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SUBSIDIARY BANKS GENERAL REGULATIONS, 1959
In exercise of the powers conferred by section 63of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), the State Bank of India, with the approval of the Reserve Bank of India, has made the following regulations, namely:
CHAPTER 01: Introductory
REGULATION 01 Short title and commencements
(1) These regulations may be called the Subsidiary Banks General Regulations. 1959.
(2) They shall come into force on the appointed day.
REGULATION 02 Definitions
In these regulations unless there is anything repugnant in the subject or context.
(a) "the Act" means the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);
(b) "approved security" means any one or more of the following securities:-
(i) stocks, funds and securities (other than immovable property) in which a trustee may invest trust money under any law for the time being in force in India;
(ii) debentures or other securities for money issued by or on behalf of a district board, municipal committee or other local authority, under any law for the time being in force in India;
(iii) subject to such general or special directions as may be issued by the board-
(a) debentures and fully paid shares of corporations (other than companies registered under any law relating no companies) established by or under any law for the time being in force in India; and
(b) debentures of companies with limited liability registered under any law relating to companies either in India or in such other country as the Central Government may approve in this behalf;
(iv) receipts, certificates or any other form of instruments issued by the subsidiary bank in evidence of or representing amounts deposited with it;
(v) goods (other than shares or securities) which are deposited with, or, if authorised by special directions of the State Bank hypothecated to the subsidiary bank as security for advances loans or credit: and
(vi) documents of title to goods assigned to the subsidiary bank as security for advances, loans or credits.
(c) "the Board" in relation to a subsidiary bank means the board of directors of that subsidiary bank;
(d) "chairman" means the chairman of the State Bank;
(e) "company" means any company as defined in section 3 of the Companies Act, 1956-and includes a foreign company within the meaning of section 591-
(f) other expressions used but not defined in these regulations and used in the Act have the meanings respectively assigned to them in the Act;
CHAPTER 02 SHARES AND SHARE REGISTERS
REGULATION 03 SHARES MOVABLE PROPERTY
The shares of a subsidiary bank shall be movable property.
REGULATION 04 CONTROL OVER SHARES AND REGISTERS
(1) Subject to the provisions of the Act and these regulations, the register of shareholders of a subsidiary bank shall be maintained by, and be under the control of, the Board and the decision of the Board as to whether or not a person is entitled to be registered as a holder in respect of any share shall be final.
(2) In particular, and without prejudice to the foregoing provision, the Board shall, as regards the entries in the register of shareholders of that bank, have the power to examine and pass or refuse to pass transfers and transmissions and to approve or refuse to approve transferees of shares and to give certificates of shares.
REGULATION 05: PARTIES WHO MAY NOT BE REGISTERED AS SHAREHOLDERS
(1) Except as otherwise provided by these regulations, no minor or person who has been found by a Court of competent jurisdiction to be of unsound mind shall be entitled to be registered as a shareholder.
(2) In the case of firms, shares shall be registered in the names of the individual partners, and no firm, as such, shall be entitled to be registered as a shareholder.
REGULATION 06 PARTICULARS TO BE ENTERED IN THE SHARE REGISTER
(1) In addition to the particulars specified in section 21-of the Act, the following particulars shall be entered in the register of shareholders:
(i) the manner in which each shareholder acquired his share or shares and except in the case of a allotment of shares to the State Bank in respect of a new bank under sub-section (2) of section 7-of the Act, in respect of the Hyderabad Bank under sub-section (2) of section 10 of the State Bank of Hyderabad Act, 1956, and in respect of the Saurashtra Bank under sub-section (2) of section 6 of the Saurashtra State Banks (Amalgamation) Ordinance, 1950, the name of the previous holder;
(ii) whether the shareholder belongs to one of the categories of share- holders referred to in the proviso to section 19-of the Act and if so, the category to which he belongs;
(iii) when any person ceases to be a shareholder, the name of the person in whose favour the share or shares are transferred; and
(iv) such further particulars as the Board may specify.
(2) In the case of joint holders of any shares, their names and other particulars required by sub regulation
(1) shall be grouped under the name of the first of such joint holders.
