law: Banking Regulation Act, 1949
  45. Power of Reserve Bank to apply to Central
  
  Government for suspension of business by a banking company and to prepare
  
  scheme of reconstitution or amalgamation
  (1) Notwithstanding anything contained in the
  
  foregoing provisions of this Part or in any other law or [any agreement or
  
  other instrument], for the time being in force, where it appears to the Reserve
  
  Bank that there is good reason so to do, the Reserve Bank may apply to the Central
  
  Government for an order of moratorium in respect of 229[a banking company].
  (2) The Central Government, after considering
  
  the application made by the Reserve Bank under sub-section (1), may make an
  
  order of moratorium staying the commencement or continuance of all actions and
  
  proceedings against the company for a fixed period of time on such terms and
  
  conditions as it thinks fit and proper and may from time to time extend the
  
  period so however that the total period of moratorium shall not exceed six
  
  months.
  (3) Except as otherwise provided by any
  
  directions given by the Central Government in the order made by it under
  
  subsection (2) or at any time thereafter, the banking company shall not during
  
  the period of moratorium make any payment to any depositors or discharge any
  
  liabilities or obligations to any other creditors.
  228[(4) During the period of moratorium, if
  
  the Reserve Bank is satisfied that:
  (a) in the public
  
  interest; or
  (b) in the interests
  
  of the depositors; or
  (c) in order to secure
  
  the proper management of the banking company; or
  (d) in the interest of
  
  the banking system of the country as a whole, it is necessary so to do, the
  
  Reserve Bank may prepare a scheme-
  (i) for the
  
  reconstruction of the banking company, or
  (ii)for the
  
  amalgamation of the banking company with any other banking institution (in this
  
  section referred to as "the transferee bank")
  (5) The scheme aforesaid may contain provision
  
  for all or any of the following matters, namely:
  (a) the constitution,
  
  name and registered office, the capital, assets, powers, rights, interests,
  
  authorities and privileges, the liabilities, duties and obligations of the
  
  banking company on its reconstruction or, as the case may be, of the transferee
  
  bank;
  (b) in the case of
  
  amalgamation of the banking company, the transfer to the transferee bank of the
  
  business, properties, assets and liabilities of the banking company on such
  
  terms and conditions as may be specified in the scheme;
  (c) any change in the
  
  Board of Directors, or the appointment of a new Board of Directors, of the
  
  banking company on its reconstruction or, as the case may be, of the transferee
  
  bank and the authority by whom, the manner in which, the other terms and
  
  conditions on which, such change or appointment shall be made and in the case
  
  of appointment of a new Board of Directors or of any Director, the period for
  
  which such appointment shall be made;
  (d) the alteration of
  
  the memorandum and articles of association of the banking company on its reconstruction
  
  or, as the case may be of the transferee bank for the purpose of altering the
  
  capital thereof or for such other purpose as may be necessary to give effect to
  
  the reconstruction or amalgamation;
  (e) subject to the
  
  provisions of the scheme, the continuation by or against the banking company on
  
  its reconstruction or, as the case maybe, the transferee bank, of any actions
  
  or proceedings pending against the banking company immediately before the date
  
  of the order of moratorium;
  (f) the reduction of
  
  the interest or rights which the members, depositors and other creditors have
  
  in or against the banking company before its reconstruction or amalgamation to
  
  such extent as the Reserve Bank considers necessary in the public interest or
  
  in the interests of the members, depositors and other creditors or for the
  
  maintenance of the business of the banking company;
  (g) the payment in
  
  cash or otherwise to depositors and other creditors in full satisfaction of
  
  their claim-
  (i) in respect of
  
  their interest or right in or against the banking company before its
  
  reconstruction or amalgamation; or
  (ii) where their
  
  interest or rights aforesaid in or against the banking company has or have been
  
  reduced under clause (f), in respect of such interest or rights as so reduced;
  (h) the allotment to
  
