.e.f. 23-1-2007).
6. Ins. by Act 58 of 1968, s. 20 (w.e.f. 1-2-1969).
7. Ins. by Act 23 of 1965, s. 14 (w.e.f. 1-3-1966).
8. Subs. by Act 39 of 2020, s. 4, for certain words (w.e.f. 1-4-2021).
76
(i) references to a “banking company” or “the company” or “such company” shall be
construed as references to a co-operative bank,
(ii) references to “commencement of this Act” shall be construed as references to
commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965
(23 of 1965);
1
[(iii) references to “memorandum of association” or “articles of association” shall be
construed as references to bye-laws;
(iv) references to the provisions of the Companies Act, 1956 (1 of 1956), except in Part III
and Part IIIA, shall be construed as references to the corresponding provisions, if any, of the
law under which a co-operative bank is registered;
(v) references to “Registrar” or “Registrar of Companies” shall be construed as references
to “Central Registrar” or “Registrar of Co-operative Societies”, as the case may be, under the
law under which a co-operative bank is registered;]
(b) in section 2, the words and figures “the Companies Act, 1956 (1 of 1956), and” shall be
omitted;
(c) in section 5,—
2
[(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;
3
[(cciia) “co-operative society” means a society registered or deemed to have been
registered under any Central Act for the time being in force relating to the multi-State
co-operative societies, or any other Central or State law relating to co-operative societies
for the time being in force;]
(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;
2
[(cciiia) “multi-State co-operative bank” means a multi-State co-operative society
which is a primary co-operative bank;
(cciiib) “multi-State co-operative society” means a multi-State co-operative society
registered as such under any Central Act for the time being in force relating to the multiState co-operative societies but does not include a national co-operative society and a
federal co-operative;]
(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:
1. Ins. by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
2. Subs. by Act 61 of 1981, s. 61 and the Second Schedule, for sub-clause (i) (w.e.f. 1-5-1982).
3. Ins. by Act 24 of 2004, s. 2 (w.e.f. 1-3-1966).
77
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.—If 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”,
1*** “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 (61 of 1981);]
2
[(ii) clauses (ff), (h) and (nb) shall be omitted;]
3* * * * * *
(e) in section 6, in sub-section (1),—
4* * * * * *
(ii) in clause (d), after the word “company”, the words “co-operative society,” shall be
inserted;
1. The words “co-operative society,” omitted by Act 24 of 2004, s. 2 (w.e.f. 1-3-1966).
2. Subs. by Act 1 of 1984, s. 42, for sub-clause (ii) (w.e.f. 15-2-1984).
3. Clause (d) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
4. Sub-clause (i) omitted by s. 4, ibid. (w.e.f. 1-4-2021).
78
1* * * * *
2
[(f) for section 7, the following section shall be substituted, namely:—
“7. Use of words “bank”, “banker” or “banking”.—(1) No co-operative society other than
a co-operative bank shall use as part of its name or in connection with its business any of the
words “bank”, “banker” or “banking”, and no co-operative society shall carry on the business
of banking in India unless it uses as part of its name at least one of such words.
(2) Nothing in this section shall apply to—
(a) a primary credit society, or
(b) a co-operative society formed for the protection of the mutual interest of cooperative banks or 3***, or
(c) any co-operative society, not being a primary credit society, formed by the
employees of—
(i) a banking company or the State Bank of India or a corresponding new bank or a
subsidiary bank of such banking company, State Bank of India or a corresponding new
bank, or
(ii) a co-operative bank or a primary credit society or a 3***,
insofar as the word “bank”, “banker” or “banking” appears as part of the name of the employer
bank, or as the case may be, of the bank, whose subsidiary the employer bank is.”];
4* * * * * *
(h) for section 11, the following section shall be substituted, namely:—
“11. Requirement as to minimum paid-up capital and reserves.—(1) Notwithstanding any
law relating to co-operative societies for the time being in force, no co-operative bank shall
commence or carry on the business of banking in India unless the aggregate value of its paid-up
capital and reserves is not less than one lakh of rupees:
Provided that nothing in this sub-section shall apply to—
(a) any such bank which is carrying on such business at the commencement of the
Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965), for a period
of three years from such commencement; or
(b) to a primary credit society which becomes a primary co-operative bank after such
commencement, for a period of two years from the date it so becomes a primary cooperative bank or for such further period not exceeding one year as the Reserve Bank,
having regard to the interests of the depositors of the primary co-operative bank, may think
fit in any particular case to allow.
(2) For the purposes of this section, “value” means the real of exchangeable value and not
the nominal value which may be shown in the books of the co-operative bank concerned.