(3) A shareholder resident outside India shall furnish to the subsidiary bank an address in India and such address shall be entered in the register and be deemed to be his registered address for the purposes of the Act and these regulations.
REGULATION 07 EXERCISE OF RIGHTS OF JOINT HOLDERS
If any share stands in the name of two or more persons first named in the register shall, as regards voting, receipt of dividends, service of notices and all or any other matter connected with the subsidiary bank, except the transfer of the shares, be deemed the sole holder thereof.
REGULATION 08 INSPECTION OF REGISTER
(1) The register of shareholders of a subsidiary bank shall, except when closed under the provisions of these regulations, be open to the inspection of any shareholder, free of charge, the place where it is maintained during business hours, subject to such reasonable restrictions as the subsidiary bank may impose, but so that not less than two hours in each working day shall be allowed for inspection.
(2) A shareholder shall not have the right himself to make a copy of any entry in the register, but may, except when the register is closed, require a copy of the register or of any part thereof on prepayment therefor at the rate of fifty paise for every hundred words or fractional part thereof required to be copied,
REGULATION 09 CLOSING OF SHARE REGISTER
(1) The Board may close the register of shareholders for any period or periods not exceeding in the each year but not exceeding one month at any one time.
(2) A notice of the closing of the register shall be published in the Gazette of India and also in at least two principal daily newspapers circulating at the place where the head office of the subsidiary bank is situate.
REGULATION 10 SHARE CERTIFICATES
(1) Every share certificate shall be issued under the common seal of the subsidiary bank and shall specify the number and denoting numbers of the shares in respect of which it is issued.
(2) A share certificate under the common seal of a subsidiary bank specifying the share/shares held by any shareholder of that bank shall be prima facie evidence of the title of the shareholder to such share.
REGULATION 11 ISSUE OF SHARE CERTIFICATES FREE OF CHARGE
1[
(1) A shareholder of a subsidiary bank shall be entitled to one certificate for each five shares of that bank registered in his name on any one occasion, and one additional share certificate for the number of shares in excess of a multiples of but less than five shares.
(2) If the number of shares to be registered is less than five, one certificate shall be issued for all the shares.
(3) If any shareholder requires more certificates than the number to which he is entitled under this regulation, the subsidiary bank may have such additional certificates issued at its absolute discretion.
(4) In the case of shares held jointly by several persons, delivery of the relative certificate or certificates lo one of such joint holders shall be sufficient delivery to all, and a receipt signed by any one of the joint holders shall effectually bind all the joint holders.]
REGULATION 12 RENEWAL OF SHARE CERTIFICATES
(1) If any share certificate is worn out or defaced or tendered for sub-division, then, upon production thereof to the Board, the Board may order the same to be cancelled, and have a new certificate or certificates issued in lieu thereof.
(2) If any share certificate is alleged to be lost or destroyed, then, upon production of such evidence of the loss or destruction thereof as the Board may consider satisfactory, and of such indemnity, with or without security as the Board may require, and on payment to the subsidiary bank of its costs, charges and expenses of and incidental to the matter, a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed certificate.
2[(3) Deleted w.e.f. 1-8-1969. * * * * * ]
REGULATION 13 Transfer of shares
(1) Every transfer of the shares of a subsidiary bank shall be in writing in the following form or in any usual or common form which the subsidiary bank shall approve: I/We.. of .. in consideration of the sum of rupees .. .... paid to me/us by.. of.. ..., (hereinafter called "the transferee(s)") do hereby transfer to the transferees) .. ... share/shares of the.. numbered.. to hold unto the transferee(s), his/their executors, administrators and assigns, subject to the several conditions contain- ed in the State Bank of India (Subsidiary Banks) Act, 1959 and the rules and regulations made there under, and I/we, the transferee(s) do hereby agree to take the said share/shares subject to the conditions aforeasaid and I/we, the traneferee(s) request that I/we be registered as shareholder in respect of
the said share/shares. I/We, the transferee(s), do hereby declare that- I/We shall not, on
registration of this transfer, come to be registered as holder of shares of the.. in excess of the maximum number of shares permitted by section 19-of the State Bank of India (Subsidiary Banks) Act, 1959. Transferor Name.. Address.. Witness Name.. - Address.. Occupation.. Transferee Name.. Address .. Witness Name.. Address.. Occupation.. (2) The instrument of transfer of any share shall be submitted to the Board and shall be signed by or on behalf of the transferor and the transferee, and the transferor shall be deemed to remain the holder of such shares until the name of the transferee is entered in the share register. Each signature to such transfer shall be duly attested by the signature of one witness who shall add his address and occupation.
