Bank Company Acquisition & Transfer of Undertakings act 1970 Amendment

Bank Company Acquisition & Transfer of Undertakings act 1970 

The Bank company acquisition & transfer act 1970 Amendment is an act to provide for the acquisition and transfer of certain banking companies, having regard to their resources, coverage, size, and so on, in order to control the raises of the economy and to meet progressively, serve better, the needs of the development of the economy in tune with national policy and objectives for the matters connected to it. 

• The provisions under this Act except section 21, came into force on 19th July 1969.

Establishment of corresponding new banks and business thereof.-

1. On the commencement of this act, there shall be a constitution of such corresponding new banks as are outlined in the First schedule.
2. The paid-up capital of each corresponding new bank constituted under sub-section (1) shall until any provision is made in this behalf in any scheme made under section 13, be equal to the paid-up capital of the existing bank in relation to which it is the corresponding new bank.
3. The entire capital of each corresponding new bank shall stand vested in and allotted to the Government.
4. Every corresponding new bank shall be a body corporate with perpetual succession and a common seal and shall file a case and be sued in its name.
5. Each corresponding new bank shall carry on and transact the business of banking as defined in clause (b) of section 5 of the Banking Regulation Act, 1949, and may engage in one or more forms of business specified in sub-section (1) of section 6 of that Act, and shall have the power to acquire and hold property, whether movable or immovable, for the purposes of its business and to dispose of the same. 
6. Each corresponding new bank shall establish a reserve fund to which shall be transferred the share premiums and the balance, if any, standing to the credit of the existing bank in relation to which it is the corresponding new bank, and such further sums, if any, as may be transferred in accordance with the provisions of section 17 of the Banking Regulation Act, 1949.

Obligations of the Bank

• Section 13 of the banking companies act 1970 stipulates the banks to maintain the secrecy of their customer’s accounts and dealings with them. 
• However, there are exceptions:
  • When law requires
  • When the practices and usages among bankers warrant the exchange of information.

Conclusion

Now, that you have seen the basic guidelines, of the Bank Company Acquisition & Transfer of Undertakings act 1970 Amendment, click for the Bank Company Acquisition & Transfer of Undertakings act 1970 Amendment pdf. Through this blog, you must have understood the basic legal framework of this watershed act. This act was amended again in 1980. It is important to remember the legalities that go into this act for better understanding. The act of 1970 and the act of 1980 led to the nationalisation of banks in two phases.