(3) If any dispute arises in computing the aggregate value of the paid-up capital and
reserves of any such co-operative bank, a determination thereof by the Reserve Bank shall be
final for the purposes of this section.';
5
[(i) for section 12, the following section shall be substituted, namely:--
“12. Issue and regulation of paid-up share capital and securities by co-operative banks.---
1. Sub-clause (iii) omitted by Act 39 of 2020, s. 4 (w.e.f 1-4-2021).
2. Subs. by Act 1 of 1984, s. 42, for clause (f) (w.e.f. 15-2-1984).
3. The words “or co-operative land mortgage bank” omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
4. Clause (fi), (fii) and (g) omitted by s. 4, ibid. (w.e.f. 1-4-2021).
5. Subs. by s. 4, ibid., for clause (i) (w.e.f. 1-4-2021).
79
(1) A co-operative bank may, with the prior approval of the Reserve Bank, issue, by way
of public issue or private placement,--
(i) equity shares or preference shares or special shares, on face value or at premium;
and
(ii) unsecured debentures or bonds or other like securities with initial or original
maturity of not less than ten years,
to any member of such co-operative bank or any other person residing within its area of
operation, subject to such conditions and ceiling, limit or restriction on its issue or
subscription or transfer, as may be specified by the Reserve Bank in this behalf.
(2) Save as otherwise provided in this Act,--
(i) no person shall be entitled to demand payment towards surrender of shares issued
to him by a co-operative bank; and
(ii) a co-operative bank shall not withdraw or reduce its share capital, except to the
extent and subject to such conditions as the Reserve Bank may specify in this behalf.”;’;]
1
[(j) for section 18, the following section shall be substituted:—
“18. Cash reserve.—(1) Every co-operative bank, not being 2
[a co-operative bank] for the
time being included in the Second Schedule to the Reserve Bank of India Act, 1934
3
[(hereinafter referred to as a “scheduled State Co-operative Bank”)], shall maintain in India by
way of cash reserve with itself or by way of balance in a current account with the Reserve Bank
or the State Co-operative Bank of the State concerned or by way of net balance in current
accounts, or, in the case of a primary co-operative bank, with the central co-operative bank of
the district concerned, or in one or more of the aforesaid ways, a sum equivalent to 4
[such per
cent.] of the total of its demand and time liabilities in India, as on the last Friday of the second
preceding fortnight 5
[as the Reserve Bank may specify, by notification in the official Gazette,
from time to time having regard to the needs for securing the monetary stability in the country]
and shall submit to the Reserve Bank before the fifteenth day of every month a return showing
the amount so held on alternate Friday during a month with particulars of its demand and time
liabilities in India on such Fridays or if any such Friday is a public holiday under the
Negotiable Instruments Act, 1881 (26 of 1881), at the close of business on the preceding
working day.
Explanation.—In this section and in section 24—
(a) “liabilities in India” shall not include—
(i) the paid-up capital or the reserves or any credit balance in the profit and loss
account of the co-operative bank;
(ii) any advance taken from a State Government, the Reserve Bank, 6*** the Exim
Bank, 7
[the Reconstruction Bank], 8
[the National Housing Bank]], the National Bank
9
[, the Small Industries Bank,] or from the National Co-operative Development
1. Subs. by Act 1 of 1984, s. 42, for clause (j) (w.e.f. 29-3-1985).
2. Subs. by Act 4 of 2013, s. 14, for “State Co-operative Bank” (w.e.f. 18-1-2013)
3. Subs. by s. 14, ibid., for “(hereinafter referred to as a “scheduled State Co-operative Bank)”. (w.e.f. 18-1-2013).
4. Subs. by s. 14, ibid., for “at least three per cent.” (w.e.f. 18-1-2013).
5. Ins. by s. 14, ibid. (w.e.f. 18-1-2013).
6. The words “the Development Bank” omitted by s. 14, ibid. (w.e.f. 18-1-2013).
7. Ins. by Act 62 of 1984, s. 71 and the Third Schedule (w.e.f. 20-3-1985).
8. Ins. by Act 53 of 1987, s. 56 and the Second Schedule (w.e.f. 9-7-1988).
9. Ins. by Act 39 of 1989, s. 53 and the Second Schedule (w.e.f. 7-3-1990).
80
Corporation established under section 3 of the National Co-operative Development
Corporation Act, 1962 (26 of 1962) by the co-operative bank;
(iii) in the case of a State or central co-operative bank, also any deposit of money
with it representing the reserve fund or any part thereof maintained with it by any other
co-operative society within its area of operation, and in the case of a central cooperative bank, also an advance taken by it from the State co-operative bank of the
State concerned;
(iv) in the case of a primary co-operative bank, also any advance taken by it from
the 1
[co-operative bank] of the State concerned or the central co-operative bank of the
district concerned;
(v) in the case of any co-operative bank, which has granted an advance against any
balance maintained with it, such balance to the extent of the amount outstanding in
respect of such advance; and
(vi) in the case of any co-operative bank, the amount of any advance or other credit
arrangement drawn and availed of against approved securities;
(b) “fortnight” shall mean the period from Saturday to the second following Friday, both
days inclusive;
(c) “net balance in current accounts” shall, in relation to a co-operative bank, mean the
excess, if any, of the aggregate of the credit balances in current account maintained by that
co-operative bank with the State Bank of India or a subsidiary bank or 2
[a corresponding new
bank or IDBI Bank Ltd.], over the aggregate of the credit balances in current accounts held by
the said banks with such co-operative bank;
(d) for the purpose of computation of liabilities, the aggregate of the liabilities of a
co-operative bank to the State Bank of India, a subsidiary bank, a corresponding new bank, a
Regional Rural Bank, a banking company or any other financial institution notified by the
Central Government in this behalf shall be reduced by the aggregate of the liabilities of all such
banks and institutions to the co-operative bank;
(e) any cash with a co-operative bank or any balance held by a co-operative bank with
another bank, shall not, to the extend such cash or such balances represents the balance in, or
investment of, Agricultural Credit Stabilisation Fund of such co-operative bank, be deemed to
be cash maintained in India.
