The National Bank for Agriculture and Rural Development Act, 1981
Administered Ministry: Ministry of Finance / Department of Financial Services
Section
Section 38 Other functions of National Bank.
The National Bank--
(i) shall co-ordinate its operations and the operations of various institutions engaged in the field of rural credit and maintain expert staff to study all problems relating to agriculture and rural development and be available for consultation to the Central Government, the Reserve Bank, the State Governments and the other institutions engaged in the field of rural development;
(ii) may act as the agent for the Central Government or a State Government or the Reserve Bank in the transaction of any business in respect of loans and advances granted or to be granted, or bonds or debentures purchased or subscribed for, or to be purchased or subscribed for;
(iii) may provide facilities for training, for dissemination of information and the promotion of research including the undertaking of studies, researches, techno-economic and other surveys in the field of rural banking, agriculture and rural development and it may for the said purposes 1[make loans or advances or grants] including grants by way of provision for fellowships and chairs to any institution.
2[(iv) may provide technical, legal, financial, marketing and administrative assistance to any person engaged in agriculture and rural development activities;
(v) may provide consultancy services in the field of agriculture and rural development and other related matters in or outside India, on such terms and against such remuneration, as may be agreed upon;
(vi) may perform the functions entrusted to or required of the National Bank by any other law for the time being in force; and
(vii) do any other kind of business or undertake any other kind of activity which the Central Government or the Reserve Bank may authorise.]
(i) shall co-ordinate its operations and the operations of various institutions engaged in the field of rural credit and maintain expert staff to study all problems relating to agriculture and rural development and be available for consultation to the Central Government, the Reserve Bank, the State Governments and the other institutions engaged in the field of rural development;
(ii) may act as the agent for the Central Government or a State Government or the Reserve Bank in the transaction of any business in respect of loans and advances granted or to be granted, or bonds or debentures purchased or subscribed for, or to be purchased or subscribed for;
(iii) may provide facilities for training, for dissemination of information and the promotion of research including the undertaking of studies, researches, techno-economic and other surveys in the field of rural banking, agriculture and rural development and it may for the said purposes 1[make loans or advances or grants] including grants by way of provision for fellowships and chairs to any institution.
2[(iv) may provide technical, legal, financial, marketing and administrative assistance to any person engaged in agriculture and rural development activities;
(v) may provide consultancy services in the field of agriculture and rural development and other related matters in or outside India, on such terms and against such remuneration, as may be agreed upon;
(vi) may perform the functions entrusted to or required of the National Bank by any other law for the time being in force; and
(vii) do any other kind of business or undertake any other kind of activity which the Central Government or the Reserve Bank may authorise.]
1. Subs. by Act 55 of 2000, s. 23, for "make grants" (w.e.f. 1-2-2001).
2. Ins. by s. 23, ibid. (w.e.f. 1-2-2001).
2. Ins. by s. 23, ibid. (w.e.f. 1-2-2001).
Section 38A Promotion of subsidiaries.
1[38A. Promotion of subsidiaries.-- The National Bank may, in consultation with the Reserve Bank, promote, form or manage or associate itself in promotion, formation or management of companies, subsidiaries, affiliates, societies, trusts or such other association of persons, as it may deem fit, for the purpose of carrying out its functions under this Act.]
1. Ins. by s. 24, ibid. (w.e.f. 1-2-2001).
Section 38B Securitisation of debt.
1[38B. Securitisation of debt.--Notwithstanding anything contained in this Act, the National Bank may--
(a) create one or more trusts and transfer loans and advances granted by it, with or without the securities, to such trusts, for consideration;
(b) set aside loans or advances held by the National Bank and issue and sell securities based upon such loans or advances so set aside in the form of debt obligations, trust certificates of beneficial interest or other instruments, by whatever name called, and act as a trustee for the holders of such securities.]
(a) create one or more trusts and transfer loans and advances granted by it, with or without the securities, to such trusts, for consideration;
(b) set aside loans or advances held by the National Bank and issue and sell securities based upon such loans or advances so set aside in the form of debt obligations, trust certificates of beneficial interest or other instruments, by whatever name called, and act as a trustee for the holders of such securities.]
1. Ins. by s. 24, ibid. (w.e.f. 1-2-2001).
Section 38C Exemption from compulsory registration.
