law: Banking Regulation Act, 1949
  56. Act to apply to Co-operative Societies
  
  subject to modifications
  The provisions of this Act, as in force for
  
  the time being, shall apply to, or in relation to, co-operative societies as
  
  they apply to, or in relation to, banking companies subject to the following
  
  modifications, namely,-
  (a) throughout this Act, unless the context
  
  otherwise requires-
  (i) references to a
  
  "banking company" or "the company" or "such
  
  company" shall be construed as references to a Co-operative Bank,
  (ii) reference to
  
  "commencement of this Act" shall be construed as reference to
  
  commencement of the Banking Laws (Application to Co-operative Societies) Act,
  
  1965 (23 of 1965);
  (b) in section 2, the words and figures
  
  "the Companies Act, 1956 (1 of 1956), and" shall be omitted;
  (c) in section 5- 273[(1) after clause (cc),
  
  the following clauses shall be inserted, namely,-
  (cci) "Co-operative Bank" means a
  
  State Co-operative Bank, a Central Co-operative Bank and a primary Co-operative
  
  Bank;
  (ccii) "co-operative credit society"
  
  means a co-operative society, the primary object of which is to provide
  
  financial accommodation to its members and includes a co-operative land
  
  mortgage bank;
  (cciii) "Director", in relation to a
  
  co-operative society, includes a member of any committee or body for the time
  
  being vested with the management of the affairs of that society;
  (cciv) "primary agricultural credit
  
  society" means a co-operative society-
  (1) the primary object
  
  or principal business of which is to provide financial accommodation to its
  
  members for agricultural purposes or for purposes connected with agricultural
  
  activities (including the marketing of crops); and
  (2) the bye-laws of
  
  which do not permit admission of any other co-operative society as a member:
  PROVIDED that this sub-clause
  
  shall not apply to the admission of a Co-operative Bank as a member by reason
  
  of such Co-operative Bank subscribing to the share capital of such co-operative
  
  society out of funds provided by the State Government for the purpose;
  (ccv) "primary Co-operative Bank means a
  
  co-operative society, other than a primary agricultural credit society-
  (1) the primary object
  
  or principal business of which is the transaction of banking business;
  (2) the paid-up share
  
  capital and reserves of which are less than one lakh of rupees; and
  (3) the bye-laws of
  
  which do not permit admission of any other co-operative society as a member:
  PROVIDED that this sub-clause
  
  shall not apply to the admission of a Co-operative Bank as a member by reason
  
  of such co-operative Bank subscribing to the share capital of such co-operative
  
  society out of funds provided by the State Government for the purpose;
  (ccvi) "primary credit society"
  
  means a co-operative society, other than a primary agricultural credit society-
  
  
  (1) the primary object
  
  or principal business of which is the transaction of banking business;
  (2) the paid up share
  
  capital and reserves of which are less than one lakh of rupees; and
  (3) the bye-laws of
  
  which do not permit admission of any other co-operative society as a member:
  PROVIDED that this sub-clause
  
  clause shall not apply to the admission of a Co-operative Bank as a member by
  
  reason of such Co-operative Bank subscribing to the share capital of such
  
  co-operative society out of funds provided by the State Government for the
  
  purpose.
  Explanation: If any dispute arises
  
  as to the primary object or principal business of any co-operative society
  
  referred to in clauses (cciv), (ccv) and (ccvi), a determination thereof by the
  
  Reserve Bank shall be final;
  (ccvii) "Central Co-operative Bank",
  
  "co-operative society", "primary rural credit society" and
  
  "State Co-operative Bank" shall have the meanings respectively
  
  assigned to them in the National Bank for Agricultural and Rural Development
  
  Act, 1981 (61 of 1981)];
  (ii) clauses (ff) (h)
  
  and (hb) shall be omitted;]
  (d) for section 5A, the following section
  
  shall be substituted, namely:-
  "5A. Act to override bye-laws, etc.-
  (1) The provisions of
  