3
[(1A) If the balance held by co-operative bank referred to in sub-clause (cci) of clause (c) of
section 56 of the Banking Regulation Act, 1949, at the close of business on any day is below the
minimum specified under sub-section (1), such co-operative bank shall, without prejudice to the
provisions of any other law for the time being in force, be liable to pay to the Reserve Bank, in
respect of that day, penal interest at a rate of three per cent. above the bank rate on the amount by
which such balance falls short of the specified minimum, and if the shortfall continues further, the
penal interest so charged shall be increased to a rate of five per cent. above the bank rate in respect
of each subsequent day during which the default continues.
(1B) Notwithstanding anything contained in this section, if the Reserve Bank is satisfied, on an
application in writing by the defaulting co-operatrive bank, that such defaulting co-operative bank
had sufficient cause for its failure to comply with the provisions of sub-section (1), it may not
demand the payment of the penal interest.
1. Subs. by Act 4 of 2013, s. 14, for “State Co-operative Bank” (w.e.f. 18-1-2013).
2. Subs. by s. 14, ibid., for “a corresponding new bank” (w.e.f. 18-1-2013).
3. Ins. by s. 14, ibid. (w.e.f. 18-1-2013).
81
(1C) The Reserve Bank may, for such period and subject to such conditions as may be
specified, grant to any co-operative bank such exemptions from the provisions of this section as it
thinks fit with reference to all or any of its officers or with reference to the whole or any part of its
assets and liabilities.]
(2) The Reserve Bank may, for the purposes of this section and section 24, specify from time to
time, with reference to any transaction or class of transactions, that such transaction or transactions
shall be regarded as liability in India of a co-operative bank, and, if any question arises as to
whether any transaction or class of transactions shall be regarded for the purposes of this section
and section 24, as liability in India of a co-operative bank, the decision of the Reserve Bank thereon
shall be final.]
(k) for section 19, the following section shall be substituted, namely:—
“19. Restriction on holding shares in other co-operative societies.—No co-operative bank
shall hold shares in any other co-operative society except to such extent and subject to such
conditions as the Reserve Bank may specify in that behalf:
Provided that nothing contained in this section shall apply to—
(i) Shares acquired through funds provided by the State Government for that purpose;
(ii) in the case of a central co-operative bank, the holding of shares in the State cooperative bank to which it is affiliated;
(iii) in the case of a primary co-operative bank, the holding of shares in the central cooperative bank to which it is affiliated or in the State co-operative bank of the State in
which it is registered:
Provided further that where any shares are held by a co-operative bank in contravention
of this section at the commencement of the Banking Laws (Application to Co-operative
Societies) Act, 1965 (23 of 1965) the co-operative bank shall without delay report the
matter to the Reserve Bank and shall, notwithstanding anything contained in this section, be
entitled to hold the shares for such period and on such conditions as the Reserve Bank may
specify.”;
1* * * * *
2
[(m) in section 20A, in sub-section (1),—
(i) the words and figures “Notwithstanding anything to the contrary contained in section
293 of the Companies Act, 1956 (1 of 1956),” shall be omitted;
(ii) in clause (a), for the words “any of its directors” the words “any of its past or present
directors” shall be substituted;]
1* * * * *
(o) in section 22,—
(i) for sub-sections (1) and (2), the following sub-sections shall be substituted, namely:—
“(1) Save as hereinafter provided, no co-operative society shall carry on banking
business in India unless—
3* * * * *
1. Clause (l), (n) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
2. Subs. by Act 1 of 1984, s. 42 (w.e.f. 15-2-1984).
3. Omitted by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013).
82
(b) it is a co-operative bank and holds a licence issued in that behalf by the Reserve
Bank, subject to such conditions, if any, as the Reserve Bank may deem fit to impose:
Provided that nothing in this sub-section shall apply to a co-operative society, not being
a primary credit society or a co-operative bank carrying on banking business at the
commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965
(23 of 1965), for a period of one year from such commencement.
1
[Provided further that nothing in this sub-section shall apply to a primary credit society
carrying on banking business on or before the commencement of the Banking Laws
(Amendment) Act, 2012, for a period of one year or for such further period not
exceeding three years, as the Reserve Bank may, after recording the reasons in writing for
so doing, extend.]
