THE STATE BANK OF INDIA (SUBSIDIARY LAWS) AMENDMENT ACT 2007

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Act Number 30 of 2007, the state bank of India subsidiary laws amendment act 2007 was enacted on 18th June 2007. The main objective of the act is to make necessary amendments to the state bank of Saurashtra act 1950, the state bank of Hyderabad act 1956, and the state bank of India (subsidiary bank) act 1959. Act deals with the substituted section of the repealed acts. Section 2 of the act substitutes the old section 5 of the bank of Saurashtra act. Section 5 deals with the fixation of authorized capital of the bank as rupees 5 crores. The fixed capital can be reduced or increased as per the rules or order of the central government. According to the amendment of section 6 of the saurashtra bank act, the issued capital of the bank can be issued as fully paid up shares. According to the insertion of section 3(A) of the amendment act the issued capital can be equity shares or preference shares. As per section 3 (D), the shares can be accepted in respect of the provisions in section 63 of the state bank of India (subsidiary banks) act 1959.

Chapter 3 section 4 of the act substitutes section 9 of the state bank of Hyderabad act. According to section 9 the authorized capital was fixed to rupees five hundred crores. By virtue of section of the amendment act the authorized capital can be reduced or increased with the approval of Reserve bank of India. Section 10 of the act is amended by insertion of section 1 (A) which states the issued capital of the bank can be divided in to paid up shares with the approval of Reserve bank of India or state bank. Section 63 of state bank of subsidiary bank act 1959 is applicable as per section 3 (D).

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Section 1(A) substitutes section 7 in dividing the fully paid up shares. Section 8 empowers new bank to accept money in respect of shares issued to them. The unpaid shares can be forfeited and can be reissued in the prescribed manner. In the amendment of section 18 the word fifty five percent of the issued capital is substituted by fifty one percent.  The insertion of section 18 (A) empowers the shareholder for nomination. It is applicable to the registered share holder. A minor nominee of the registered share holder has the right to the shares at the death of the shareholder according to sub section 4. Section 10 is substituted by section 19 relating to the restriction of voting rights. Only the shareholder of the state bank is entitled to the righting votes. Section 11 is substituted for section 21 with subsections in keeping the register of the shareholders. Amendment of section 22 deals with the replacement of words in section 19. The words no notice of any trust is substituted.

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Amendment of section 27 is another important section. The meeting of board of Directors time place fixation of meetings and other procedures are stated in section 27. The suppression of board directors of subsidiary bank in certain circumstances is envisaged in Section 35(A). Insertion of section 40 A relates to the transfer of unpaid or unclaimed dividend to unpaid dividend account.  Amendment of section deals with the empowerment of employees, officers and advisors to perform their duties and power by general or special order which is delegated to them by the committee or board of directors. In the amendment of section 63 subsections 4 the words made under this act is substituted by the words “made under this section”. The state bank of subsidiary bank amendment act had contributed relevant substitutions to the various repealed act under the state bank of India.

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