  253[this Act] shall have effect, notwithstanding anything to the contrary
  
  contained in the bye-laws of a co-operative society, or in any agreement
  
  executed by it, or in any resolution passed by it in general meeting, or by its
  
  Board of Directors or other body entrusted with the management of its affairs,
  
  whether the same be registered, executed or passed, as the case may be, before
  
  or after the commencement of the Banking Laws (Application to Co-operative
  
  Societies) Act, 1965 (23 of 1965).
  (2) Any provision
  
  contained in the bye-laws, agreement or resolution aforesaid shall, to the
  
  extent to which it is repugnant to the provisions of 274[this Act], become or
  
  be void, as the case may be.";
  (e) in section 6, in sub-section (1)-
  (i) in clause (b), the
  
  words "but excluding the business of a Managing Agent or Secretary and
  
  Treasurer of a company" shall be omitted;
  (ii) in clause (d),
  
  after the word "company", the words "co-operative society"
  
  shall be inserted;
  (iii) in clause (m)
  
  after the word "company", the words "or co-operative
  
  society" shall be inserted;
  253[(f) for section 7, the following section
  
  shall be substituted namely :-
  7. Use of words "bank" "banker”
  
  or "banking"
  (1) No co-operative
  
  society other than a Co-operative Bank shall use as part of its name or in
  
  connection with its business any of the words "bank",
  
  "banker", or "banking", and no co-operative society shall
  
  carry on the business of banking in India unless it uses as part of its name at
  
  least one of such words.
  (2) Nothing in this
  
  section shall apply to-
  (a) a primary credit
  
  society, or
  (b) a co-operative
  
  society formed for the protection of the mutual interest of Co-operative Banks
  
  or co-operative land mortgage banks, or
  (c) any co-operative society,
  
  not being a primary credit society, formed by the employees of-
  (i) a banking company
  
  or the State Bank of India or a corresponding new bank or a subsidiary bank of
  
  such banking company, State Bank of India or a corresponding new bank, or
  (ii) a Co-operative
  
  Bank or a primary credit society or a co-operative land mortgage bank, in so
  
  far as the words "bank", "banker”, or "banking" appear
  
  as part of the name of the employer bank, or as the case may be, of the bank,
  
  whose subsidiary the employer bank is.]
  (fi) in section 8, for
  
  the proviso, the following proviso shall be substituted, namely,-
  "PROVIDED that this section shall
  
  not apply-
  (a) to any such business as aforesaid which
  
  was in the course of being transacted on the commencement of clause (iii) of
  
  section 42 of the Banking Laws (Amendment) Act, 1983 (1 of 1984), so, however,
  
  that the said business shall be completed before the expiry of one year from
  
  such commencement; or
  (b) to any business as is specified in
  
  pursuance of clause (o) of sub-section (1) of section 6;";
  (fii) in section 9, for the second proviso,
  
  the following provisos shall be substituted, namely:-
  "PROVIDED FURTHER that in the case
  
  of a primary credit society which becomes a primary Co-operative Bank after the
  
  commencement of clause (iii) of section 42 of the Banking Laws (Amendment) Act,
  
  1983 (1 of 1984), the period of seven years shall commence from the day it so
  
  becomes a primary Co-operative Bank:
  PROVIDED ALSO that the Reserve Bank
  
  may, in any particular case, extend the aforesaid period of seven years by such
  
  period as it may consider necessary where it is satisfied that such extension
  
  would be in the interests of the depositors of the Co-operative Bank."];
  (g)Sections 10, 10A,10B, LOBB, 10C1 and 10D1
  
  shall be omitted;
  (h) for section 11, the following section
  
  shall be substituted, namely,-
  11. Requirement as to minimum paid-up capital
  
  and reserves-(1) Notwithstanding any law relating to co-operative societies for
  
  the time being in force, no Co-operative Bank shall commence or carry on the
  
  business of banking in India unless the aggregate value of its paid-up capital
  
  and reserves is not less than one lakh of rupees:
  PROVIDED that nothing in this sub-section shall
  
  apply to-
  (a) any such bank
  
  which is carrying on such business at the commencement of the Banking Laws
  
  (Application to Co-operative Societies) Act, 1965 (23 of 1965), for a period of
  
  three years from such commencement; or
  (b) to a primary
  
  credit society which becomes a primary Co-operative Bank after such
  
  commencement, for a period of two years from the date it so becomes a Primary
  
  Co-operative Bank or for such further period not exceeding one year as the
  
  Reserve Bank, having regard to the interests of the depositors of the Primary
  
  Co-operative Bank, may think fit in any particular case to allow.
  (2) For the purposes of this section, "value" 
  
  means the real or exchangeable value and not the nominal value which may be 
  
  shown in the books of the Co-operative Bank concerned
  (3) If any dispute arises in computing the
  
  aggregate value of the paid-up capital and reserves of any such Co-operative
  
  Bank, a determination thereof by the Reserve Bank shall be final for the
  
  purpose of this section.'
  (i) sections 12,12A,
  
  13 and 15 to 17 shall be omitted;
  (j) for section 18,
  
  the following section shall be substituted, namely,-
  "18. Cash reserve-
  (1) Every Co-operative Bank, not being a State
  
