43. State Bank may appoint officers and other employees.—2
[(1)] The State Bank may appoint
such number of officers, advisers and employees as it considers necessary or desirable for the efficient
performance of its functions, and determine the terms and conditions of their appointment and service.
3
[(2) The officers, advisers and employees of the State Bank shall individually or jointly or with other
officers, advisers and employees in a Local Committee exercise such powers and perform such duties as
may by general or special order, be entrusted or delegated to them by the Central Board or its executive
committee.]
4 [43A. Bonus.—(1) No officer, adviser or other employee [other than an employee within the
meaning of clause (13) of section 2 of the Payment of Bonus Act, 1965 (21 of 1965)] of the State Bank
shall be entitled to be paid any bonus.
1. Subs. by Act 27 of 2010, s. 29, for section 42 (w.e.f. 15-9-2010).
2. Section 43 renumbered as sub-section (1) thereof by Act 35 of 1964, s. 14 (w.e.f. 1-12-1964).
3. Subs. by Act 27 of 2010, s. 30, for sub-section (2) (w.e.f. 15-9-2010).
4. Ins. by Act 64 of 1984, s. 2 (w.e.f. 11-9-1984).
27
(2) No employee of the State Bank, being an employee within the meaning of clause (13) of section 2
of the Payment of Bonus Act, 1965 (21 of 1965), shall be entitled to be paid any bonus except in
accordance with the provisions of that Act.
(3) The provisions of this section shall have effect notwithstanding any judgment, decree or order of
any Court, tribunal or other authority and notwithstanding anything contained in any other provision of
this Act or in the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force
or any practice, usage or custom or any contract, agreement, settlement, award or other instrument.]
44. Obligation as to fidelity and secrecy.—(1) The State Bank shall observe, except as otherwise
required by law, the practices and usages customary among bankers, and, in particular, it shall not divulge
any information relating to or to the affairs of its constituents except in circumstances in which it is, in
accordance with the law or practice and usage customary among bankers, necessary or appropriate for the
State Bank to divulge such information.
(2) Every director, member of a Local Board or of a Local Committee, auditor, adviser, officer or
other employee of the State Bank shall, before entering upon his duties, make a declaration of fidelity and
secrecy as in the form set out in the Second Schedule.
1
[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit
Information Companies (Regulation) Act, 2005 (30 of 2005).]
45. Bar to liquidation of State Bank.—No provision of law relating to the winding up of companies
shall apply to the State Bank, and the State Bank shall not be placed in liquidation save by order of the
Central Government and in such manner as it may direct.
46. Indemnity of directors and members of Local Boards and Local Committees, etc.—(1)
Every director and every member of a Local Board or a Local Committee shall be indemnified by the
State Bank against all losses and expenses incurred by him in or in relation to the discharge of his duties
except such as are caused by his own wilful act or default.
(2) Neither a director nor a member of a Local Board or a Local Committee shall be responsible for
any loss or expense caused to the State Bank by the insufficiency or deficiency of the value of or title to
any property or security acquired or taken on behalf of the State Bank or by the insolvency or wrongful
act of any customer or debtor or by anything done in or in relation to the execution of the duties of his
office or otherwise than for his wilful act or default.
47. Defects in appointment or constitution not to invalidate acts or proceedings.—(1) No act or
proceeding of the Central Board or of a Local Board or a Local Committee shall be questioned on the
ground merely of the existence of any vacancy or defect in the constitution of the Board or Committee, as
the case may be.
(2) All acts done by any person acting in good faith as a director or as a member of a Local Board or
of a Local Committee shall, notwithstanding that there was some defect in his appointment or
qualifications, be as valid as if he was a director of the Central Board or a member of the Local Board or
the Local Committee, as the case may be.
48. [Power to remove difficulties] Omitted by the State Bank of India (Amendment) Act, 1964
(35 of 1964), s.15 (w.e.f. 1-12-1964).
49. Power of Central Government to make rules.—(1) The Central Government, in consultation
with the Reserve Bank, may, by notification in the Official Gazette, 2
[make rules to provide for all matters
for which provision is necessary or expedient for the purpose of giving effect to the provisions of this
Act].
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for—
(a) the procedure for the payment of compensation under this Act;
1. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).
2. Subs. by Act 48 of 1973, s. 18, for certain words (w.e.f. 31-12-1973).
28
(b) the determination of persons to whom the said compensation shall be payable in all cases,
including cases where shares in the Imperial Bank have been held by more than one person, or where
they have been transferred before the appointed day but the transfer has not been registered or where
the shareholder is dead;
1
[(c) the manner of appointment of a director under clause (ca) or clause (cb) 2*** of section 19,
and all other matters connected therewith or incidental thereto;]
3
[(d) the time and place of meeting of the Committee and the rules of procedure to be observed by
it under sub-section (6) of section 24A;
(e) the salary and allowances of the Administrator and the members of the committee under subsection (7) of section 24A.]