(3) Upon receipt by the Board of an instrument of transfer with the request to register the transfer, the Board shall, unless it declines the registration under regulation 14-, within two months from the date on which the instrument of transfer was delivered to the subsidiary bank for submission to the Board, cause the transfer to be registered.
REGULATION 14 Power to refuse or suspend transfers
(1) The Board may decline to register any transfer of shares unless:-
3[(a) * * * * * ]
(b) a proper instrument of transfer duly stamped and exceed by or on be- half of the transferor and the transferee has been submitted to the Board.
(c) the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the subsidiary bank may reasonably require in evidence of the right of the transferor to make the transfer.
(d) it is satisfied after such enquiry as it may consider necessary that the transfer is qualified to be registered as a shareholder in respect of the shares covered by the instrument of transfer.
(2) This Board may suspend the registration of transfer during any period in which the register is closed.
REGULATION 15 Transmission of shares in the event of death insolvency etc. of a share share-- holder
(1) The executors or administrators of the estates of a deceased sole holder of a share of a subsidiary bank, or the holder of a succession certificate issued under Part X of the Indian
Succession Act, 1925 in respect of such share, or a person in whose in favour a valid instrument of transfer of such share was executed by such person or by the deceased sole holder during the latter's life- time, shall be the only person who may be recognised by the subsidiary bank as having any title to the share of the deceased shareholder. In the case of a share of a subsidiary bank registered in the names of two or more holders, the survivors and on the death of the last survivor, the executors or administrators of his estate, or any person who is the holder of a succession certificate in respect of such survivors' interest in the share, or a person in whose favour a valid instrument of transfer of the share was executed by such person or such last survivor during the latter's life-time, shall be the only person who may be recognised by the subsidiary bank as having any title to such share. The subsidiary bank shall not be bound to recognise such executors or administrators unless they shall have obtained probate or letters or administration or other legal representation as the case may be from a duly constituted Court in India having effect at the place where the head office of the subsidiary bank is situate : Provided nevertheless that in any case where the Board shall in its absolute discretion thinks fit, it shall be lawful for the Board to dispense with the production of a succession certificate, letters of administration or such other legal representation upon such terms as to indemnity or otherwise as it may think fit.
(2) Subject to the provisions of the Act and these regulations, any such person becoming entitled to a share of a subsidiary bank in consequence of the death of a shareholder and any person becoming entitled to a share in consequence of the insolvency, bankruptcy or liquidation of a shareholder shall, upon production of such evidence as the Board may require, be entitled :-
(a) to be registered as a shareholder in respect of the share upon his satisfying the Board in the same manner as if he were the proposed transferee under regulation 14-that he is qualified to be registered as a shareholder; or
(b) to make such transfer of the share as the person from whom he derives his title, could have made.
REGULATION 16 SHAREHOLDER CEASING TO BE QUALIFIED FOR REGISTRATION
(1) It shall be the duty of any person registered as a shareholder of a subsidiary bank, whether alone or jointly with another or others, forthwith upon ceasing to be qualified to be so registered in respect of any share to give intimation thereof to the Board.
(2) The Board may at any time cause such enquiries to be made as it shall deem fit for the purpose of ascertaining whether any person registered as a share- holder of the subsidiary bank whether alone or jointly with another or others, is not or has ceased to be, qualified to be so registered in respect of any share and upon being satisfied that any such person is, contrary to the provision of sub- section (1) of section 19-of the Act. registered, by inadvertence or otherwise, in respect of any shares held by him whether in his own name or jointly with another person or persons so as to make such total holdings in excess of the total nominal value of twenty thousand rupees, it shall determine which of such shares shall be deemed to constitute such excess and shall inform the shareholder or, where such excess is held jointly, each of the joint shareholders, that in accordance with section 19-of the Act he is. and in the case of joint holders they are, not entitled to the payment of any dividend on any such share not to exercise any of the rights of a shareholder otherwise than for the purpose of the transfer of such share and shall make an entry in the register to that effect.