1[38C.Exemption from compulsory registration.--Notwithstanding anything contained in subsection (1) of section 17 of the Registration Act, 1908 (16 of 1908)--
(a) any instrument in the form of debt obligations or trust certificate of beneficial interest or any other instrument, by whatsoever name called, issued by the National Bank or the trust created by it to securitise the loans granted by it and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property; or
(b) any transfer of such instruments referred to in clause (a), shall not require compulsory registration.]
(a) any instrument in the form of debt obligations or trust certificate of beneficial interest or any other instrument, by whatsoever name called, issued by the National Bank or the trust created by it to securitise the loans granted by it and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property; or
(b) any transfer of such instruments referred to in clause (a), shall not require compulsory registration.]
1. Ins. by s. 24, ibid. (w.e.f. 1-2-2001).
Section 39 Incidental powers.
The National Bank may also do all such things as may be necessary or incidental to or consequential upon the exercise of its powers, discharge of its functions and the performance of its duties, under this Act, or under any other law for the time being in force.
Section 40 Deposits and investments.
1[40. Deposits and investments.--(1) The National Bank may invest its funds in promissory notes, stocks or securities of the Central Government or keep the moneys deposited with the Reserve Bank or with any agency of the Reserve Bank or with a State co-operative bank or a scheduled bank.
(2) Notwithstanding anything contained in sub-section (1) or section 30A, the National Bank may, for beneficial investment of its surplus funds, rediscount bills of exchange or promissory notes arising out of bona fide trade and commercial transactions and also lend repayable at call or short notice to a scheduled bank or any financial institution approved by the Reserve Bank, or invest in certificates of deposit and other instruments or schemes as may be approved by the Board.]
(2) Notwithstanding anything contained in sub-section (1) or section 30A, the National Bank may, for beneficial investment of its surplus funds, rediscount bills of exchange or promissory notes arising out of bona fide trade and commercial transactions and also lend repayable at call or short notice to a scheduled bank or any financial institution approved by the Reserve Bank, or invest in certificates of deposit and other instruments or schemes as may be approved by the Board.]
1. Subs. by s. 25, ibid., for section 40 (w.e.f. 1-2-2001).
Section 41 Credit information.
The National Bank may, for the purpose of the efficient discharge of its functions under this Act, collect from or furnish to the Central Government, the Reserve Bank or any banking company or such other financial institution as may be notified by the Central Government in this behalf, credit information or other information.
Explanation.--For the purposes of this section, the expressions "banking company" and "credit information" shall have the same meanings as in section 45A of the Reserve Bank of India Act, 1934 (2 of 1934).
Explanation.--For the purposes of this section, the expressions "banking company" and "credit information" shall have the same meanings as in section 45A of the Reserve Bank of India Act, 1934 (2 of 1934).
Section 42 National Rural Credit (Long Term Operations) Fund.
(1) The National Bank shall establish and maintain a Fund to be known as the National Rural Credit (Long Term Operations) Fund.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18) include,--
(a) such sums of money as the Central Government and the State Governments may contribute from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amount in the said Fund shall be applied by the National Bank only to provide financial assistance by way of loans and advances under section 23, section 24, sub-section (1) of section 25 or section 27 or for the purposes of section 26.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18) include,--
(a) such sums of money as the Central Government and the State Governments may contribute from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amount in the said Fund shall be applied by the National Bank only to provide financial assistance by way of loans and advances under section 23, section 24, sub-section (1) of section 25 or section 27 or for the purposes of section 26.
Section 43 National Rural Credit (Stabilisation) Fund.
(1) The National Bank shall establish and maintain a Fund to be known as the National Rural Credit (Stabilisation) Fund.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18) include,--
(a) such sums of money as the Central Government and the State Governments may contribute from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amounts in the said Fund shall be applied by the National Bank only to provide loans and advances under section 22.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18) include,--
(a) such sums of money as the Central Government and the State Governments may contribute from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amounts in the said Fund shall be applied by the National Bank only to provide loans and advances under section 22.
Section 44 Research and Development Fund.