  the members of the banking company for shares held by them therein before its
  
  reconstruction or amalgamation [whether their interest in such shares has been
  
  reduced under clause (f) or not], of shares in the banking company on its
  
  reconstruction or, as the case may be, in the transferee bank and where any
  
  members claim payment in cash and not allotment of shares, or where it is not
  
  possible to allot shares to any members, the, payment in cash to those members
  
  in full satisfaction of their claim-
  (i) in respect of
  
  their interest in shares in the banking company before its reconstruction or
  
  amalgamation; or
  (ii) where such
  
  interest has been reduced under clause (f) in respect of their interest in
  
  shares as so reduced;
  (i) the continuance of
  
  the services of all the employees of the banking company (excepting such of
  
  them as not being workmen within the meaning of the Industrial Disputes Act,
  
  1947 (14 of 1947) are specifically mentioned in the scheme) in the banking
  
  company itself on its reconstruction or, as the case may be, in the transferee
  
  bank at the same remuneration and on the same terms and conditions of service,
  
  which they were getting or, as the case may be, by which they were being
  
  governed, immediately before the date of the order of moratorium:
  PROVIDED that the scheme shall
  
  contain a provision that:-
  (i) the banking
  
  company shall pay or grant not later than the expiry of the period of three
  
  years from the date on which the scheme is sanctioned by the Central
  
  Government, to the said employee the same remuneration and the same terms and
  
  conditions of service 229[as are, at the time of such payment or grant,
  
  applicable] to employees of corresponding rank or status of a comparable
  
  banking company to be determined for this purpose by the Reserve Bank (whose
  
  determination in this respect shall be final);
  (ii) the transferee
  
  bank shall pay or grant not later than the expiry of the aforesaid period of
  
  three years, to the said employees the same remuneration and the same terms and
  
  conditions of service [as are, at the time of such payment or grant,
  
  applicable] to the other employees of corresponding rank or status of the
  
  transferee bank subject to the qualifications and experience of the said
  
  employees being the same as or equivalent to those of such other employees of
  
  the transferee bank:
  PROVIDED FURTHER that if in any case
  
  under clause (ii) of the first proviso any doubt or difference arises as to
  
  whether the qualification and experience of any of the said employees are the
  
  same as or equivalent to the qualifications and experience of the other
  
  employees of corresponding rank or status of the transferee bank, 230[the doubt
  
  or difference shall be referred, before the expiry of a period of three years from
  
  the date of the payment or grant mentioned in that clause ], to the Reserve
  
  Bank whose decision thereon shall be final;
  (j) notwithstanding
  
  anything contained in clause (i) where any of the employees of the banking
  
  company not being workmen within the meaning of the Industrial Disputes Act,
  
  1947 (14 of 1947) are specifically mentioned in the scheme under clause (i), or
  
  where any employees of the banking company have by notice in writing given to
  
  the banking company or, as the case may be, the transferee bank at any time
  
  before the expiry of one month next following the date on which the scheme is
  
  sanctioned by the Central Government, intimated their intention of not becoming
  
  employees of the banking company on its reconstruction or, as the case may be,
  
  of the transferee bank, the payment to such employees of compensation, if any,
  
  to which they are entitled under the Industrial Disputes Act, 1947, and such
  
  pension, gratuity, provident fund and other retirement benefits ordinarily
  
  admissible to them under the rules or authorizations of the banking company
  
  immediately before the date of the order of moratorium;
  (k) any other terms
  
  and conditions for the reconstruction or amalgamation of the banking company;
  (l) such incidental,
  
  consequential and supplemental matters as are necessary to secure that the
  
  reconstruction or amalgamation shall be fully and effectively carried out.
  (6)(a) A copy of the scheme prepared by the
  