  Co-operative Bank for the time being included in the Second Schedule to the
  
  Reserve Bank of India Act, 1934 (2 of 1934) (hereinafter referred to as a
  
  "Scheduled State Co-operative Bank"), shall maintain in
  India by way of such reserve with itself or by
  
  way of balance in a current account with the Reserve Bank or the State
  
  Co-operative Bank of the State concerned or by way of net balance in current
  
  account, or, in the case of a Primary Co-operative Bank, with the Central
  
  Co-operative Bank of the district concerned, or in one or more of the aforesaid
  
  ways, a sum equivalent to at least three per cent of the total of its demand
  
  and time liabilities in India, as on the last Friday of the second preceding
  
  fortnight and shall submit to the Reserve Bank before the fifteenth day of
  
  every month a return showing the amount so held on alternate Fridays during a
  
  month with particulars of its demand and time liabilities in India on such
  
  Fridays or if any such Friday is a public holiday under the Negotiable
  
  Instruments Act, 1881 (26 of 1881), at the close of business on the preceding
  
  working day.
  Explanation: In this section and
  
  in section 24-
  (a) "liabilities in India " shall not
  
  include-
  (i) the paid up
  
  capital or the reserves or any credit balance in the profit and loss account of
  
  the Co-operative Bank;
  (ii) any advance taken
  
  from a State Government, the Reserve. Bank, the Development Bank, the Exim Bank
  
  276[the Reconstruction Bank], 277[the National Housing Bank], the National Bank
  
  278[the Small Industries Bank] or from the National Co-operative Development
  
  Corporation established under section 3 of the National Co-operative
  
  Development Corporation Act, 1962 (26 of 1962) by the Co-operative Bank;
  (iii) in the case of a
  
  State or Central Co-operative Bank, also any deposit of money with it
  
  representing the reserve fund or any part thereof maintained with it by any
  
  other co-operative society within its area of operation, and in the case of a
  
  Central Co-operative Bank, also an advance taken by it from the State
  
  Co-operative Bank of the State concerned;
  (iv) in the case of a
  
  Primary Co-operative Bank, also any advance taken by it from the State
  
  Co-operative Bank of the State concerned or the Central Co-operative Bank of
  
  the district concerned;
  (v) in the case of any
  
  Co-operative Bank, which has granted an advance against any balance maintained with
  
  it, such balance to the extent of the amount outstanding in respect of such
  
  advance; and
  (vi) in the case of
  
  any Co-operative Bank, the amount of any advance or other credit arrangement
  
  drawn and availed of against approved securities;
  (b) "fortnight" shall mean the
  
  period from Saturday to the second following Friday, both days inclusive;
  (c) "net balance in current
  
  accounts" shall, in relation to a Co-operative Bank, mean the excess, if
  
  any, of the aggregate of the credit balances in current account maintained by
  
  that Co-operative Bank with the State Bank of India or a subsidiary bank or a
  
  corresponding new bank, over the aggregate of the credit-balances in current
  
  accounts held by the said banks with such Co-operative Bank;
  (d) for the purpose of computation of
  
  liabilities, the aggregate of the liabilities of a Co-operative Bank to the
  
  State Bank of India, a subsidiary bank, a corresponding new bank, a Regional
  
  Rural Bank, a banking company or any other financial institution notified by the
  
  Central Government in this behalf shall be reduced by the aggregate of the
  
  liabilities of all such banks and institutions to the Co-operative Bank;
  (e) any cash with a Co-operative Bank or any
  
  balance held by a Co-operative Bank with another bank, shall not, to the extent
  
  such cash or such balance represents the balance in, or investment of,
  
  Agricultural Credit Stabilization Fund of such Co-operative Bank, be deemed to
  
  be cash maintained in India.(2) The Reserve Bank may, for the purposes of this
  
  section and section 24, specify from time to time, with reference to any
  
  transaction or class of ,transactions, that such transaction or transactions
  
  shall be regarded as liability in India of a Co-operative Bank, and, ' if any
  
  question arises as to whether any transaction or class of transactions shall be
  
  regarded for the purposes of this section and section 24, as liability in India
  
  of a Co -operative Bank, the decision of the Reserve Bank thereon shall be
  
  final."];
  (k) for section 19, the following section shall
  
  be substituted, namely,
  "19. Restriction on holding shares in
  
  other co-operative societies-No Co-operative Bank shall hold shares in any
  
  other co-operative society except to such extent and subject to such conditions
  
  as the Reserve Bank may specify in that behalf:
  PROVIDED that nothing contained in this section
  
  shall apply to:-
  (i) shares acquired through funds provided by
  
  the State Government for that purpose;
  (ii) in the case of a Central Co-operative
  