2
[(2) Every co-operative society carrying on business as a co- operative bank at the
commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965,
(23 of 1965) shall before the expiry of three months from such commencement, every cooperative bank which comes into existence as a result of the division of any other cooperative society carrying on business as a co-operative bank, or the amalgamation of two
or more co-operative societies carrying on banking business shall, before the expiry of
three months from its so coming into existence, 3
[every primary credit society which had
become a primary co-operative bank on or before the commencement of the Banking Laws
(Amendment) Act, 2012 (4 of 2013), shall before the expiry of three months from the date
on which it had become a primary co-operative bank] and every co-operative society 4***
shall before commencing banking business in India, apply in writing to the Reserve Bank
for a licence under this section:
Provided that nothing in clause (b) of sub-section (1) shall be deemed to prohibit—
(i) a co-operative society carrying on business as a co-operative bank at the
commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965
(23 of 1965); or
(ii) a co-operative bank which has come into existence as a result of the division of
any other co-operative society carrying on business as a co-operative bank, or the
amalgamation of two or more co-operative societies carrying on banking business at
the commencement of the Banking Laws (Application to Co-operative Societies) Act,
1965 (23 of 1965) or at any time 5
[thereafter];
6* * * * *
from carrying on banking business until it is granted a licence in pursuance of this section
or is, by a notice in writing, notified by the Reserve Bank that the licence cannot be granted
to it.]
7
[(ii) sub-section (3A) shall be omitted;
(iii) in sub-section (4), in clause (iii), the words, brackets, figure and letter “and
sub-section (3A)” shall be omitted;]
1. Ins. by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013).
2. Subs. by Act 1 of 1984, s. 42, for sub-section (2) (w.e.f. 15-2-1984).
3. Subs. by Act 4 of 2013, s. 14, for “every primary credit society which becomes a primary co-operative bank after such
commencement shall before the expiry of three months from the date on which it so becomes a primary co-operative bank”
(w.e.f. 18-1-2013).
4. The words “other than a primary credit society” omitted by s. 14, ibid. (w.e.f. 18-1-2013).
5. Subs. by s. 14, ibid., for “thereafter; or” (w.e.f. 18-1-2013).
6. Clause (iii) omitted by s. 14, ibid. (w.e.f. 18-1-2013).
7. Subs. by Act 1 of 1984, s. 42, for sub-clause (ii) (w.e.f. 15-2-1984).
83
1
[22A. Validation of licences granted by Reserve Bank to multi-State co-operative societies.—
Notwithstanding anything contained in any law or, judgment delivered or decree or order of any
court made,—
(a) No licence, granted to a multi-State co-operative society by the Reserve Bank under
section 22, which was subsisting on the date of commencement of the Banking Regulation
(Amendment) and Miscellaneous Provisions Act, 2004 (24 of 2004), shall be invalid or be
deemed ever to have been invalid merely by the reason of such judgment, decree or order;
(b) Every licence, granted to a multi-State co-operative society by the Reserve Bank under
section 22, which was subsisting on the date of commencement of the Banking
Regulation (Amendment) and Miscellaneous Provisions Act, 2004 (24 of 2004), shall be valid
and be deemed always to have been validly granted in accordance with law;
(c) A multi-State co-operative society whose application for grant of licence for carrying on
banking business was pending with the Reserve Bank on the date of commencement of the
Banking Regulation (Amendment) and Miscellaneous Provisions Act, 2004 (24 of 2004) shall
be eligible to carry on banking business until it is granted a licence in pursuance of section 22
or is, by a notice in writing notified by the Reserve Bank that the licence cannot be granted to
it;]
2* * * * *
3
[(q) in section 24,—
4* * * * *
5* * * * *
(iii) in sub-section (3), for the proviso, the following proviso shall be substituted,
namely:—
“Provided that every co-operative bank, other than a primary co-operative bank, shall
also furnish within the said period, a copy of the said return to the National Bank.”;
5* * * * * *
6
[(qq) after section 24, the following section shall be inserted, namely:—
“24A. Power to exempt.—Without prejudice to the provisions of section 53, the Reserve
Bank may, by notification in the Official Gazette, declare that, for such period and subject to
such conditions as may be specified in such notification the whole or any specified therein,
shall not apply to any co- operative bank or class of co-operative banks, with reference to all or
any of the offices of such co-operative bank or banks, or with reference to the whole or any part
of the assets and liabilities of such co-operative bank or banks];
7* * * * *
(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
1. Ins. by Act 24 of 2004, s. 2 (w.e.f. 24-9-2004).
2. Clause (p) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
3. Subs. by Act 1 of 1984, s. 42, for clause (g) (w.e.f. 29-3-1985).
4. Omitted by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013).
5. Subs. by Act 39 of 2020, s. 4,for sub-clause (ii) and (iv) (w.e.f. 1-4-2021).
6. Ins. by Act 1 of 1984, s. 42 (w.e.f. 15-2-1984).
7. Clauses (r), (ria) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
84
also be exercised by the National Bank in relation to co-operative banks, other than primary
co-operative banks.”