(1) The National Bank shall establish and maintain a Fund to be known as the Research and Development Fund, to which shall be credited--
(a) such sums of money as are transferable to this Fund in accordance with section 47;
(b) such sums of money as the Board may contribute every year to this Fund from out of its annual profits; and
(c) such gifts, grants, donations or benefactions which the National Bank may receive and which the Board may earmark for this purpose.
(2) The Research and Development Fund shall be expended on matters of importance to agriculture, agricultural operations and rural development, including the provision of training and research facilities and the 1[making of loans or advances or grants] under clause (iii) of section 38.
(a) such sums of money as are transferable to this Fund in accordance with section 47;
(b) such sums of money as the Board may contribute every year to this Fund from out of its annual profits; and
(c) such gifts, grants, donations or benefactions which the National Bank may receive and which the Board may earmark for this purpose.
(2) The Research and Development Fund shall be expended on matters of importance to agriculture, agricultural operations and rural development, including the provision of training and research facilities and the 1[making of loans or advances or grants] under clause (iii) of section 38.
1. Subs. by Act 55 of 2000, s. 26, for "making of grants" (w.e.f. 1-2-2001).
Section 45 Reserve Fund and other Funds.
The National Bank shall establish a Reserve Fund 1[and other Funds] as the Board may consider necessary by transferring such sums as it may deem fit, out of its annual profits and out of receipts from gifts, grants, donations or benefactions, which it may receive.
1. Subs. by s. 27, ibid., for "and such other Funds" (w.e.f. 1-2-2001).
Section 46 Preparation of balance-sheet, etc., of National Bank.
(1) The balance-sheet and accounts of the National Bank shall be prepared and maintained in such form and manner as may be prescribed.
(2) The Board shall cause the books and accounts of the National Bank to be balanced and closed as on the thirtieth day of June 1[or such other date in each year as the Central Government may, by notification in the Official Gazette, specify].
2[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 balancing and closing of, or for other matters relating to, the books or accounts in respect of the concerned years.]
(2) The Board shall cause the books and accounts of the National Bank to be balanced and closed as on the thirtieth day of June 1[or such other date in each year as the Central Government may, by notification in the Official Gazette, specify].
2[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 balancing and closing of, or for other matters relating to, the books or accounts in respect of the concerned years.]
1. Subs. by Act 66 of 1988, s. 46, for ", each year" (w.e.f. 30-12-1988).
2. Ins. by s. 46, ibid. (w.e.f. 30-12-1988).
2. Ins. by s. 46, ibid. (w.e.f. 30-12-1988).
Section 47 Disposal of surplus.
After making provision for bad and doubtful debts, depreciation of assets and all other matters for which provision is necessary or expedient or which is usually provided for by bankers, and for the Funds referred to in sections 42, 43 and 45, the National Bank shall transfer--
(i) for a period of fifteen years, following the accounting year during which the National Bank is established, the amount remaining (hereafter in this section referred to as surplus) to the Research and Development Fund under section 44; and
1[(ii) after the expiry of the said period of fifteen years, the Board shall, after making provision for the Fund referred to in clause (i), disburse or spend the balance of the surplus in such manner as may be approved by the Board.]
(i) for a period of fifteen years, following the accounting year during which the National Bank is established, the amount remaining (hereafter in this section referred to as surplus) to the Research and Development Fund under section 44; and
1[(ii) after the expiry of the said period of fifteen years, the Board shall, after making provision for the Fund referred to in clause (i), disburse or spend the balance of the surplus in such manner as may be approved by the Board.]
1 . Subs. by Act 55 of 2000, s. 28, for clause (ii) (w.e.f. 1-2-2001).
Section 48 Audit.
(1) The accounts of the National Bank shall be audited by auditors duly qualified to act as auditors under sub-section (1) of 1[section 141 of the Companies Act, 2013 (18 of 2013)] who shall be appointed by the Central Government in consultation with the Reserve Bank, for such term and on such remuneration as the Central Government may fix.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the National Bank and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the National Bank and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the National Bank.
(3) The auditors may, in relation to the accounts of the National Bank, examine any director of the Board or any officer or other employee of the National Bank and shall be entitled to require from the Board or officers or employees of the National Bank such information and explanation as they may think necessary for the performance of their duties.
(4) The auditors shall make a report to the National Bank upon the annual balance-sheet and accounts examined by them and in every such report, they shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the National Bank and in case they had called for any explanation or information from the Board or any officer or other employee of the National Bank, whether it has been given and whether it is satisfactory.
