President Promulgates Banking Regulation (Amendment) Ordinance, 2020

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....resident Promulgates Banking Regulation (Amendment) Ordinance, 2020 <br>FEMA & RBI<br>Dated:- 27-6-2020<br><BR>President Promulgates Banking Regulation (Amendment) Ordinance, 2020 Amendments to ensure better management & sound regulation of Cooperative banks Facilitates making of reconstruction/amalgamation Scheme in the interest of public/depositors/banking/proper banking company management In pursuance of the commitment to ensure safety of depositors across banks, the President has promulgated the Banking Regulation (Amendment) Ordinance, 2020. (Click to view the Gazette notification on the Ordinance) The Ordinance amends the Banking Regulation Act, 1949 as applicable to Cooperative Banks. The Ordinance seeks to protect the interests ....

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....of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to Co-operative Banks as well for sound banking regulation, and by ensuring professionalism and enabling their access to capital. The amendments do not affect existing powers of the State Registrars of Co-operative Societies under state co-operative laws. The amendments do not apply to Primary Agricultural Credit Societies (PACS) or co-operative societies whose primary object and principal business is long-term finance for agricultural development, and which do not use the word "bank" or "banker" or "banking" and do not act as drawees of cheques. The Ordinance also amends Section 45 o....

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....f the Banking Regulation Act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors and the banking system and for securing its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system. ============= Document 1 रजिस्ट्री सं० डी० एल०- ()04/0007/2003-20 REGISTERED NO. DL―(N)04/0007/2003-20 सत्यमेव जयते भारत का राजपत्र The Gazette of India सी. जी. - डà¥....

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....€. एल. - अ.-26062020-220203 CG-DL-E-26062020-220203 असाधारण EXTRAORDINARY भाग II - खण्ड 1 PART II ― Section 1 सं० 37] No. 37] प्राधिकार से प्रकाशित PUBLISHED BY AUTHORITY नई दिल्ली, शुक्रवार, जून 26, 2020 / आषाढ़ 5, 1942 (शक ) NEW DELHI, FRIDAY, JUNE 26, 2020/ASHADHA 5, 1942 (SAKA) इस भाग में भिन्न पृषà....

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....¥à¤  संख्या दी जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके। Separate paging is given to this Part in order that it may be filed as a separate compilation. MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 26th June, 2020/Ashadha 5, 1942 (Saka) THE BANKING REGULATION (AMENDMENT) ORDINANCE, 2020 No. 12 OF 2020 Promulgated by the President in the Seventy-first Year of the Republic of India. An Ordinance further to amend the Banking Regulation Act, ....

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....1949. WHEREAS the Banking Regulation (Amendment) Bill, 2020 has been introduced in the House of the People on the 3rd day of March, 2020; AND WHEREAS the aforesaid Bill could not be taken up for consideration and passing in the House of the People; AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance: 2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— 10 of 1949. 1. (1) This Ordinance may be called the Banking Short title and Regulation (Amendment) Ordina....

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....nce, 2020. (2) It shall come into force at once, except section 4, which shall come into force on such date as the Central Government may by notification, appoint: Provided that different dates may be appointed for state co-operative banks, central co-operative banks and primary co-operative banks and any reference in any such provision to the commencement of this Ordinance shall be construed as a reference to the coming into force of that provision. commencement. 2. In the Banking Regulation Act, 1949 (hereinafter Substitution of referred to as the principal Act), for section 3, the following section shall be substituted, namely: - new section for section 3. "3. Notwithstanding anything contained in the Act not to apply Na....

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....tional Bank for Agriculture and Rural Development 61 of 1981. Act, 1981, this Act shall not apply to- (a) a primary agricultural credit society; or (b) a co-operative society whose primary object and principal business is providing of long-term finance for agricultural development, if such society does not use as part of its name, or in connection with its business, the words “bank”, “banker" or "banking" and does not act as drawee of cheques.". 3. In section 45 of the principal Act,― (i) in the marginal heading, for the word "reconstitution", the word “reconstruction" shall be substituted; (ii) in sub-section (3), after the words "other creditors", the words “or grant any loans or advances....

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.... or make investments in any credit instruments" shall be inserted; (iii) in sub-section (4), after the words “During the period of moratorium”, the words “or at any other time" shall be inserted; to certain co- operative societies. Amendment of section 45. SEC. 1] 1 of 1956. THE GAZETTE OF INDIA EXTRAORDINARY (iv) in sub-section (5), in clauses (e), (i) and (j), for the words "date of the order of moratorium", the words "reconstruction or amalgamation" shall be substituted; (v) in sub-section (6), in clause (a), for the word "amalgamation", the words "reconstruction or amalgamation" shall be substituted; (vi) in sub-section (15), the words "or a subsidiary bank" shall be omitted. 4. In section 56 of ....

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....the principal Act,- (A) in the opening portion, for the words "The provisions of this Act, as in force for the time being,”, the words "Notwithstanding anything contained in any other law for the time being in force, the provisions of this Act" shall be substituted; (B) in clause (a), after sub-clause (ii), the following sub-clauses shall be inserted, namely:― ‘(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, 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; ....

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.... (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;'; (C) clause (d) shall be omitted; (D) in clause (e), sub-clauses (i) and (iii) shall be omitted; (E) in clause (f), in section 7 as so substituted, in sub-section (2),- 3 Amendment of section 56. 4 THE GAZETTE OF INDIA EXTRAORDINARY Issue and regulation of paid-up share capital and securities by co- operative banks. (I) in clause (b), the words "or co-operative land mortgage banks" shall be omitted; (II) in clause (c), in sub-clause (ii), the words "or a co....

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....-operative land mortgage bank” shall be omitted; (F) clauses (fi), (fii) and (g) shall be omitted; (G) for clause (i), the following clause shall be substituted, namely:― ‘(i) for section 12, the following section shall be substituted, namely:― "12. (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 co....

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....nditions 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.";'; (H) clauses (1), (n) and (p) shall be omitted; (I) in clause (q), sub-clauses (ii) and (iv) shall be omitted; (J) clauses (r), (ria) and (sa) shall be omitted; (K) in clause (t), sub-clause (i) shall be omitted; [PART II— SEC. 1] THE GAZETTE ....

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....OF INDIA EXTRAORDINARY (L) clauses (u), (v), (x), (y), (z) and (za) shall be omitted; (M) in clause (zaa),- (a) in section 36AAA as so inserted,- (i) for the words "multi-State co-operative bank”, wherever they occur, the words "co- operative bank" shall be substituted; (ii) in sub-section (1), the following proviso shall be inserted, namely:― “Provided that in the case of a co-operative bank registered with the Registrar of Co- operative 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."; (iii) after sub-section (9), the following sub- section shall be inserte....

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....d, namely:- "(10) The provisions of section 36ACA shall not apply to a co-operative bank."; (b) section 36AAB as so inserted shall be omitted; (N) for clause (zb), the following clause shall be substituted, namely:- "(zb) Part IIC shall be omitted;"; (O) in clause (zc), sub-clause (i) shall be omitted; (P) clauses (zd) and (zf) shall be omitted; (Q) for clause (zg), the following clause shall be substituted, namely:- ‘(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 6 THE GAZETTE OF INDIA EXTRAORDINARY [PART II― SEC. 1] ....

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....Power to exempt co-operative banks in certain cases. (R) clause (zh) shall be omitted; (S) for clause (zj), the following clause shall be substituted, namely:— ‘(zj) after section 53, the following section shall be inserted, namely:― “53A. 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 a....

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....pply 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.”;'. RAM NATH KOVIND, President. DR. G. NARAYANA RAJU, Secretary to the Govt. of India. UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI-110002 AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI-110054. MGIPMRND-158GI-26-06-2020. SUBIR NARAYA<BR> News - Press release - PIB....