  Bank, the holding of shares in the State Co-operative Bank to which it is
  
  affiliated;
  (iii) in the case of a primary Co-operative
  
  Bank, the holding of shares in the Central Co-operative Bank to which it is
  
  affiliated or in the State Co-operative Bank of the State in which it is
  
  registered:
  PROVIDED FURTHER that where any shares
  
  are held by a Co-operative Bank in contravention of this section at the
  
  commencement of the Banking Laws (Application to Co-operative Societies) Act,
  
  1965 (23 of 1965), the Co-operative Bank shall without delay report the matter
  
  to the Reserve Bank and shall, notwithstanding anything contained in this
  
  section, be entitled to hold the shares for such period and on such conditions
  
  as the Reserve Bank may specify".;
  (1) for section 20 of the principal Act, the
  
  following section shall be substituted, namely-
  "20. Restrictions on loans and
  
  advances-No Co-operative Bank shall-
  (a) make any loans or
  
  advances on the security of its own shares; or
  (b) grant unsecured
  
  loans or advances:
  (i) to any of its
  
  Directors; or
  (ii) to firms or
  
  private companies in which any of its Directors is interested as Partner or
  
  Managing Agent or Guarantor or to individuals in cases where any of its
  
  Directors is a guarantor; or
  (iii) to any company
  
  in which the Chairman of the Board of Directors of the Co-operative Bank (where
  
  the appointment of a Chairman is for a fixed term) is interested as its
  
  Managing Agent, or where there is no Managing Agent, as its Chairman or
  
  Managing Director:
  PROVIDED that nothing in clause (b) shall apply
  
  to the grant of unsecured loans or advances-
  (a) made by a Co-operative Bank-
  (i) against bills for
  
  supplies or services made or rendered to government or bills of exchange
  
  arising out of bona fide commercial or trade transactions, or
  (ii) in respect
  
  whereof trust-receipts are furnished to the Co-operative Bank;
  (b) made by a Primary Co-operative Bank to any
  
  of its Directors or to any other person within such limits and on such terms
  
  and conditions as may be approved by the Reserve Bank in this behalf.
  (2) Every Co-operative Bank shall, before the
  
  close of the month succeeding that to which the return relates, submit to the
  
  Reserves Bank a return in the prescribed form and manner showing all unsecured
  
  loans and advances granted by it to companies in cases [other than those in
  
  which the Co-operative Bank is prohibited under sub-section (1) to make
  
  unsecured loans and advances] in which any of its Directors is interested as
  
  Director or Managing Agent or Guarantor.
  (3) If, on examination of any return submitted
  
  under sub-section (2), it appears to the Reserve Bank that any loans or
  
  advances referred to in that sub-section are being granted to the detriment of
  
  the interests of the depositors of the Co-operative Bank, the Reserve Bank may,
  
  by order in writing, prohibit the Co-operative Bank from granting any such
  
  further loans or advances or impose such restrictions on the grant thereof as
  
  it thinks fit, and may by like order direct the Co-operative Bank to secure
  
  repayment of such loans or advances within such time as may be specified in the
  
  order."];
  (m) in section 20A, in sub-section (1).-
  (i) the words and
  
  figures "Notwithstanding anything to the contrary contained in section 293
  
  of the Companies Act, 1956 (1 of 1956)" shall be omitted;
  (ii) in clause (a),
  
  for the words "any of its Directors" the words" any of its past
  
  or present directors" shall be substituted.]
  (n) in section 21, in sub-section (2), in
  
  clause (c) and (d), for the words "any one company, firm, association of
  
  persons or individual", the words "any one party" shall be
  
  substituted;
  (o) in section 22:-
  (i) for sub-sections
  
  (1) and (2), the following sub-sections shall be substituted, namely,-
  "(1) Save as
  