(5) The National Bank shall furnish to the Central Government and the Reserve Bank within four months from the date on which the annual accounts of the National Bank are closed and balanced, a copy of its balance-sheet as on the close of that year together with a copy of the profit and loss account for the year and a copy of the auditors report and a report of the working of the National Bank during the relevant year, and the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament and cause the copies of the said balance-sheet, profit and loss account and auditors' report to be published in the Official Gazette.
(6) Without prejudice to anything contained in the preceding sub-sections, the Central Government may, at any time, appoint the Comptroller and Auditor General of India to examine and report upon the accounts of the National Bank and any expenditure incurred by him in connection with such examination and report shall be payable by the National Bank to the Comptroller and Auditor General of India.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the National Bank and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the National Bank and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the National Bank.
(3) The auditors may, in relation to the accounts of the National Bank, examine any director of the Board or any officer or other employee of the National Bank and shall be entitled to require from the Board or officers or employees of the National Bank such information and explanation as they may think necessary for the performance of their duties.
(4) The auditors shall make a report to the National Bank upon the annual balance-sheet and accounts examined by them and in every such report, they shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the National Bank and in case they had called for any explanation or information from the Board or any officer or other employee of the National Bank, whether it has been given and whether it is satisfactory.
(5) The National Bank shall furnish to the Central Government and the Reserve Bank within four months from the date on which the annual accounts of the National Bank are closed and balanced, a copy of its balance-sheet as on the close of that year together with a copy of the profit and loss account for the year and a copy of the auditors report and a report of the working of the National Bank during the relevant year, and the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament and cause the copies of the said balance-sheet, profit and loss account and auditors' report to be published in the Official Gazette.
(6) Without prejudice to anything contained in the preceding sub-sections, the Central Government may, at any time, appoint the Comptroller and Auditor General of India to examine and report upon the accounts of the National Bank and any expenditure incurred by him in connection with such examination and report shall be payable by the National Bank to the Comptroller and Auditor General of India.
1. Subs. by Act 7 of 2018, s. 12, for "section 226 of the Companies Act, 1956 (1 of 1956)"(w.e.f. 15-3-2018).
Section 49 Returns.
The National Bank shall furnish, from time to time, to the Central Government and to the Reserve Bank, such returns as the Central Government or the Reserve Bank may require.
Section 50 Staff of National Bank.
(1) The National Bank may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service.
(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the National Bank to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the National Bank and the Reserve Bank.
(3) Subject to the provisions of sub-section (6), at any time before the expiry of six months from the appointed day, the Reserve Bank may, in public interest, transfer to the National Bank, such members of the staff of Reserve Bank whom the Reserve Bank considers as engaged, or as suitable to be engaged, in attending to the work of a nature which is same or similar to that which the National Bank may require for its efficient functioning, and upon such transfer they shall be deemed to be appointed by the National Bank under sub-section (1) with effect from the date of such transfer:
Provided that every person so transferred may, before the expiry of a period of six months from the appointed day, or before the expiry of a period of thirty days from such transfer, whichever period expires later, elect to go back to the Reserve Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the Reserve Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the National Bank during the period he was a member of the staff of the National Bank.
(4) (a) Any member of the staff of the Reserve Bank who is not appointed under sub-section (3), may, if he so desires, make an application to the Reserve Bank within six months from the appointed day, to be considered for appointment as a member of the staff of the National Bank.
(b) The Reserve Bank may, in consultation with the National Bank, consider such application having regard to the suitability of the person so applying, the availability of vacancies in the National Bank, the exigencies of service in the Reserve Bank and the National Bank and such other factors as may be considered relevant in this regard, and, if the Reserve Bank is satisfied having regard to these factors, that such applicant is suitable for being so appointed recommend his appointment to the National Bank.
(c) The National Bank may thereupon, within eighteen months from the appointed day, appoint such a person applying under this sub-section, as a member of the staff of the National Bank, and on such appointment, such a person shall be deemed to have been appointed in the National Bank under sub-section (3):
Provided that the proviso to sub-section (3) and the proviso to sub-section (5) shall not apply in respect of such a person.