(3) A determination by the Board under sub-regulation (2) shall be conclusive.
CHAPTER 03: MEETINGS OF SHAREHOLDERS
REGULATION 17: NOTICE CONVENING A GENERAL MEETING
Subject to the provisions of sub-section (3) of section 44-of the Act.
(1) A notice convening a general meeting of the shareholders of a subsidiary bank signed by the Chairman on the 1[managing director] of that bank shall be published at least twenty-eight days before the date of the meeting in the Gazette of India and also in at least two principal daily newspapers circulating at the place where the head office of the subsidiary bank is situate.
(2) Every such notice shall state the time, date and location of such meeting, and also the business that shall be transacted at the meeting.
REGULATION 18: SPECIAL GENERAL MEETING
(1) The Board may, at any time shall, if a requisition for such a meeting has been received from either the State Bank or other shareholders holding shares carrying in the aggregate, not less than 20 percent of the total voting rights of all the shareholders, convene or cause to be convened, a special general meeting of shareholders.
(2) The requisition referred to sub-regulation (1) shall state the purpose for which the special meeting is required to be convened, and may consist of several documents in like from each signed by one or more of the requisitionists.
(3) The time, date and location of a general meeting shall be decided by the Board: Provided that a special general meeting convened on requisition shall be convened not later than three months of the receipt of the requisition.
REGULATION 19: BUSINESS AT GENERAL MEETINGS
(1) No business other than that specified in sub-section (2) of section 44-of the Act shall be transacted or discussed at the annual general meeting, except with the consent of the chairman or other person presiding at the meeting, unless not les than six week's notice of the same has been given to the chairman or the4[managing director] of the subsidiary bank either by the State Bank or by at least ten other share holders qualified to vote at the meeting. Such notice shall take the form of a definite resolution to be put to the meeting, and shall be included in the notice of the meeting.
(2) Except with the consent of the chairman or other person presiding at the meeting, no business shall be transacted or discussed at any special general meeting, except the business for which the meeting has been specifically convened.
REGULATION 20 QUORUM AT GENERAL MEETINGS
No business shall be transacted at any meeting of the shareholders whether it is the annual general meeting or any special general meeting, unless a quorum of at least five shareholders consisting of the State Bank represented by a proxy or by a duly authorised representative and four other shareholders entitled to vote at such meeting in person or by proxy or by duly authorised representatives is present at the commencement of such business, and if within fifteen minutes from the time appointed for the meeting a quorum is not present, the chairman or other person presiding at the general meeting may dissolve the meeting or adjourn it to the same day in the following week at the same time and location, and if at such adjourned meeting a quorum is not present, the shareholders who are present in person or by proxy or by duly authorised representatives shall form a quorum : 'Provided that no annual general meeting shall be adjourned to a date later than three months after the 31st December and if adjournment of the meeting to the same day in the following week would have this effect, the annual general meet- in E; shall not be adjourned but the business of the meeting shall be commenced either as soon within one hour from the time appointed for the meeting as a quorum may be present, or immediately after the expiry of one hour from that time and those shareholders who are present in person or by proxy or by duly authorised representatives at such time shall form a quorum.
REGULATION 21 CHAIRMAN AT GENERAL MEETINGS
(1) The Chairman or in his absence such one of the directors as may generally or in relation to any particular meeting be authorised by the chairman in this behalf shall preside at a general meeting, and in the absence of the chairman and the person so authorised and also failing any such authorisation the shareholders who are present in person or by proxy or by duly authorised representatives at the meeting may elect any other director to preside at the meeting.
(2) The person presiding at a general meeting shall regulate the procedure at the general meeting, and, in particular, shall have power to decide the order in which shareholders may address the meeting, to fix a time limit for speeches, to apply the closure when, in his opinion, any matter has been sufficiently disused and to adjourn the meeting.