(s) for 1
[section 29], the following section shall be substituted, namely:—
“29. Accounts and balance-sheet.—(1) At the expiration of each year ending with the
30th day of June 2
[or at the expiration of a period of twelve months ending with such date
as the Central Government may, by notification in the Official Gazette, specify in this
behalf,] every co-operative bank, in respect of all business transacted by it, shall prepare
with reference to that year 1
[or the period] a balance-sheet and profit and loss account as on
the last working day of the year 1
[or the period] in the Forms set out in the Third Schedule
or as near thereto as circumstances admit.
(2) The balance-sheet and profit and loss account shall be signed by the manager or the
principal officer of the bank and where there are more than three directors of the bank, by at
least three of those directors, or where there are not more than three directors, by all the
directors.
(3) The Central Government, after giving not less than three months' notice of its
intention so to do by a notification in the Official Gazette, may from time to time by a like
notification amend the Forms set out in the Third Schedule:]
3
[Provided that with a view to facilitating the transition from one period of accounting
to another period of accounting under this sub-section, the Central Government may, by
order published in the Official Gazette, make such provisions as it considers necessary or
expedient for the preparation of, or for other matters relating to, the balance-sheet or profit
and loss account in respect of the concerned year or period, as the case may be.]
4* * * * *
5
[(t) in section 31,—
6* * * * *
(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”;]
7* * * * * *
7* * * * * *
(w) in section 35,—
(i) in sub-section (1),—
(a) for the words and figures “section 235 of the Companies Act, 1956 (1 of 1956),” the
words “any law relating to co-operative societies for the time being in force” shall be
substituted;
8
[(b) the following proviso shall be inserted at the end, namely:—
1. Subs. by Act 4 of 2013, s. 14, for “sections 29 and 30” (w.e.f. 18-1-2013).
2. Ins. by Act 54 of 1991, s.2 (w.e.f. 20-12-1991).
3. The proviso ins. by Act 54 of 1991, s. 2.
4. Clause (sa) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
5. Subs. by Act 61 of 1981, s. 61 and the Second Schedule (w.e.f. 12-7-1982).
6. Clause (i) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
7. Clause (u), (v) omitted by s. 4, ibid. (w.e.f. 1-4-2021).
8. Subs. by Act 1 of 1984, s. 42, for item (b) (w.e.f. 15-2-1984).
85
“Provided that the Reserve Bank may, if it considers it necessary or expedient so to
do, cause an inspection to be made of a primary co-operative bank under this
sub-section by one or more officers of a State co-operative bank in the State in which
such primary co-operative bank is registered.”];
(ii) in sub-section (4), clause (b) shall be omitted;
1
[(iii) after sub-section (4), the following sub-section shall be inserted, namely:—
“(4A) Without prejudice to the provisions of sub-section (4), the Reserve Bank may, if it
considers it necessary or expedient so to do supply a copy of the report on any inspection or
scrutiny to the State co-operative bank and the Registrar of co-operative societies of the State in
which the bank which has been inspected or whose affairs have been scrutinised is registered.”]
2
[(iv)] 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 cooperative banks” and “co-operative bank other than a primary co-operative bank” shall,
respectively be substituted.]
3
[(v)] the Explanation shall be omitted;
4* * * * * *
4* * * * * *
4* * * * * *
4* * * * * *
5
[(zaa) after section 36AA of the principal Act, the following sections shall be inserted,
namely:—
“36AAA.—Supersession of Board of directors of a 6
[co-operative bank].—(1) Where the
Reserve Bank is satisfied that in the public interest or for preventing the affairs of a 6
[cooperative bank] being conducted in a manner detrimental to the interest of the depositors or of
the 6
[co-operative bank] or for securing the proper management of the 6
[co-operative bank], it is
necessary so to do, the Reserve Bank may, for reasons to be recorded in writing, by order,
supersede the Board of directors of such 6
[co-operative bank] for a period not exceeding five
years as may be specified in the order, which may be extended from time to time, so, however,
that total period shall not exceed five years.
7
[Provided that in the case of a co-operative bank registered with the Registrar of Cooperative Societies of a State, the Reserve Bank shall issue such order in consultation with the
concerned State Government seeking its comments, if any, within such period as the Reserve
Bank may specify.”;]
(2) The Reserve Bank may, on supersession of the Board of directors of the 6
[co-operative
bank] under sub-section (1) appoint an Administrator for such period as it may determine.
(3) The Reserve Bank may issue such directions to the Administrator as it may deem
appropriate and the Administrator shall be bound to follow such directions.
1. Ins. by Act 1 of 1984, s. 42 (w.e.f. 15-2-1984).
2. Sub-clause (iii) renumbered as sub-clause (iv) by s. 42, ibid. (w.e.f. 15-2-1984).
3. Sub-clause (iv) renumbered as sub-clause (v) by s. 42, ibid. (w.e.f. 15-2-1984).
4. Clause (x), (y), (z) and (za) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
5. Subs. by Act 24 of 2004, s. 2, for clause (zaa) (w.e.f. 24-9-2004).
6. Subs. by Act 39 of 2020, s. 4, for “multi-State co-operative bank” (w.e.f. 1-4-2021).
7.The proviso ins. by s. 4, ibid. (w.e.f. 1-4-2021).
