The Asian Development Bank Act, 1966 was enacted on May 29, 1966 to put into operation the international consensus reached out for the constitution and function of the Asian Development Bank and other matters dealt with in the Bank. The application of the Act extends to the entire Indian Territory. The word ‘agreement’ used under the Act means the constitution and function of international organization called the Asian Development.
The Act provides that from the Consolidated Fund of India the Parliament shall make necessary appropriations by suitable legislation such amount as mandatory for the purposes prescribed under the Act. The sum shall include the subscription to be paid by the Indian Government for the functioning of the Bank as per the provisions specified under the International Agreement. The payments, fee and other expenses to be paid by the Indian Government according to Article 25 of the International Agreement shall also be taken from the Consolidated Fund of India. It shall also include other payments to be made in favor of the Bank. In addition, the Central Government shall formulate and provide the notes which are interest free and non-negotiable to the Bank as provided under the terms of the agreement in any prescribed format. The Reserve Bank of India is entrusted under the Act to hold Indian currency of the Asian Development Bank as the depository.
The Act details the awarding of status and other protection, exceptions and rights on the Bank as well as to its officers and staffs. To comply with the international legal standards, the Act makes it compulsory to implement the provisions of the Agreement in India and provides that the selected terms of Agreement prescribed in the Schedule shall be strictly followed in India as well. But the proviso to the Act states that the terms shall not be interpreted to permit the Bank to import commodities to India without customs duty devoid of limitations on their following transaction. It shall also not include conferment on the Bank any immunity from charges that are part of the sale price of such commodities. Such implementation shall not exclude the Bank for the charges or tax for the services provided for them. The Central Government is empowered under the Act to alter the Schedule according to the alterations made to the Agreement which are already created and made applicable. The Act also authorizes the Central Government to formulate rules to reach the objective of the Agreement.
Moreover, the notification publicized as well as the rules formulated by the Central Government shall be laid before the Lok Sabha and Rajya Sabha immediately when Parliament is in session. If the Lok Sabha as well as Rajya Sabha concurs with respect to alterations to be made in the notification or rule such variation shall be effected or else the Houses be in agreement that the notification or rule shall not be publicized, then it will not be enforced. The position, exemption, rights and powers shall be given to the Bank to comply with its requirements and perform functions effectually. The Bank is considered to be legal person with the power to enter into lawful agreements, acquire and sell off properties and the power to litigate. The Bank is also exempted form judicial proceedings excluding the matters related with lending money, promise debts, purchase and sale of securities where legal actions are initiated against the bank.
Besides, the assets and other properties of the bank are exempted from search, demand, deduction, expropriation or other actions. The documents and records of the bank shall be unchallengeable irrespective of the location. The assets of the bank are exempted from limitations and tax so as to enable the functions of the bank successfully. The official interactions made by the members of the bank shall be privileged as provided under the Agreement. Hence, the municipal law shall abide by such provisions of the Agreement to adhere to the mandates enshrined in the Indian Constitution.