8. Management.—(1) Subject to the provisions of this Act, the general superintendence, direction
and management of the affairs and business of a Regional Rural Bank shall vest in a Board of directors
who may exercise all the powers and discharge all the functions which may be exercised or discharged by
the Regional Rural Bank.
(2) In discharging its functions, the Board shall act on business principles and shall have due regard to
public interest.
9. Board of directors.—(1) The Board of directors shall consist of the Chairman appointed under
sub-section (1) of section 11, and the following other members, namely:—
3
[(a) two directors, who are not officers of the Central Government, State Government, Reserve
Bank, National Bank, Sponsor Bank or any other bank, to be nominated by the Central Government;
4
[Provided that no person shall be nominated as a director, if he is already a director on the Board
Board of any other Regional Rural Bank;]
(b) one director, who is an officer of the Reserve Bank, to be nominated by that Bank;
(c) one director, who is an officer of the National Bank, to be nominated by that Bank;
(d) two directors, who are officers of the Sponsor Bank, to be nominated by that Bank; and
(e) two directors, who are officers of the concerned State Government, to be nominated by that
Government:]
4
[(f) such number of directors elected by the shareholders other than the directors nominated by
the Central Government, the State Government, the Sponsor Bank and other institutions owned or
controlled by the Central Government or the State Government, whose names are entered in the
register of shareholders of the Regional Rural Bank at least ninety days before the date of the meeting
in which the election of directors takes place on the following basis, namely:—
(i) where the total amount of equity share capital issued to such shareholders is ten per cent.
or less of the total issued equity capital, one director shall be elected from such shareholders;
(ii) where the total amount of equity share capital issued to such shareholders is more than ten
per cent. but less than twenty-five per cent. of the total issued equity capital, two directors shall
be elected from the shareholders including the shareholders referred to in sub-clause (i);
1. Ins. by Act 14 of 2015, s. 4 (w.e.f. 4-2-2016).
2. Subs. by Act 1 of 1988, s. 6, for “Reserve Bank” (w.e.f. 28-9-1988).
3. Subs. by s. 7, ibid., for clauses (a), (b) and (c) (w.e.f. 28-9-1988).
4. Ins. by Act 14 of 2015, s. 5 (w.e.f. 4-2-2016).
6
(iii) where the total amount of equity share capital issued to such shareholders is twenty-five
per cent. or more of the total issued equity capital, three directors shall be elected from the
shareholders including shareholders referred to in sub-clauses (i) and (ii).]
(2) The Central Government may increase the number of members of the Board; so, however, that
the number of directors does not exceed fifteen in the aggregate and also prescribe the manner in which
the additional number may be filled in.
1
[(3) The Central Government may appoint an officer of the Central Government on the Board of
Regional Rural Banks, if it considers necessary for the purposes of effective functioning of the Regional
Rural Banks.]
2
[10. Term of office of director.—A director nominated under clause (a) of sub-section (1) of
section 9 shall hold office during the pleasure of the Central Government and for such term, not
exceeding three years, from the date on which he assumes his office, as the Central Government may
specify at the time of his nomination and shall be eligible for renomination:
Provided that no such director shall hold office either continuously or intermittently for a period
exceeding six years.]
11. Chairman.—(1) 3
[The Sponsor Bank] shall appoint an individual to be the Chairman of a
Regional Rural Bank and specify the period, not exceeding five years, for which such individual shall,
subject to the provisions of sub-section (4), hold office as the Chairman:
4
[Provided that no appointment of such an individual shall be made,—
(a) if such an individual is an officer of the Sponsor Bank, except after consultation with the
National Bank;
(b) in any other case, except with the prior approval of the Central Government.]
5
[(1A) Notwithstanding anything contained in sub-section (1),—
(a) the Sponsor Bank shall have the right to terminate the term of office of the Chairman at any
time before the expiry of the period specified in sub-section (1):
Provided that no such termination shall be made,—
(a) if the Chairman is an officer of the Sponsor Bank, except after consultation with the
National Bank; and
(b) in any other case, except with the prior approval of the Central Government:
Provided further that where the Chairman is not an officer of the Central Government, State
Government, Reserve Bank, National Bank, Sponsor Bank or any other bank, he shall be given notice
of not less than three months in writing or three months’ salary and allowances in lieu of such notice;
and
(b) the Chairman shall have the right to resign his office at any time before the expiry of the
period specified in sub-section (1) by giving to the Sponsor Bank, notice of not less than three months
in writing.]
(2) The individual, appointed as a Chairman under sub-section (1), shall, on the expiry of the period
specified under that sub-section, be eligible for re-appointment.
(3) The Chairman shall devote his whole time to the affairs of the Regional Rural Bank and shall
have, subject to the superintendence, control and direction of the Board, the management of the whole of
the affairs of the Regional Rural Bank.
1. Ins. by Act 14 of 2015, s. 5 (w.e.f. 4-2-2016).
2. Subs. by s. 6, ibid., for section 10 (w.e.f. 4-2-2016).
3. Subs. by Act 1 of 1988, s. 8, for “The Central Government” (w.e.f. 28-9-1988).
4. Proviso ins. by s. 8, ibid. (w.e.f. 28-9-1988).
5. Subs. by s. 8, ibid., for sub-section (1A) (w.e.f. 28-9-1988).
7
1
[(4)
2
[The Sponsor Bank] may, at any time, remove the Chairman from office:
3
[Provided that no such removal shall be made,—
(a) if the Chairman is an officer of the Sponsor Bank, except after consultation with the National
Bank; and
(b) in any other case, except with the prior approval of the Central Government:
Provided further that] no person shall be removed from his office, under this sub-section, unless he
has been given an opportunity of showing cause against his removal.]