(5) Notwithstanding anything contained elsewhere in this Act or in any other law or in any contract, for the time being in force, at any time before the expiry of six months from the appointed day, the Reserve Bank may, if it considers it necessary in consultation with the National Bank so to do in the interest of the National Bank, transfer on promotion any member of the staff of the National Bank to the Reserve Bank, and on such transfer to the Reserve Bank, each such member of the staff shall be deemed to be a member of the staff of the Reserve Bank and shall be entitled to the same salary, emoluments and other conditions of service to which he was entitled immediately before the date of such transfer, including benefits, if any, arising directly out of such promotion:
Provided that every member of the staff who is transferred as aforesaid may, before the expiry of a period of six months from the appointed day or within thirty days from such transfer, whichever period expires later, elect to go back to the National Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the National Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the Reserve Bank during the period he was a member of the staff of the Reserve Bank.
(6) Every person,--
(a) who, immediately before the date appointed under sub-section (1) of section 16, is a member of the staff of the Agricultural Refinance and Development Corporation; or
(b) who is a member of the staff of the Reserve Bank but whose services are being utilised immediately before that date by the said Corporation,
shall be deemed to be appointed by the National Bank under sub-section (1) on the said date:
Provided that every member of the staff of the Reserve Bank, who is so deemed to be appointed, and who was not recruited specifically for utilisation in the Agricultural Refinance and Development Corporation, may, before the expiry of a period of six months from the appointed day or within a period of thirty days from the date appointed under sub-section (1) of section 16, whichever period expires later, elect to go back to the Reserve Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the Reserve Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the National Bank during the period he was a member of the staff of the National Bank.
(7) Notwithstanding anything contained in any other law or in any agreement, for the time being in force, no member of the staff shall be entitled to claim any compensation for, or in relation to any matter concerning, his transfer, appointment or as the case may be, return, under sub-sections (3) to (6) and no claim in respect thereof shall be entertained by any court, tribunal or other authority.
(8) Subject to the provisions of sub-section (10) and sub-section (11), every member of the staff of the Agricultural Refinance and Development Corporation or of the Reserve Bank who is deemed to be appointed as a member of the staff of the National Bank under this section, shall be deemed to have been appointed by the National Bank on the same salary, emoluments and other terms and conditions of service to which he was entitled immediately before his appointment in the National Bank.
(9) The provisions relating to superannuation benefits, namely, the regulations relating to provident fund and the rules relating to payment of gratuity and compassionate gratuity and any other provision relating to superannuation as are applicable to the staff of the Reserve Bank on the appointed day shall, so far as may be, apply to the staff of the National Bank, unless and until the National Bank alters or amends the same:
Provided that after the appointed day, any such alteration or amendment may be effected by the National Bank as regards provident fund regulations in accordance with section 60, and as regards the other rules in the manner they would have been altered or amended but for this sub-section:
Provided further that after the expiry of six months from the appointed day, the balances held in the Reserve Bank of India Employees Provident Fund to the credit of any member of the staff of the Reserve Bank whose services are transferred under this section to the National Bank and who does not opt to go back to the Reserve Bank, shall be transferred to, and held in, the Provident Fund of the National Bank on same or similar terms subject to which those balances were held earlier in the Reserve Bank of India Employees Provident Fund.
(10) Notwithstanding anything contained in any other law, settlement, or agreement, every person employed by the National Bank or whose services have been transferred to the National Bank under this Act, shall be liable to serve anywhere in India.
(11) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force, or in any award, judgment, decree, decision or order of any Industrial Tribunal, Court or other authority, or any settlement or agreement, made or entered into before the date of transfer to the National Bank of the services of any person under this section, the National Bank shall be free to alter, amend or repeal in such manner and to such extent it may consider necessary, any of the terms and conditions of service applicable to such persons whose services are so transferred to the National Bank and who are appointed in the National Bank under this section except that the National Bank shall not alter to their prejudice the terms relating to payment of salary and other emoluments, retirement benefits and eligibility for leave.
Explanation.--For the purposes of this section, "appointed day" means the date of establishment of the National Bank under section 3.
(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the National Bank to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the National Bank and the Reserve Bank.