  hereinafter provided, no co-operative society shall carry on banking business
  
  in  India unless:-
  (a) it is
  
  a primary credit society, or
  (b) it is a
  
  Co-operative Bank and holds a license issued in that behalf by the Reserve
  
  Bank, subject to such conditions, if any, as the Reserve Bank may deem fit to
  
  impose:
  PROVIDED that nothing in this
  
  sub-section shall apply to a co-operative society, not being a primary credit
  
  society or a Co-operative Bank carrying on banking business at the commencement
  
  of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of
  
  1965), for a period of one year from such commencement.
  (2) Every co-operative
  
  society carrying on business as Co-operative Bank at the commencement of the
  
  Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965),
  
  shall before the expiry of three months from such commencement, every
  
  Co-operative Bank which comes into existence as a result of the division of any
  
  other co-operative society carrying on business as a Co-operative Bank, or the
  
  amalgamation of two or more co-operative societies carrying on banking business
  
  shall, before the expiry of three months from its so coming into existence,
  
  every primary credit society which becomes a Primary Co-operative Bank after
  
  such commencement shall before the expiry of three months from the date on
  
  which it so becomes a Primary Co-operative Bank and every co-operative society
  
  other than a primary credit society shall before commencing banking business in
  
  India, apply in writing to the Reserve Bank for a license under this section:
  PROVIDED that nothing in
  
  clause (b) of sub-section (1) shall be deemed to prohibit,-
  (i) a co-operative
  
  society carrying on business as a Co-operative Bank at the commencement of the
  
  Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965); or
  
  
  (ii) a Co-operative
  
  Bank which has come into existence as a result of the division of any other
  
  co-operative societies carrying on business as a Co-operative Bank, or the
  
  amalgamation of two or more co-operative societies carrying on banking business
  
  at the commencement of the Banking Laws (Application to Co-operative Societies)
  
  Act, 1965 (23 of 1965), or at any time thereafter; or
  (iii) a primary credit 
  
  society which becomes a Primary Co-operative Bank after such commencement, from 
  
  carrying on banking business until it is granted a license in pursuance of this 
  
  section or is, by a notice in writing notified by the Reserve Bank that the 
  
  license cannot be granted to it.]
  253[(ii) sub-section
  
  (3A) shall be omitted;
  (iii) in sub-section
  
  (4),in clause (iii), the words, brackets, figures and letters "and sub-
  
  section (3A)" shall be omitted;]
  (p) 273[in section 23-
  (i) for sub-section
  
  (1), the following sub-section shall be substituted, namely-
  "(1) Without
  
  obtaining the prior permission of the Reserve Bank, no Co-operative Bank shall
  
  open a new place of business or change otherwise than within the same city,
  
  town or village, the location of an existing place of business:
  PROVIDED that nothing in this
  
  sub-section shall apply to-
  (a) the opening for a
  
  period not exceeding one month of a temporary place of business within a city,
  
  town or village or the environs thereof within which the Co-operative Bank
  
  already has a place of business, for the purpose of affording banking
  
  facilities to the public on the occasion of an exhibition, a conference or a
  
  mela or any other like occasion;
  (b) the 280[opening or
  
  changing the location of branches] by a Central Co-operative Bank within the
  
  area of its operation.";
  253[(ii) after
  
  sub-section (4), the following sub-section shall be inserted, namely,-
  "(4A) Any
  
  Co-operative Bank other than a Primary Co-operative Bank requiring the
  
  permission of the Reserve Bank under this section shall forward its application
  
  to the Reserve Bank though the National Bank which shall give its comments on
  
  the merits of the application and send it to the Reserve Bank:
  PROVIDED that the Co-operative
  
  Bank shall also send an advance copy of the application directly to the Reserve
  
  Bank."];
  275[(q) in section 24:-
  (i) in sub-section
  
  (1), the words "After the expiry of two years from the commencement of
  
  this Act", shall be omitted;
  (ii) for sub-sections
  
  (2) and (2A), the following sub-section shall be substituted, namely: -
  "(2) In computing
  
  the amount for the purposes of sub-section (1),-
  (a) any balances
  
  maintained in India by a Co-operative Bank in current account with the Reserve
  
  Bank or by way of net balance in current accounts, and in the case of a
  
  Scheduled State Co-opera6ve Bank, also the balance required under section 42 of
  
  the Reserve Bank of India Act, 1934 (2 of 1934), to be so maintained;
  (b) any balances
  
  maintained by a Central Co-operative Bank with the State Co-operative Bank of
  
  the State concerned, and
  (c) any balances
  
  maintained by a Primary Co-operative Bank with Central Co-operative Bank of the
  
  district concerned or with the State Co-operative Bank of the State concerned,
  
  shall be deemed to be cash maintained in India.
  (2A) (a)
  