86
(4) Upon making the order of supersession of the Board of directors of a 6
[co-operative
bank],—
(a) The chairman, managing director and other directors as from the date of
supersession of the Board shall vacate their offices as such;
(b) All the powers, functions and duties which may, by or under the provisions of the
Multi-State Co-operative Societies Act, 2002 (39 of 2002) or this Act or any other law for
the time being in force, be exercised and discharged by or on behalf of the Board of
directors of such a 1
[co-operative bank] or by a resolution passed in general meeting of
such co-operative bank, shall, until the Board of directors of such co-operative bank is
reconstituted, be exercised and discharged by the Administrator appointed by the Reserve
Bank under sub-section (2):
Provided that the power exercised by the Administrator shall be valid notwithstanding
that such power is exercisable by a resolution passed in the general meeting of such multiState co-operative bank.
(5) (a) The Reserve Bank may constitute a committee of three or more persons who have
experience in law, finance, banking, administration or accountancy to assist the Administrator
in discharge of his duties.
(b) The committee shall meet at such times and places and observe such rules of procedure
as may be specified by the Reserve Bank.
(6) The salary and allowances to the Administrator and the members of the committee
constituted by the Reserve Bank shall be such as may be specified by the Reserve Bank and be
payable by the concerned 1
[co-operative bank].
(7) On and before expiration of period of supersession of the Board of directors as specified
in the order issued under sub-section (1), the Administrator of the 1
[co-operative bank] shall
call the general meeting of the society to elect new directors.
(8) Notwithstanding anything contained in any other law or in any contract, or bye-laws of
a 1
[co-operative bank], no person shall be entitled to claim any compensation for the loss or
termination of his office.
(9) The Administrator appointed under sub-section (2) shall vacate office immediately after
the Board of directors of the multi-State co-operative society has been constituted.
2
[(10) The provisions of section 36ACA shall not apply to a co-operative bank.]
3* * * * *
36AAC.— Reimbursement to Deposit Insurance Corporation by liquidator or transferee
bank.—Where a multi-State co-operative bank, being an insured bank within the meaning of
the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), is wound up
and the Deposit Insurance Corporation has become liable to the depositors of the insured bank
under sub-section (1) or sub-section (2) of section 16 of that Act, the Deposit Insurance
Corporation shall be reimbursed by the liquidator or such other person in the circumstances, to
the extent and in the manner provided in section 21 of that Act.
(zab) In section 36AD, sub-section (3) shall be omitted;’;
4
[(zb) Part IIC shall be omitted;]
1. Subs. by Act 39 of 2020, s. 4, for “multi-State co-operative bank” (w.e.f. 1-4-2021).
2. Ins. by s. 4, ibid. (w.e.f. 1-4-2021).
3. Section 36AAB omitted by s. 4, ibid. (w.e.f. 1-4-2021).
4. Subs. by s. 4, ibid., for clause (zb) (w.e.f. 1-4-2021).
87
1
[(zc) in section 46,—
2* * * * *
(ii) in clause (a) of the Explanation, after the words “includes a”, the words “co-operative
society” shall be inserted;]
3* * * * * *
(ze) section 49 shall be omitted;
3* * * * * *
4
[(zg) in section 49B, references to “Central Government” shall be construed as references to
“Central Registrar” or “Registrar of Co-operative Societies”, as the case may be, under the law
under which a co-operative bank is registered;’;]
5* * * * * *
(zi) section 51 shall be omitted;
6
[(zj) after section 53, the following section shall be inserted, namely:--
“53A. Powers to exempt co-operative banks in certain cases.—Notwithstanding
anything contained in any other provisions of this Act, the Reserve Bank may, from time to
time, on being satisfied that it is necessary so to do, declare, by notification in the Official
Gazette, that the provisions of item (iii) of clause (b) of sub-section (1) and sub-section (2),
of section 10, clause (a) of sub-section (2) of section 10A, sub-section (1A) of section 10B
and clause (b) of sub-section (1) of section 35B of this Act shall not apply to a co-operative
bank or class of co-operative banks, either generally or for such period as may be specified
therein, subject to such conditions, limitations or restrictions as it may think fit to
impose.”;’;]
7
[(zji) in section 54, after the expression “Reserve Bank”, wherever it occurs, the expression “or
the National Bank” shall be inserted.]
(zk) for section 55 and the First Schedule, the following section shall be substituted, namely:—
“55. Act 18 of 1891 and Act 46 of 1949 to apply in relation to co-operative banks.—(1)
The Bankers’ Books Evidence Act, 1891(18 of 1891) shall apply in relation to a co-operative
bank as it applies in relation to a bank as defined in section 2 of that Act.
(2) The Banking Companies (Legal Practitioners' Clients' Accounts) Act, 1949 ( shall apply
in relation to a co-operative bank as it applies in relation to a banking company as defined in
section 2 of that Act.”;
1. Subs. by Act 1 of 1984, s. 42, for clause (zc) (w.e.f. 15-2-1984).
2. Clause (i) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021).
3. clauses (zd) and (zf) omitted by s. 4, ibid. (w.e.f. 1-4-2021).