(3) Subject to the provisions of sub-section (6), at any time before the expiry of six months from the appointed day, the Reserve Bank may, in public interest, transfer to the National Bank, such members of the staff of Reserve Bank whom the Reserve Bank considers as engaged, or as suitable to be engaged, in attending to the work of a nature which is same or similar to that which the National Bank may require for its efficient functioning, and upon such transfer they shall be deemed to be appointed by the National Bank under sub-section (1) with effect from the date of such transfer:
Provided that every person so transferred may, before the expiry of a period of six months from the appointed day, or before the expiry of a period of thirty days from such transfer, whichever period expires later, elect to go back to the Reserve Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the Reserve Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the National Bank during the period he was a member of the staff of the National Bank.
(4) (a) Any member of the staff of the Reserve Bank who is not appointed under sub-section (3), may, if he so desires, make an application to the Reserve Bank within six months from the appointed day, to be considered for appointment as a member of the staff of the National Bank.
(b) The Reserve Bank may, in consultation with the National Bank, consider such application having regard to the suitability of the person so applying, the availability of vacancies in the National Bank, the exigencies of service in the Reserve Bank and the National Bank and such other factors as may be considered relevant in this regard, and, if the Reserve Bank is satisfied having regard to these factors, that such applicant is suitable for being so appointed recommend his appointment to the National Bank.
(c) The National Bank may thereupon, within eighteen months from the appointed day, appoint such a person applying under this sub-section, as a member of the staff of the National Bank, and on such appointment, such a person shall be deemed to have been appointed in the National Bank under sub-section (3):
Provided that the proviso to sub-section (3) and the proviso to sub-section (5) shall not apply in respect of such a person.
(5) Notwithstanding anything contained elsewhere in this Act or in any other law or in any contract, for the time being in force, at any time before the expiry of six months from the appointed day, the Reserve Bank may, if it considers it necessary in consultation with the National Bank so to do in the interest of the National Bank, transfer on promotion any member of the staff of the National Bank to the Reserve Bank, and on such transfer to the Reserve Bank, each such member of the staff shall be deemed to be a member of the staff of the Reserve Bank and shall be entitled to the same salary, emoluments and other conditions of service to which he was entitled immediately before the date of such transfer, including benefits, if any, arising directly out of such promotion:
Provided that every member of the staff who is transferred as aforesaid may, before the expiry of a period of six months from the appointed day or within thirty days from such transfer, whichever period expires later, elect to go back to the National Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the National Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the Reserve Bank during the period he was a member of the staff of the Reserve Bank.
(6) Every person,--
(a) who, immediately before the date appointed under sub-section (1) of section 16, is a member of the staff of the Agricultural Refinance and Development Corporation; or
(b) who is a member of the staff of the Reserve Bank but whose services are being utilised immediately before that date by the said Corporation,
shall be deemed to be appointed by the National Bank under sub-section (1) on the said date:
Provided that every member of the staff of the Reserve Bank, who is so deemed to be appointed, and who was not recruited specifically for utilisation in the Agricultural Refinance and Development Corporation, may, before the expiry of a period of six months from the appointed day or within a period of thirty days from the date appointed under sub-section (1) of section 16, whichever period expires later, elect to go back to the Reserve Bank by exercising an option in writing to that effect, the option once exercised being final, and on the exercise of such option, the Reserve Bank shall, before the expiration of a period of eighteen months from the appointed day, take back such member of the staff and he shall be deemed to have been on deputation to the National Bank during the period he was a member of the staff of the National Bank.
(7) Notwithstanding anything contained in any other law or in any agreement, for the time being in force, no member of the staff shall be entitled to claim any compensation for, or in relation to any matter concerning, his transfer, appointment or as the case may be, return, under sub-sections (3) to (6) and no claim in respect thereof shall be entertained by any court, tribunal or other authority.
(8) Subject to the provisions of sub-section (10) and sub-section (11), every member of the staff of the Agricultural Refinance and Development Corporation or of the Reserve Bank who is deemed to be appointed as a member of the staff of the National Bank under this section, shall be deemed to have been appointed by the National Bank on the same salary, emoluments and other terms and conditions of service to which he was entitled immediately before his appointment in the National Bank.