  Notwithstanding anything contained in sub-section (1) or in sub-section (2),
  
  after the expiry of two years from the commencement of the Banking Laws
  
  (Application to Co-operative Societies) Act, 1965 (23 of 1965), or of such
  
  further period not exceeding one year as the Reserve Bank having regard to the
  
  interests of the Co-operative Bank concerned, may think fit in any particular
  
  case to allow-
  (i) a Scheduled State Co-operative Bank, in
  
  addition to the cash reserve which it is required to maintain under section 18,
  
  shall maintain in India, in cash, or in gold valued at a price not exceeding
  
  the current market price or in unencumbered approved securities valued at a
  
  price determined in accordance with such one or more of, or combination of, the
  
  following methods of valuation, namely, valuation with reference to cost price,
  
  market price, book value or face value as may be specified by the Reserve Bank
  
  from time to time, an amount which shall not, at the close of business on any
  
  day, be less than twenty-five per cent or such other percentage not exceeding
  
  forty per cent as the Reserve Bank may, from time to time, by notification in
  
  the Official Gazette, specify, of the total of its demand and time liabilities
  
  in India, as on the last Friday of the second preceding fortnight.
  (b) In computing the amount for the purpose of
  
  clause (a), the following shall be deemed to be cash maintained in India namely,-
  (i) any balance
  
  maintained by a Scheduled State Co-operative Bank with the Reserve Bank in
  
  excess of the balance required to be maintained by it under section 42 of the
  
  Reserve Bank of India Act, 1934 (2 of 1934);
  (ii) any cash or
  
  balances maintained in India by a Co-operative Bank, other than a Scheduled
  
  State Co-operative Bank, with itself or with the State Co-operative Bank of the
  
  State concerned, or in current account with the Reserve Bank or by way of net
  
  balance in current accounts and, in the case of a Primary Co-operative Bank
  
  also any balances maintained with the Central Co-operative Bank of the district
  
  concerned, in excess of the aggregate of the cash or balances required to be
  
  maintained under section 18;
  (iii) any net balance
  
  in current accounts.
  Explanation: For the purposes of this sub-section-
  (a) approved securities, or a portion thereof,
  
  representing investment of monies of Agricultural Credit Stabilization Fund to
  
  a Co-operative Bank shall not be deemed to be unencumbered approved securities;
  
  
  (b) in case a Co-operative Bank has taken an
  
  advance against any balance maintained with the State Co-operative Bank of the State
  
  concerned or with the Central Co-operative Bank of the district concerned, such
  
  balance to the extent to which it has been drawn against or availed of shall
  
  not be deemed to be cash maintained in India;
  (c) for the purpose of clause (a), the market
  
  price of an approved security shall be the price as on the date of the issue of
  
  the notification or as on any earlier or later date, as may be notified from
  
  time to time by the Reserve Bank in respect of any class or classes of
  
  securities;
  (iii) in sub-section (3), for the proviso, the
  
  following proviso shall be substituted, namely-
  "PROVIDED that every Co-operative
  
  Bank, other than a Primary Co-operative Bank, shall also furnish within the
  
  said period, a copy of the said return to the National Bank.";
  (iv) in sub-section (6), in clause (a), for
  
  the words "fourteen days", the words "thirty days" shall be
  
  substituted.];
  (qq) after section 24, the following section
  
  shall be inserted, namely,-
  "24. Power to exempt-Without prejudice to
  
  the provisions of Section 53, the Reserve Bank may, by notification in the
  
  Official Gazette declare that, for such period and subject to such conditions
  
  as may be specified in such notification the whole or any part of the
  
  provisions of section 18 or section 24, as may be specified therein, shall not
  
  apply to any Co-operative Bank or class of Co-operative Banks, with reference
  
  to all or any of the offices of such Co-operative Bank or banks, or with
  
  reference to the whole or any part of the assets and liabilities of such
  
  Co-operative Bank or banks."];
  (r) Section 25 shall be omitted;
  (ri) in the second proviso to section 26, for
  
  the expression "Regional Rural Bank", the expression
  
  "Co-operative Bank, other than a primary Co-operative Bank shall be
  
  substituted;
  (rii) in section 27, for sub-section (3), the
  
  following sub-section shall be substituted, namely,-
  "(3) Every Co-operative Bank, other than
  