  Reserve Bank shall be sent in draft to the banking company and also to the
  
  transferee bank and any other banking company concerned in the amalgamation,
  
  for suggestions and objections, if any, within such period as the Reserve Bank
  
  may specify for this purpose;
  (b) the Reserve Bank
  
  may make such modifications, if any, in the draft scheme as it may consider
  
  necessary in the light of the suggestions and objections received from the
  
  banking company and also from the transferee bank, and any other banking
  
  company concerned in the amalgamation and from any members, depositors or other
  
  creditors of each of those companies and the transferee bank.
  (7) The scheme shall thereafter be placed
  
  before the Central Government for its sanction and the Central Government may
  
  sanction the scheme without any modifications or with such modifications as it
  
  may consider necessary; and the scheme as sanctioned by the Central Government
  
  shall come into force on such date as the Central Government may specify in
  
  this behalf:
  PROVIDED that different dates may be specified
  
  for different provisions of the scheme.
  [(7A) The sanction accorded by the Central
  
  Government under sub-section (7), whether before or after the commencement of
  
  section 21 of the Banking Law (Miscellaneous Provisions) Act, 1963 (55 of
  
  1963), shall be conclusive evidence that all the requirements of this section
  
  relating to reconstruction, or, as the case may be, amalgamation have been
  
  complied with and a copy of the sanctioned scheme certified in writing by an
  
  officer of the Central Government to be a true copy thereof, shall, in all legal
  
  proceedings (whether in appeal or otherwise and whether instituted before or
  
  after commencement of the said section 21), be admitted as evidence to the same
  
  extent as the original scheme.]
  (8) On and from the date of coming into
  
  operation of the scheme or any provision thereof, the scheme or such provision
  
  shall be binding on the banking company or, as the case may be, on the
  
  transferee bank and any other banking company concerned in the amalgamation and
  
  also on all the members, depositors and other creditors and employees of each
  
  of those companies and of the transferee bank, and on any other person having
  
  any right or liability in relation to any of those companies or the transferee
  
  bank 231[including the trustees or other persons managing, or connected in any
  
  other manner with, any provident fund or other fund maintained by any of those
  
  companies or the transferee bank.]
  (9) 232[On and from the date of the coming
  
  into operation of, or as the case may be, the date specified in this behalf in
  
  the scheme], the properties and assets of the banking company shall, by virtue
  
  of and to the extent provided in the scheme, stand transferred to, and vest in,
  
  and the liabilities of the banking company shall, by virtue of and to the
  
  extent provided in the scheme, stand transferred to, and become the liabilities
  
  of, the transferee bank.
  (10) If any difficulty arises in giving effect
  
  to the provisions of the scheme, the Central Government may by order do
  
  anything not inconsistent with such provision which appears to it necessary or
  
  expedient for the purpose of removing the difficulty.
  (11) Copies of the scheme or of any order made
  
  under sub-section(10) shall be laid before both Houses of Parliament, as soon
  
  as may be, after the scheme has been sanctioned by the Central Government, or,
  
  as the case may be, the order has been made.
  (12) Where the scheme is a scheme for
  
  amalgamation of the banking company, any business acquired by the transferee
  
  bank under the scheme or under any provision thereof shall, after the coming
  
  into operation of the scheme or such provision, be carried on by the transferee
  
  bank in accordance with the law governing the transferee bank, subject to such
  
  modifications in that law or such exemptions of the transferee bank from the
  
  operation of any provisions thereof as the Central Government on the
  
  recommendation of the Reserve Bank may, by notification in the Official
  
  Gazette, make for the purpose of giving full effect to the scheme:
  PROVIDED that no such modification or exemption
  
  shall be made so as to have effect for a period of more than seven years from
  
  the date of the acquisition of such business.
  (13) Nothing in this section shall be deemed
  
  to prevent the amalgamation with a banking institution by a single scheme of
  
  several banking companies in respect of each of which an order of moratorium
  
  has been made under this section.
  (14) The provisions of this section and of any
  
  scheme made under it shall have effect notwithstanding anything to the contrary
  
  contained in any other provisions of this Act or in any other law or any
  
  agreement, award or other instrument for the time being in force.
  (15) In this section, "banking
  
  institution" means any banking company and includes the State Bank of India or 231[a subsidiary
  
  bank or a corresponding new bank.]]
  [Explanation: Reference in this
  
  section to the terms and conditions of service as applicable to an employee
  
  shall not be construed as extending to the rank and status of such employee.]