4
[(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after
it is made, before each House of Parliament while it is in session, for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the
session immediately following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that
any such modification or annulment shall be without prejudice to the validity of anything previously done
under that rule.]
50. Power of Central Board to make regulations.—(1) The Central Board may, after consultation
with the Reserve Bank and with the previous sanction of the Central Government 5
[by notification in the
Official Gazette] make regulations, not inconsistent with this Act and the rules made thereunder to
provide for all matters for which provision is expedient for the purpose of giving effect to the provisions
of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for—
(a) the nature of shares of the State Bank, the manner in which and the conditions subject to
which shares may be held and transferred and generally all matters relating to the rights and duties of
shareholders;
6
[(aa) the procedure for increasing issued capital by the issue of equity or preference shares under
sub-section (2) and the manner of accepting money for issued capital, forfeiture and re-issue of shares
under sub-section (5) , of section 5;
(ab) the manner of nominating an individual by one individual under sub-section (1) , the manner
of nominating an individual by the joint holders under sub-section (2), the manner of varying or
cancellation of nomination under sub-section (3), and the manner of nominating a minor under subsection (4) , of section 10A;]
7
[(b) the maintenance of register of shareholders, and the particulars to be entered in such register
in addition to those specified in section 13, the safeguards to be observed in the maintenance of
register of shareholders on computer 8
[floppies or diskettes or any other electronic form], the
inspection and closure of the register of shareholders and all other matters connected therewith;]
(c) the holding and conduct of elections under this Act, including the allocation of elected
directors to the various areas 9
[falling within the jurisdiction of each local head office], and the final
1. Ins. by Act 48 of 1973, s. 18 (w.e.f. 31-12-1973).
2. The words, brackets and figure “of sub-section (1)” omitted by Act 3 of 1994, s. 19 (w.e.f. 15-10-1993).
3. Ins. by Act 27 of 2010, s. 31 (w.e.f. 15-9-2010).
4. Ins. by Act 1 of 1984, s. 47 (w.e.f. 15-2-1984).
5. Ins. by Act 66 of 1988, s. 17 (w.e.f. 30-12-1988).
6. Ins. by Act 27 of 2010, s. 32 (w.e.f. 15-9-2010).
7. Subs. by Act 3 of 1994, s. 20, for clause (b) (w.e.f. 15-10-1993).
8. Subs. by Act 27 of 2010, s. 32,for “floppies or diskettes” (w.e.f. 15-9-2010).
9. Subs. by Act 3 of 1994, s. 20, for certain words (w.e.f. 15-10-1993).
29
determination of doubts or disputes regarding the qualifications of candidates for election or
regarding the validity of elections;
1
[(ca) the determination of areas falling within the jurisdiction of each local head office;]
2 [(d) the powers, functions and duties of Local Boards and the restrictions, conditions or
limitations, if any, subject to which they may be exercised or performed, the formation and
constitution of Local Committees (including the number of members of any such Committee) and of
Committees of Local Boards, the powers, functions and duties of such Committees, the holding of
meetings of Local Committees and Committees of Local Boards and the conduct of business thereat;]
(e) the fees and allowances which may be paid to directors, or members of Local Boards or Local
Committees for attending any meetings of the Central Board or of its committees or of the Local
Boards or Local Committees, as the case may be, or for attending to any other work of the State
Bank;
(f) the manner in which the business of the Central Board 3
[or of Local Boards] shall be
transacted and the procedure to be followed at the meetings thereof;
(g) the formation of committees of the Central Board and the delegation of powers and functions
of the Central Board to such committees and the conduct of business in such committees;
4
* * * * *
(i) the manner in which general meetings shall be convened, the procedure to be followed thereat
and the manner in which voting rights may be exercised;
(j) the holding of meetings of shareholders 5*** and the business to be transacted thereat;
(k) the manner in which notices may be served on behalf of the State Bank upon shareholders or
other persons;
(l) the provision of seals for the State Bank and the manner and effect of their use;
(m) the conduct and defence of legal proceedings and the manner of signing pleadings;
(n) the duties and conduct of officers, other employees, advisers and agents of the State Bank;
6
[(o) the establishment and maintenance of superannuation pension, provident or other funds for
the benefit of the employees of the State Bank or of the dependants of such employees or for the
purposes of the State Bank, and the granting of superannuation allowances, annuities and pensions
payable out of any such fund;]
(p) the form and manner in which contracts binding on the State Bank may be executed;
7
[(q) the terms, conditions, stipulations, restrictions and limitations, if any, in the transaction by
the State Bank of its businesses in regard to the advancing or lending of money or the discounting or
purchase of any instrument, negotiable or otherwise, with or without reference to any security,
purpose, amount, period or otherwise;]
(r) the conditions subject to which alone, advances may be made to directors, members of Local
Boards or of Local Committees or officers of the State Bank, or the relatives of such directors,
members or officers or to companies, firms or individuals with which or with whom such directors,
members, officers, or relatives, are connected as partners, directors, managers, servants, shareholders
or otherwise;
(s) the statements, returns, and forms that are required for the purposes of this Act;