  a Primary Co-operative Bank shall submit a copy of the return which it submits
  
  to the Reserve Bank, under sub-section (1) also to the National Bank and the
  
  powers exercisable by the Reserve Bank under sub-section (2) may also be
  
  exercised by the National Bank in relation to Co-operative Banks, other than
  
  Primary Co-operative Bank."];
  (s) for sections 29 and 30, the following
  
  section shall be substituted, namely,
  "29. Accounts and balance-sheet-(1) At
  
  the expiration of each year ending with the 30th day of June or at the
  
  expiration of a period of twelve months ending with such date as the Central
  
  Government may, by notification in the Official Gazette, specify in this
  
  behalf, every Co-operative Bank, in respect of all business transacted by it,
  
  shall prepare with reference to that. year 283[for the period] a balance-sheet
  
  and profit and loss account as on the last working day of the year 283[or the
  
  period] in the Forms set out in the Third Schedule or as near thereto as
  
  circumstances admit:
  PROVIDED that with a view to facilitating the
  
  transition from one period of accounting to another period of accounting under
  
  this sub-section, the Central Government may, by order published in the
  
  Official Gazette, make such provisions as it considers necessary or expedient
  
  for the preparation of, or for other matters relating to the balance-sheet or
  
  profit and loss account in respect of the concerned year or period, as the case
  
  may be.
  (2) The balance-sheet and profit and loss
  
  account shall be signed by the manager or the principal officer of the bank and
  
  where there are more than three Directors of the bank, by at least three of
  
  those Directors, or where there are not more than three Directors, by all the
  
  Directors.
  (3) The Central Government, after giving not
  
  less than three months 'notice of its intention so to do by a notification in
  
  the Official Gazette, may from time to time by a like notification amend the
  
  Forms set out in the Third Schedule.";
  (t) in section 31,-
  (i) for words
  
  "within three months" and "of three months", the words
  
  "within six months" and "of six months" shall,
  
  respectively, be substituted;
  (ii) for the second
  
  proviso, the following proviso shall be substituted namely:
  "PROVIDED FURTHER that a
  
  Co-operative Bank, other than a Primary Co-operative Bank shall furnish such
  
  returns also to the National Bank."];
  (u) Sections 32 to 34 shall be omitted;
  (v) in section 34A, sub-section (3) shall be
  
  omitted;
  (w) in section 35,-
  (i) in sub-section
  
  (1),
  (a) for the words and
  
  figures, "section 235 of the Companies Act, 1956 (1 of 1956)", the
  
  words "any law relating to co-operative societies for the time being in
  
  force" shall be substituted;
  (b) the following
  
  proviso shall be inserted at the end, namely,-
  "PROVIDED that the Reserve Bank
  
  may, if it considers it necessary or expendient so to do, cause an inspection
  
  to be made of a Primary Co-operative Bank under this sub-section by one or more
  
  officers of a State Co-operative Bank in the State in which such primary
  
  co-operative Bank is registered."];
  (ii) in sub-section (4), clause (b) shall be
  
  omitted;
  (iii) after sub-section (4), the following
  
  sub-section shall be inserted, namely-
  "(4A) Without prejudice to the provisions
  
  of sub-section (4), the Reserve Bank may, if it considers it necessary or
  
  expedient so to do supply a copy of the report on any inspection or scrutiny to
  
  the State Co-operative Bank and the Registrar of Co-operative Societies of the
  
  State in which the bank which has been inspected or whose affairs have been
  
  scrutinized is registered."];
  (IV) in sub-section (6), for the expression
  
  "Regional Rural Banks" and "Regional Rural Bank", wherever
  
  they occur, the expressions "Co-operative Banks other than primary
  
  Co-operative Banks”. and "Co-operative Bank other than a primary
  
  Co-operative Bank" shall, respectively be substituted];
  (V)] the Explanation shall be omitted;
  (x) in section 35A, in sub-section (1), in
  
  clause (c), for the words "any banking company", the words "the
  
  banking business of any Co-operative Bank" shall be substituted;
  (y) section 35B shall be omitted;
  (z) in section 36 in sub-section (1):-
  (a) clause (b) shall
  