(5) The Chairman shall receive such salary and allowances and be governed by such terms and
conditions of service as may be determined by the 4
[the Sponsor Bank in consultation with the National
Bank].
(6) If the Chairman is, by infirmity or otherwise, rendered incapable of carrying out his duties
or is absent, on leave or otherwise, in circumstances not involving the vacation of office, the
Central Government may appoint another individual to act as the Chairman during the absence of the
first-mentioned Chairman.
12. Disqualifications.—A person shall be disqualified for being appointed or, as the case may be,
nominated as, and for being, a director, if he—
(a) is, or, at any time has been, adjudged insolvent or has suspended payment of his debt or has
compounded with his creditors, or
(b) is of unsound mind and stands so declared by a competent court, or
(c) is, or has been, convicted of an offence which, in the opinion of the Central Government,
involves moral turpitude.
13. Vacation of the seat of directors.—(1) If a director—
(a) becomes subject to any disqualification specified in section 12, or
(b) is absent without leave of the Board for more than three consecutive meetings thereof,
his seat shall thereupon become vacant.
5
[(2) A director may resign his office by giving notice thereof in writing to the authority by which he
was nominated; and, on such resignation being accepted, the director shall be deemed to have vacated his
office.]
14. Meetings of Board.—(1) The Board of directors of a Regional Rural Bank shall meet at such
time and place and shall observe such rules of procedure in regard to the transaction of business at its
meetings as may be prescribed.
(2) The Chairman of the Regional Rural Bank shall preside over every meeting of the Board, and, in
his absence, such director as the Chairman may generally, or in relation to any particular meeting,
authorise in this behalf shall preside; and, in the absence of both the Chairman and the director so
authorised, the directors present at the meeting shall elect one from among themselves to preside over the
meeting.
Explanation.—For the purposes of this sub-section, “absence” from a meeting means non-attendance
for any reason whatsoever at the meeting, or any part of the meeting during which any business is
transacted.
(3) All questions at a meeting of the Board shall be decided by a majority of the votes of the directors
present and voting; and, in case of equality of votes, the person presiding shall have a second or casting
vote.
1. Subs. by Act 73 of 1976, s. 6, for sub-section (4) (w.e.f. 11-6-1976).
2. Subs. by Act 1 of 1988, s. 8, for “The Central Government” (w.e.f. 28-9-1988).
3. Subs. by s. 8, ibid., for “Provided that” (w.e.f. 28-9-1988).
4. Subs. by s. 8, ibid., for “the Central Government” (w.e.f. 28-9-1988).
5. Subs. by s. 9, ibid., for sub-section (2) (w.e.f. 28-9-1988).
8
(4) No director shall, as a director, take part in the discussion of, or vote on, any contract, loan,
arrangement or proposal entered into or to be entered into, by or on behalf of the Regional Rural Bank, if
he is, in any way, whether directly or indirectly, interested in the contract, loan, arrangement or proposal
and, where a director is interested in any such matter, he shall, at the earliest possible opportunity,
disclose to the Board the nature of his interest in such contract, loan, arrangement or proposal, and where
he does so, his presence at the meeting shall not count for the purpose of forming any quorum at the time
of any such discussion or vote, and if he does vote, his vote shall be void:
Provided that nothing contained in this sub-section shall apply to such director by reason only of his
being—
(i) a shareholder (other than a director) holding not more than two per cent. of the paid-up capital
in any public company within the meaning of the Companies Act, 1956 (1 of 1956), or any
corporation established by or under any law for the time being in force in India or any co-operative
society, with which the Regional Rural Bank has entered into, or proposes to enter into, any contract,
loan, arrangement or proposal; or
(ii) a director of the Regional Rural Bank as such.
15. Committees of Board.—The Board may constitute such committees, whether consisting wholly
of directors or wholly of other persons or partly of directors and partly of other persons, as it may think
fit, for such purposes as it may decide.
16. Fees and allowances of directors and members of committees.—(1) Every director and every
member of a committee (other than the Chairman) shall be paid such fees and allowances as may be
determined by the Central Government:
Provided that no fees shall be paid to any director, or member of a committee, if he is an officer of the
Central Government, State Government, the Reserve Bank, 1
[National Bank,] Sponsor Bank or any other
bank.
(2) The allowances payable to a director or a member of a committee, who is an officer of the Central
Government, State Government, Reserve Bank,
1
[National Bank,] Sponsor Bank or any other bank, shall
be paid by the Government or bank by which such officer is employed; and the allowances and fees
payable to any other director or member of a committee shall be payable by the concerned Regional Rural
Bank.
17. Staff of Regional Rural banks.—(1) A Regional Rural Bank may appoint such number of
officers and other employees as it may consider necessary or desirable 2
[in such manner as may be
prescribed] for the efficient performance of its functions and may determine the terms and conditions of
their appointment and service:
Provided that it shall be lawful for a Sponsor Bank, if requested so to do by a Regional Rural Bank
sponsored by it, to send, 3
*** such number of officers or other employees on deputation to the Regional
Rural Bank as may be necessary or desirable for the efficient performance of its functions:
Provided further that the remuneration of officers and other employees appointed by a Regional Rural
Bank shall be such as may be determined by the Central Government, and, in determining such
remuneration, the Central Government shall have due regard to the salary structure of the employees of
the State Government and the local authorities of comparable level and status in the notified area.
(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or any
other law for the time being in force, no award, judgment, decree, decision or order of any industrial
tribunal, court or other authority, made before the commencement of this Act, shall apply to the terms and
conditions in relation to the persons appointed by a Regional Rural Bank.
(3) The officers and other employees of a Regional Rural Bank shall exercise such powers and
perform such duties as may be entrusted or delegated to them by the Board.