1. Ins. by Act 3 of 1994, s. 20 (w.e.f. 15-10-1993).
2. Subs. by Act 35 of 1964, s. 16, for clause (d) (w.e.f. 1-12-1964).
3. Ins. by s. 16, ibid. (w.e.f. 1-12-1964).
4. Omitted by s. 16, ibid. (w.e.f. 1-12-1964).
5. The words “on branch registers” omitted by Act 3 of 1994, s. 20 (w.e.f. 15-10-1993).
6. Subs. by Act 26 of 1959, s. 10, for clause (o) (w.e.f. 28-8-1959).
7. Subs. by Act 48 of 1973, s. 19, for clause (q) (w.e.f. 31-12-1973).
30
(t) the payment of dividends, including interim dividends;
(u) generally for the conduct of the business of the State Bank.
1
[(2A) All regulations made under this section shall have effect from such earlier or later date as may
be specified in the regulations.]
(3) Notwithstanding anything contained in this section, the first regulations shall be made by the
Reserve Bank with the previous sanction of the Central Government, and thereupon shall be deemed to be
the regulations made by the Central Board under this section and shall have force accordingly until they
are amended or repealed.
2
[(4) Every regulation shall, as soon as may be after it is made under this Act by the Central Board, be
forwarded to the Central Government and that Government shall cause a copy of the same to be laid
before each House of Parliament, while it is in session, for a total period of thirty days, which may be
comprised in one session or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the regulation or both Houses agree that the regulation should not be made, the regulation
shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however,
that any such modification or annulment shall be without prejudice to the validity of anything previously
done under that regulation.]
3
[51. Requirements of foreign law to be complied within certain cases.—If, according to the laws
of any country outside India, the provisions of this Act by themselves are not effective to transfer to and
vest in the State Bank any asset or liability which forms part of the undertaking of the Imperial Bank and
which is situate in that country, the Imperial Bank shall take all such steps as may be required by the laws
of that country for the purpose of effecting or perfecting such transfer and vesting, and in connection
therewith the Imperial Bank may realise any asset and discharge any liability and transfer the net proceeds
thereof to the State Bank.]
52. [Amendment of Act 2 of 1934.] Rep. by the Repealing and Amending Act, 1960 (58 of 1960), s. 2
and the First Schedule (w.e.f. 26-12-1960).
53. [Amendment of Act 10 of 1949.] Rep. by s. 2 and the First Schedule, ibid.(w.e.f. 26-12-1960)
4
[54. [Amendment of Act 47 of 1920.] Rep. by s. 2 and the First Schedule, ibid. (w.e.f. 26-12-1960).]
55. No proceeding to lie in India against Imperial Bank after appointed day.—On and from the
appointed day, no person shall make any claim or demand or take any proceeding in India against the
Imperial Bank or a director, officer or other employee thereof in his capacity as such director, officer or
employee except in so far as may be necessary for enforcing the provisions of this Act or except in so far
as it relates to any offence committed by any such director, officer or employee.
56. References to the Imperial Bank, the Bank of Bengal, etc., in other laws.—On and from the
appointed day, any reference to the Imperial Bank or to the Bank of Bengal, the Bank of Madras or the
Bank of Bombay in any law (other than this Act or the Imperial Bank of India Act, 1920 (47 of 1920) or
in any contract or other instrument shall, except as otherwise provided in any general or special order
made by the Central Government, be deemed to be a reference to the State Bank.
57. Dissolution of Imperial Bank, etc.—(1) On such day as the Central Government may, by
notification in the Official Gazette, specify in this behalf the Imperial Bank shall stand dissolved, and the
Imperial Bank of India Act, 1920 (47 of 1920), shall stand repealed.
(2) On the day specified in the notification under sub-section (1), the State Bank shall pay to the
Reserve Bank a sum of ten lakhs of rupees.
1. Ins. by Act 48 of 1973, s. 19 (w.e.f. 31-12-1973).
2. Ins. by Act 1 of 1984, s. 48 (w.e.f. 15-2-1984).
3. Subs. by Act 33 of 1955, s. 5, for section 51 (w.e.f. 1-4-1957).
4. Ins. by s. 6, ibid. (w.e.f. 1-4-1957).
31
(3) If, on the day specified in the notification under sub-section (1), the Imperial Bank has in its
possession or custody any assets created on or after the appointed day, such assets shall be disposed of in
accordance with directions issued by the Central Government in this behalf.]