law: Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970  
  6.Payment of compensation.- 
  (1) Every existing bank shall be given by the Central Government
  
  such compensation in respect of the transfer, under section 4, to the
  
  corresponding new bank of the undertaking of the existing banks as is specified
  
  against each bank in the Second Schedule.
  
  
  (2) The amount of compensation referred to in sub-section (1) shall be given to
  
  every existing bank, at its option,
  (a) in cash (to be paid by cheque drawn on the
  
  Reserve Bank) in three equal annual installments, the amount of each
  
  installment carrying interest at the rate of four per cent per annum form the
  
  commencement of this Act, or
  (b) in saleable or otherwise transferable
  
  promissory notes or stock certificates of the Central Government issued and
  
  repayable at par, and maturing at the end of---------
  (i) ten years from the commencement of this
  
  Act and carrying interest from such commencement at the rate of four and a half
  
  per cent per annum, or
  (ii) thirty years from the commencement of
  
  this Act and carrying interest from such commencement at the rate of five and a
  
  half per cent per annum, or
  (c) partly in cash (to be paid by cheque drawn
  
  on the Reserve Bank) and partly in such number of securities specified in sub-clauses
  
  (i) or sub-clause (ii), or both, of clause (b), as may be required by the
  
  existing bank, or
  (d) partly, in such number of securities
  
  specified in sub-clause (i) of clause (b) and partly in such number of
  
  securities specified in sub-clause (ii) of that clause, as may be required by
  
  the existing bank.
  (3) The first of the three equal annual installments referred to
  
  in clause (a) of sub-section (2) shall be paid, and the securities referred to
  
  in clause (b) of that sub-section shall be issued, within sixty days from the
  
  date of receipt by the Central Government of the option referred to in that
  
  sub-section, or where no such option has been exercised, from the latest date
  
  before which such option ought to have been exercised.
  (4) The option referred to in sub-section (2) shall be exercised
  
  by every existing bank before the expiry of a period of three months from the
  
  appointed day (or within such further time, not exceeding three months, as the
  
  Central Government may, on the application of the existing bank, allow) and the
  
  option so exercised shall be final and shall not be altered or rescinded after
  
  it has been exercised.
  (5) Any existing bank which omits or fails to exercise the
  
  option referred to in sub-section (2), within the time specified in sub-section
  
  (4), shall be deemed to have opted for payment in securities specified in
  
  sub-clauses (I) of clause (b) of sub-section (2).
  (6) Notwithstanding anything contained in this section, any
  
  existing bank may, before the expiry of three months from the appointed day (or
  
  within such further time, not exceeding three months, as the Central Government
  
  may, on the application of the existing bank, allow) make an application in
  
  writing to the Central Government for an interim payment of an amount equal to
  
  seventy-five per cent of the amount of the paid-up capital of such bank, as on
  
  the commencement of this Act, indicating therein whether the payment is desired
  
  in cash or in securities specified in sub-section (2), or in both.
  (7) The Central Government shall, within sixty days from the
  
  receipt of the application referred to in sub-section (6), make the interim
  
  payment to the existing bank in accordance with the option indicated in such
  
  application.
  (8) The interim payment made to an existing bank under
  
  sub-section (7), shall be set off against the total amount of compensation
  
  payable to such existing bank under this Act and the balance of the
  
  compensation remaining outstanding after such payment shall be given to the
  
  existing bank in accordance with the option exercised, or deemed to have been
  
  exercised, under sub-section (4) or sub-section (5), as the case may be:
  Provided  that where any part of the interim payment is
  
  obtained by an existing bank in cash, the payment so obtained shall be set off,
  
  in the first instance, against the first installment of the cash payment
  
  referred to in sub-section (2), and in cash the payment so obtained exceeds the
  
  amount of the first installment, the excess amount shall be adjusted against
  
  the second installment and the balance of such excess amount if any, against
  
  the third installment of the cash payment.
  (9) Any payment purported to have been made to an existing bank
  
  under sub-section (3) of section 15 of the Banking Companies (Acquisition and
  
  Transfer of Undertakings) Act, 1969 (22 of 1969), shall be deducted by the
  
  Central Government from the amount of the interim payment made to such existing
  
  bank under sub-section (7), or where no such interim payment has been made,
  
  from the total amount of the compensation due to such existing bank, and the
  
  amount so deducted shall be paid by the Central Government to the corresponding
  
  new Bank.