4. Subs. by s. 4, ibid., for clause (zg) (w.e.f. 1-4-2021).
5. Clause (zh) omitted by s. 4, ibid. (w.e.f. 1-4-2021).
6. Subs. by s. 4, ibid., for clause (zj) (w.e.f. 1-4-2021).
7. Ins. by Act 61 of 1981, s. 61 and the Second Schedule (w.e.f. 1-5-1982).
88
(zl) for the Third Schedule and the Fourth Schedule, the following Schedule shall be
substituted, namely:—
“
nder this item with
appropriate foot-note.
SCHEDULE 12—CONTINGENT AVAIBILITIES
As on 31-3__ As on 31-3__
(current year) (previous year)
I. Claims against the bank not acknowledged as debts
II. Liability for partly paid investments
III. Liability on account of outstanding forward exchange contracts
IV. Guarantees given on behalf of constituents
(a) In India
(b) Outside India
V. Acceptances, endorsements and other obligations
VI. Other items for which the bank is contingently Liable
____________ ____________
TOTAL : ____________ ____________
101
FORM B
(000’s omitted)
FORM OR PROFIT AND LOSS ACCOUT FOR THE YEAR ENDED ON 31ST MARCH (YEAR)
Schedule No. Year ended 31-3_
(current year)
Year ended 31-3_
(previous year)
I. INCOME
Interest earned
Other Income
TOTAL :
13
14
II. EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
15
16
TOTAL :
III. PROFIT/LOSS
Net Profit/Loss (-) for the year
Profit/Loss (-) brought forward
TOTAL :
IV. APPROPRIATIONS
Transfer to statutory reserves
Transfer to other reserves
Transfer to Government/proposed dividend
Balance carried over to balance sheet
TOTAL :
SCHEDULE 13—INTEREST EARNED
Year ended on Year ended on
31-3__ 31-3__
(current year) (previous year)
I. Interest/discount on advance/bills
II. Income on investments
102
III. Interest on balances with Reserve Bank of India and other inter-bank funds
IV. Others
______________ ______________
TOTAL : ______________ ______________
SCHEDULE 14—OTHER INCOME
Year ended on Year ended on
31-3__ 31-3___
(current year) (previous year)
I. Commission, exchange and brokerage
II. Profit on sale of investments
Less : Loss on sale of investments
III. Profit on revaluation of investments
Less : Loss on revaluation of investments
IV. Profit on sale of land, buildings and other assets
Less : Loss on sale of land, buildings and other assets
V. Profit on exchange transactions
Less : Loss on exchange transactions
VI. Income earned by way of dividends etc.
from subsidiaries/companies and/or
joint ventures abroad/in India
VII. Miscellaneous Income
______________ ______________
TOTAL : ______________ ______________
NOTE : Under items II to V loss figures may be shown in brackets.
SCHEDULE 15—INTEREST EXPENDED
Year ended on Year ended on
31-3__ 31-3__
(current year) (previous year)
I. Interest on deposits
II. Interest on Reserve Bank of India/ Inter-back borrowings
III. Others
TOTAL : ______________ ______________
______________ ______________
103
SCHEDULE 16—OPERATING EXPENSES
Year ended on Year ended on
31-3......... 31-3.................
(current year) (previous year)
I. Payments to and provisions for employees
II. Rent, taxes and lighting
III. Printing and stationery
IV. Advertisement and publicity
V. Depreciation on Bank's property
VI. Director's fees, allowances and expenses
VII. Auditors' fees and expenses (Including branch auditors)
VIII. Law charges
IX. Postages. Telegrams, Telephones, etc.
X. Repairs and maintenance
XI. Insurance
XII. Other expenditure
____________ ____________
TOTAL : ______________ __________
104
1
[THE FOURTH SCHEDULE
[See section 45D(2)]
LIST OF DEBTORS
1. The official liquidator shall from time to time submit list of debtors to the High Court, each list
being verified by an affidavit.
2. Every such list shall contain the following particulars:—
(a) names and addresses of the debtors;
(b) amount of debt due to the banking company by each debtor;
(c) rate of interest, if any, and the date up to which such interest has been calculated in the case
of each debtor;
(d) description of papers, writings, and documents, if any, relating to each debt;
(e) relief or reliefs claimed against each debtor.
3. (a) In every such list, the official liquidator shall distinguish between the debts for which the
banking company holds and security other than a personal security and the debts for which no security
or only a personal security is given;
(b) In the case of secured debts, particulars of the securities claimed by the banking company, and
whenever possible their estimated value, and the names and addresses of person or persons, if any,
having an interest in the securities or the right of redemption therein;
(c) In case the debt is guaranteed by any person or persons, the name and address of the guarantor
or guarantors with particulars as to the extent to which the debt is guaranteed and description of
documents, papers or writings in support of such guarantee.
4. If the debtor is adjudged insolvent either before or after he has been included in any such list, but
before such list is settled, the name and address of the assignee or the receiver of his estate, as the case
may be, should be stated in, or added to, the list.
5. If the original debtor dies either before or after he has been included in any such list, but before
such list is settled, there shall be substituted in his place the names and addresses of his legal
representatives as far as the official liquidator is able to ascertain.]
1 Ins. by Act 52 of 1953, s. 12 (w.e.f. 30-12-1953).
105
1
[THE FIFTH SCHEDULE
(See section 36AG)
PRINCIPLES OF COMPENSATION
1. The compensation to be given under section 36AG shall be an amount equal to the value of the
assets of the acquired bank as on the day immediately before the appointed day, computed in
accordance with the provisions of Part I of this Schedule less the total amount of liabilities thereof
computed in accordance with the provisions of Part II of this Schedule.
Part I.—Assets
For the purposes of this Part “assets” means the total of the following:—
(a) the amount of cash in hand and with the Reserve Bank and the State Bank of India
(including foreign currency notes which shall be converted at the market rate of exchange);
(b) the amount of balances with any bank, whether on deposit or current account, and money at
call and short notice, balance held outside India being converted at the market rate of exchange:
Provided that any balance which are not realisable in full shall be deemed to be debts and valued
accordingly:—
(c) the market value, as on the day immediately before the appointed day, of any securities,
shares debentures, bonds and other investments, held by the bank concerned.
Explanation.—For the purposes of this clause,—
(i) securities of the Central and State Governments [other than the securities specified in subclauses (ii) and (iii) of this Explanation] maturing for redemption, within five years from the
appointed day shall be valued at the face value or the market value, whichever is higher;
(ii) securities of the Central Government, such as Post Office Certificates and Treasury Savings
Deposit Certificates and any other securities or certificates issued or to be issued under the Small
Savings Scheme of the Central Government, shall be valued at their face value or the encashable
value of the market value, as on the day immediately before the appointed day, whichever is higher;
(iii) where the market value of any Government security such as the zamindari abolition bonds
or other similar security in respect of which the principal is payable in instalment, is not
ascertainable or is, for any reason, not considered as reflecting the fair value thereof or as otherwise
appropriate, the security shall be valued at such an amount as is considered reasonable having
regard to the instalments of principal and interest remaining to be paid, the period during which
such instalments are payable, the yield of any security, issued by the Government to which the
security pertains and having the same or approximately the same maturity, and other relevant
factors;
(iv) where the market value of any security, share, debenture, bond or other investment is not
considered reasonable by reason of its having been affected by abnormal factors, the investment
may be valued on the basis of its average market value over any reasonable period;
(v) where the market value of any security, share, debenture, bond or other investment is not
ascertainable, only such value, if any, shall be taken into account as is considered reasonable having
regard to the financial position of the issuing concern, the dividend paid by it during the preceding
five years and other relevant factors;
(d) the amount of advances (including loans, cash, credits, overdrafts, bills purchased and
discounted), and other debts, whether secured or unsecured, to the extent to which they are
reasonably considered recoverable, having regard to the value of the security, if any, the operations on the account, the reported worth and respectability of the borrower, the prospects of realisation
and other relevant considerations;
(e) the value of any land or buildings;
(f) the total amount of premia paid, in respect of all leasehold properties, reduced in the case of
each such premium by an amount which bears to such premium the same proportion as the expired
term of the lease in respect of which such premium shall have been paid bears to the total term of
the lease;
(g) the written down value as per books, or the realisable value, as may be considered
reasonable, of all furniture, fixture and fittings;
(h) the market or realisable value, as may be a appropriate, of the other assets appearing on the
books of the bank, no value being allowed for capitalised expenses, such as share selling
commission, organisational expenses and brokerage, losses incurred and similar other items.
Part II.—Liabilities
For the purpose of the Part “liabilities” means the total amount of all outside liabilities existing on
the appointed day, and all contingent liabilities which the Central Government or the transferee bank
may reasonably be expected to be required to be out of its own resources on or after the appointed day
and where the acquired bank is a banking company incorporated outside India, includes the liabilities of
the offices and branches in India of the acquired bank to its offices and branches outside India.
2. If the acquired bank is not incorporated in India, the assets or, as the case may be, the liabilities
of the bank shall be, for the purposes of Part 1 and Part 11, and subject to the other provisions therein,
the assets and liabilities of the offices of the bank situated in India.
COMPENSATION PAYABLE TO SHAREHOLDERS
3. Every shareholder of the acquired bank to whom the compensation is payable, shall be given
such amount as compensation, as bears to the total compensation, calculated in accordance with the
provisions of paragraph 1, the same proportion as the amount of paid-up capital of the shares held by
the shareholder bears to the total-up capital of the acquired bank.
CERTAIN DIVIDENDS NOT TO BE TAKEN INTO ACCOUNT
4. No separate compensation shall be payable for any profits or any dividends in respect of any
period immediately preceding the appointed day, for which, in the ordinary course, profits would have
been transferred or dividend declared after the appointed day.]