(9) The provisions relating to superannuation benefits, namely, the regulations relating to provident fund and the rules relating to payment of gratuity and compassionate gratuity and any other provision relating to superannuation as are applicable to the staff of the Reserve Bank on the appointed day shall, so far as may be, apply to the staff of the National Bank, unless and until the National Bank alters or amends the same:
Provided that after the appointed day, any such alteration or amendment may be effected by the National Bank as regards provident fund regulations in accordance with section 60, and as regards the other rules in the manner they would have been altered or amended but for this sub-section:
Provided further that after the expiry of six months from the appointed day, the balances held in the Reserve Bank of India Employees Provident Fund to the credit of any member of the staff of the Reserve Bank whose services are transferred under this section to the National Bank and who does not opt to go back to the Reserve Bank, shall be transferred to, and held in, the Provident Fund of the National Bank on same or similar terms subject to which those balances were held earlier in the Reserve Bank of India Employees Provident Fund.
(10) Notwithstanding anything contained in any other law, settlement, or agreement, every person employed by the National Bank or whose services have been transferred to the National Bank under this Act, shall be liable to serve anywhere in India.
(11) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force, or in any award, judgment, decree, decision or order of any Industrial Tribunal, Court or other authority, or any settlement or agreement, made or entered into before the date of transfer to the National Bank of the services of any person under this section, the National Bank shall be free to alter, amend or repeal in such manner and to such extent it may consider necessary, any of the terms and conditions of service applicable to such persons whose services are so transferred to the National Bank and who are appointed in the National Bank under this section except that the National Bank shall not alter to their prejudice the terms relating to payment of salary and other emoluments, retirement benefits and eligibility for leave.
Explanation.--For the purposes of this section, "appointed day" means the date of establishment of the National Bank under section 3.
Section 51 Obligation as to fidelity and secrecy.
(1) The National Bank shall not, except as otherwise required by this Act or any other law, divulge any information relating to, or to the affairs of, its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the National Bank to divulge such information.
(2) Every director, member of a committee, auditor, officer or other employee of the National Bank or of the Reserve Bank, whose services are utilised by the National Bank under the provisions of this Act, shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.
1[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005 (30 of 2005).]
(2) Every director, member of a committee, auditor, officer or other employee of the National Bank or of the Reserve Bank, whose services are utilised by the National Bank under the provisions of this Act, shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.
1[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005 (30 of 2005).]
1. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).
Section 52 Defects in appointment not to invalidate acts, etc.
(1) No act or proceeding of the Board or of any committee of the National Bank shall be questioned on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Board or the committee, as the case may be.
(2) No act done by any person acting in good faith as a director of the Board or as a member of a committee of the National Bank shall become invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.
(2) No act done by any person acting in good faith as a director of the Board or as a member of a committee of the National Bank shall become invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.
Section 52A Agreement with National Bank on appointment of directors to prevail.
1[52A. Agreement with National Bank on appointment of directors to prevail.--(1) Where any agreement entered into by the National Bank with a company or a body corporate while granting loans and advances, provides for the appointment by the National Bank of one or more directors of such company or body corporate, such provisions and any appointment of directors made in pursuance thereof shall be valid and effective, notwithstanding anything to the contrary contained in 2[the Companies Act, 2013 (18 of 2013)] 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 or body corporate, 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 National Bank in pursuance of the agreement as aforesaid.
(2) Any director appointed as aforesaid shall--
(a) hold office during the pleasure of the National Bank and may be removed or substituted by any person by order in writing of the National Bank;
(b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto;
(c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.]
(2) Any director appointed as aforesaid shall--
(a) hold office during the pleasure of the National Bank and may be removed or substituted by any person by order in writing of the National Bank;
(b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto;
(c) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.]
1. Ins. by Act 55 of 2000, s. 29 (w.e.f. 1-2-2001).
2. Subs. by Act 7 of 2018, s. 13, for "the Companies Act, 1956 (1 of 1956)" (w.e.f. 15-3-2018).
2. Subs. by Act 7 of 2018, s. 13, for "the Companies Act, 1956 (1 of 1956)" (w.e.f. 15-3-2018).
Section 53 Protection of action taken under the Act.
No suit or other legal proceeding shall lie against the National Bank or any director or any officer or other employee of the National Bank or any other person authorised by the National Bank to discharge any functions under this Act for any loss or damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or of any other law or provision having the force of law.