  be omitted;
  (b) for clause (d),
  
  the following clause shall be substituted, namely,-
  "(d) at any time
  
  if it is satisfied that for the reorganization or expansion of co-`perative
  
  credit on sound lines it is necessary so to do, by an order in writing and on
  
  such terms and conditions as may be specified therein-
  (i) depute one or more
  
  of its officers to watch the proceedings at any meeting of the Board of
  
  Directors of the Co-operative Bank or of any other body constituted by it and
  
  require the Co-operative Bank to give an opportunity to the officer so deputed
  
  to be heard at such meeting and to offer such advice on such matters as the
  
  officer may consider necessary or proper for the reorganization and expansion
  
  of co-operative credit on sound lines, and also require such officer to send a
  
  report of such proceedings to the Reserve Bank;
  (ii) appoint one or
  
  more of its officers to observe the manner in which the affairs of the
  
  Co-operative Bank or its offices or branches are being conducted and make a
  
  report thereon;"];
  (za) in section 36A-
  (i) for sub-section
  
  (1), the following sub-section shall be substituted, namely,-
  "(1) The
  
  provisions of section 11, section 18 and section 24 shall not apply to a
  
  Co-operative Bank which has been refused a license under section 22 or whose
  
  license has been cancelled under that section or which is or has been
  
  prohibited or precluded from accepting deposits by virtue of any order made
  
  under this Act or of any alteration made in its bye-laws.";
  (ii) after sub-section
  
  (2), the following sub-section shall be inserted, namely,-
  "(3) Subject to
  
  the provisions of sub-sections (1) and (2), a co-operative society carrying on
  
  business as a Primary Co-operative Bank at the commencement of the Banking Laws
  
  (Application to Co-operative Societies) Act, 1965 (23 of 1965), or a
  
  co-operative society which becomes a Primary Co-operative Bank after such
  
  commencement shall, notwithstanding that it does not at any time thereafter
  
  satisfy the requirements of the definition of Primary Co-operative Bank in
  
  clause (ccv) of section 5], continue to be a Primary Co-operative Bank within
  
  the meaning of this Act, and may, with the approval of the Reserve Bank and
  
  subject to such terms and conditions as the Reserve Bank may specify in that
  
  behalf continue to carry on the business of banking.";
  (zaa) in section 36AD, sub-section (3) shall
  
  be omitted;]
  (zb) Part IIA 258[Part II, Part III, except
  
  sub-sections (1), (2) and (3) of section 45, and Part IIIA except section 45W
  
  shall be omitted;
  (zc) in section 46-
  (i) in sub-section
  
  (4), the word "or" occurring at the end of clause (i) and clause (ii)
  
  shall be omitted;
  (ii) in clause (a) of
  
  the Explanation, after the words "includes a", the words "co-operative
  
  society" shall be inserted;]
  (zd) in section 47, the words, brackets,
  
  figures and letters "sub-section (5) of section 36AA or" shall be
  
  omitted;
  (ze) section 49 shall be omitted;
  (zf) in section 49A, for the proviso, the
  
  following proviso shall be substituted, namely,-
  "PROVIDED that nothing contained
  
  in this section shall apply to,-
  (a) a primary credit society;
  (b) any other co-operative society accepting
  
  such deposits at the commencement of the Banking Laws (Application to Co-operative
  
  Societies) Act, 1965 (23 of 1965), for a period of one year from the date of
  
  such commencement; and
  (c) any savings bank scheme run by the
  
  government." ;
  (zg) sections 49B and 49C shall be omitted;
  (zh) in section 50, the figures and letters
  
  "10, 12A, 16", "35B", and "43A" shall be omitted;
  
  
  (zi) section 51 shall be omitted;
  (zj) in section 52-
  (i) in sub-section(2),
  
  the words, figures and letter, "and the form in which the official
  
  liquidator may file lists of debtors to the court having jurisdiction under
  
  Part III or Part IIIA and the particulars which such lists may contain"
  
  shall be omitted;
  (ii) sub-section (4)
  
  shall be omitted; 289[(zji) in section 54, after the expression "Reserve
  
  Bank", where it occurs, the expression "or the National Bank"
  
  shall be inserted.;]
  (zk) for section 55 and the First Schedule,
  
  the following section shall be substituted, namely:-
  "55. Act 18 of 1891 and Act 46 of 1949 to
  
  apply in relation to Co-operative Banks—
  (1) The Bankers"
  
  Books Evidence Act, 1891 shall apply in relation to a Co-operative Bank as it
  
  applies in relation to a bank as defined in section 2 of that Act.
  (2) The Banking
  
  Companies (Legal Practitioner's Client's Accounts) Act, 1949 shall apply in
  
  relation to a Co-operative Bank as it applies in relation to a banking company
  
  as defined in section 2 of that Act.";
  (zl) For Schedule III and Schedule IV, the
  
  following Schedule shall be substituted, namely: