Section 4   [ View Judgements ]

Amendment of section 42


In section 42 of the principal Act, -



(a) in sub-section (1),-



(i) for the words "five per cent of the demand liabilities and two per cent.of the time liabilities" the words "three per cent.of the total of the demand and time liabilities" shall be substituted;



(ii) for the proviso, the following proviso shall be substituted namely-



"Provided that the Bank may, by notification in the Gazette of India, increase the said rate to such higher rate as may be specified in the notification so however that the rate shall not be more than fifteen per cent.of the total of the demand and time liabilities."



(iii) in the Explanation in clause (c), for the words and brackets "Refinance Corporation for Industry (Private) Limited " the words "Refinance Corporation for Industry Limited shall be substituted



(b) in sub-section (1A),-



(i) for the words "rates specified in the notification such additional balance being calculated with reference to the excess of the demand and time liabilities of the bank as shown in the return referred to in sub-section (2) over its demand and time liabilities", the words "rate specified in the notification such additional balance being calculated in the notification such additional balance being calculated with reference to the excess of the total of the demand and time liabilities of the bank as shown in the return referred to in sub-section (2) over the total of its demand and time liabilities shall be substituted;



(ii) the proviso shall be omitted;



(c) after sub-section (1A) the following sub-section shall be inserted namely-



"(1AA) Notwithstanding anything contained in subsection (1) or sub-section (1A), it shall not be necessary for any scheduled bank to maintain with the Bank any balance which shall be more than fifteen per cent.of the total of its demand and time liabilities as shown in the return referred to in sub-section (2);";



(d) in sub-section (1B) the following proviso shall be inserted at the end, namely-



"Provided further that where the Bank does not, under sub-section (5), demand the payment of the penalty imposed by sub-section (3), it may pay interest at such rate or rates as may be determined by the Bank from time to time on the amount actually maintained with it by the scheduled bank, notwithstanding that such amount is less than the balance required to be maintained in pursuance of a notification issued under the proviso to sub-section (1) of under sub-section (1A)"



(e) for sub-section (5), the following sub-section shall be substituted namely-



"(5) (a) The penalties imposed by sub-sections (3) and (4) shall be payable within a period of fourteen days from the date on which a notice issued by the Bank demanding the payment of the same is served on the schedule bank, and in the event of a failure of the scheduled bank to pay the same within such period may be levied by a direction of the principal civil court having jurisdiction in the area where an office of the defaulting bank is situated, such direction to be made only upon an application made in this behalf to the court by the Bank;



(b) When the court makes a direction under clause (a) it shall issue a certificate specifying the sum payable by the scheduled bank and every such certificate shall be enforce in the same manner as if it were a decree made by the court in a suit;



(c) notwithstanding anything contained in this section if the Bank is satisfied that the defaulting bank had sufficient cause for its failure to comply with the provisions of sub-section (1) (1A), or (2) it may not demand the payment of the penal interest or the penalty as the case may be"

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