REGULATION 22 PERSONS ENTITLED TO ATTEND GENERAL MEETINGS
(1) All directors,5[......] the auditor for the time being and all shareholders of the subsidiary bank shall, subject to the provisions of sub-regulation (2), be entitled to attend a general meeting of that bank.
(2) A shareholder (other than the State Bank or a director of the subsidiary bank) attending a general meeting shall, for the purpose of identification and to determine his voting rights, be required to sign and deliver to the subsidiary bank a form to be specified by the 2[managing director] containing the following particulars:
(a) his full name and registered address ;
(b) the denoting numbers of his shares ;
(c) whether he is entitled to vote and the number of votes to which he is entitled in person or as proxy or as a duly authorised representative.
REGULATION 23 VOTING AT GENERAL MEETINGS
(1) Save as otherwise provided in section 31-of the Act, every matter submitted to a general meeting of a subsidiary bank shall be decided by a majority of votes.
(2) A declaration by the person presiding at a general meeting of a subsidiary bank that a resolution has been carried or rejected threat upon a show of hands by those shareholders present who are entitled to vote on the resolution shall be conclusive, and an entry to that effect in the book of proceedings of the subsidiary bank shall be sufficient evidence of that fact, without proof of the number or proportion of the votes recorded in favour of, or against, such resolution, unless, immediately on such declaration, a poll be demanded in writing on behalf of the State Bank or by at least four other shareholders present and entitled to vote at the meeting.
(3) If a poll be duly demanded, it shall be taken either at once or at such time and location and either by voting or by ballot as the person presiding at the meeting may direct, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. At such poll, voting shall be either in person or by proxy or by duly authorised representative, and the share- holders shall be entitled to exercise the voting rights, referred to in regulation 25.-
(4) The decision of the person presiding at the meeting as to the qualification of any person to vote, and also in the case of a poll, as to the number of votes any person is competent to exercise shall be final.
REGULATION 24 MINUTES OF GENERAL MEETINGS
(3) Until the contrary is proved, every general meeting in respect of the proceedings whereof minutes have been so made shall be deemed to have been duly called and held, and all proceedings held thereat have been duly held.
CHAPTER 4 Voting Rights of Shareholders
REGULATION 25 DETERMINATION OF VOTING RIGHTS,
(1) Subject to the provisions contained in section 19-of the Act, each shareholder of a subsidiary bank who has been registered as a shareholder for a period of not less than three months prior to the date of a general meeting of that subsidiary bank shall be entitled to vote on every resolution placed before the meeting.
(2) Every shareholder entitled to vote as aforesaid who, not being a company, is present in person or by proxy or who being a company is present by a duly authorised representative, or by proxy shall have one vote on a show of hands and in case of a poll shall have one vote for each share held by him.
REGULATION 26: VOTING BY DULY AUTHORISED REPRESENTATIVE
(1) A shareholder of a subsidiary bank, being a company, may by a resolution or a power of attorney authorise any of its officials or any other person to act as its representative at any general meeting of the shareholders of the subsidiary bank and the person so authorised (referred to as a "duly authorised representative" in these regulations) shall be entitled to exercise the same powers on behalf of the company which he represents, as if he were an individual shareholder of the subsidiary bank. The authorisation so given may be in favour of two persons in the alternative and in such a case any one of such persons but not both may act as the duly authorised representative of the company.
(2) A person acting in pursuance of an authorisation given under this regulation shall not be deemed to be a proxy.
(3) No person may attend or vote at any meeting of the shareholders of a subsidiary bank as a duly authorised representative of a company unless, not less than four clear days before the date fixed for the meeting.
(a) a copy of the resolution, appointing him as a duly authorised representative certified to be a true copy by the person presiding at the meeting at which it was passed, shall have been deposited, or
(b) the power of attorney has been registered, at the head office of the subsidiary bank.
(4) An appointment of a duly authorised representative shall, after the deposit of a certified copy of the resolution as aforeasaid, be irrevocable for the meeting for which it is made and shall revoke any proxy previously deposited for such meeting by the company.
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