Deposit Insurance and Credit Guarantee Corporation Act, 1961- Sections 22 till End

Chapter IV

FUNDS, ACCOUNTS AND AUDIT

22. Funds of Corporation.

[i][22. Funds of Corporation.—The Corporation shall maintain three funds, to be called, respectively, the Deposit Insurance Fund, the Credit Guarantee Fund and the General Fund.]

Index of Deposit Insurance and Credit Guarantee Corporation Act, 1961
Sections 1 to 9
Sections 10 to 21-B
Sections 22 till End

23. Deposit Insurance Fund.

23. Deposit Insurance Fund.—(1) To the Deposit Insurance Fund shall be credited,—

(a) all amounts received by the Corporation as premium;

(b) all amounts received by the Corporation under Section 21;

(c) the amount advanced by the Reserve Bank under Section 26;

(d) all amounts transferred to that Fund from the General Fund [ii][or the Credit Guarantee Fund] under Section 27; and

(e) all income arising from the investments made out of that Fund.

(2) The said Fund shall be applied—

(a) to make payments in respect of insured deposits;

(b) to meet liability in respect of an advance taken under Section 26; [iii][* * *]

(c) to meet liability in respect of the amounts referred to in clause (d) of sub-section (1); [iv][and]

[v][(d) to meet the whole or any part of the liability on account of the depreciation in assets, contributions to staff superannuation and other funds or other expenses incurred or to be incurred by the Corporation as may be decided by the Board.]

23-A. Credit Guarantee Fund.

[vi][23-A. Credit Guarantee Fund.—(1) To the Credit Guarantee Fund shall be credited,—

(a) all amounts in the Reserve for unexpired Guarantee Risks maintained by the Credit Guarantee Corporation of India Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956), and having its registered office at Bombay;

(b) all amounts received by the Corporation as fees for guarantees and indemnities taken over or given by it;

(c) all amounts received by the Corporation in respect of guarantees and indemnities taken over or given by it;

(d) all amounts transferred to that Fund from the Deposit Insurance Fund or the General Fund under Section 27; and

(e) all income arising from the investments made out of that Fund.

(2) The said Fund shall be applied—

(a) to make payments in respect of guarantees and indemnities taken over or issued by the Corporation;

(b) to meet any liability in respect of the amount referred to in clause (d) of sub-section (1); and

(c) to meet the whole or any part of the liability on account of depreciation in assets, contributions to staff and superannuation and other funds, or other expenses incurred or to be incurred by the Corporation, as may be decided by the Board.]

24. General Fund.

24. General Fund.—All receipts of the Corporation other than those referred to in sub-section (1) of Section 23 [vii][or in sub-section (1) of Section 23-A] shall be credited to the General Fund and all payments by the Corporation other than those referred to in sub-section (2) [viii][of Section 23, or, as the case may be, sub-section (2) of Section 23-A] shall be made out of that Fund.

25. Investment.

25. Investment.—All moneys belonging to the Deposit Insurance Fund [ix][or the Credit Guarantee Fund] or the General Fund which may not for the time being be required by the Corporation shall be invested in promissory notes, stock or securities of the Central Government and all other moneys shall be deposited with the Reserve Bank.

25-A. Amounts in one Fund may be transferred to the other Fund or may be utilised for other purposes.

[x][25-A. Amounts in one Fund may be transferred to the other Fund or may be utilised for other purposes.—Notwithstanding anything contained in this Act, the Board may—

(a) transfer any amount from the Deposit Insurance Fund to the Credit Guarantee Fund or from the Credit Guarantee Fund to the Deposit Insurance Fund, or

(b) utilise any money standing to the credit of either of the said Funds, for such purpose as it may think fit, if it is satisfied that the balance in the Fund, after such transfer or utilization, will be adequate to meet any probable claim on that Fund.]

26. Advances by Reserve Bank.

26. Advances by Reserve Bank.—(1) The Reserve Bank shall, from time to time, advance to the Corporation on a request by it such sum or sums as may be required by the Corporation for the purposes of the Deposit Insurance Fund [xi][or the Credit Guarantee Fund]:

Provided that the total amount outstanding at any one time on account of such advances shall not exceed five crores of rupees.

(2) The terms and conditions of any advance under this section shall be such as may be determined by the Reserve Bank with the approval of the Central Government.

27. Advances from General Fund to the Deposit Insurance Fund or Credit Guarantee Fund.

[xii][27. Advances from General Fund to the Deposit Insurance Fund or Credit Guarantee Fund.—If, at any time, the amount available in the Deposit Insurance Fund or the Credit Guarantee Fund is insufficient to meet the requirements of that Fund, the Corporation may transfer, on such terms and for such period as may be determined by the Board with the approval of the Reserve Bank, from any of the other two Funds, referred to in Section 22, such amount as may be necessary to meet the requirements of the Deposit Insurance Fund or the Credit Guarantee Fund, as the case may be.]

28. Preparation of balance-sheet, etc., by Corporation.

28. Preparation of balance-sheet, etc., by Corporation.—(1) The balance-sheet and accounts of the Corporation shall be prepared and maintained in such form and manner as may be prescribed.

(2) The Board shall cause the books and accounts of the Corporation to be balanced and closed as on the 31st day of December, [xiii][or such other date in each year as the Central Government may, by notification in the Official Gazette, specify]:

[xiv][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 balancing and closing of, or for other matters relating to, the books or accounts in respect of the concerned years.]

29. Audit.

29. Audit.—(1) The affairs of the Corporation shall be audited by an auditor duly qualified to act as an auditor under sub-section (1) of Section 226 of the Companies Act, 1956 (1 of 1956), who shall be appointed by the Board with the previous approval of the Reserve Bank and shall receive such remuneration from the Corporation as the Reserve Bank may fix.

(2) The auditor shall be supplied with a copy of the annual balance-sheet of the Corporation and it shall be his duty to examine it together with the accounts and vouchers relating thereto and he shall have a list delivered to him of all books kept by the Corporation and shall at all reasonable times have access to the books, accounts and other documents of the Corporation and may, in relation to such accounts, examine any director of the Board or any officer or employee of the Corporation.

(3) The auditor shall make a report to the Corporation upon the annual balance-sheet and accounts and in every such report he shall state whether in his opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of affairs of the Corporation and in case he had called for any explanation or information from the Board, whether it has been given and whether it is satisfactory.

(4) Without prejudice to anything contained in the preceding sub-sections, the Central Government may at any time appoint the Comptroller and Auditor-General of India to examine and report upon the accounts of the Corporation, and any expenditure incurred by him in connection with such examination and report shall be payable by the Corporation to the Comptroller and Auditor-General of India.

30. Income tax and Super tax.

[xv][30. Income tax and Super tax.— [xvi][(1)] Notwithstanding anything contained in the Income Tax Act, 1961 (43 of 1961), the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the accounting year during which the Corporation is established and for [xvii][fourteen] accounting years following that year.]

[xviii][(2) Notwithstanding anything contained in the Income Tax Act, 1961 (43 of 1961), the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the period commencing from the first day of January, 1977, and ending with the commencement of the accounting year during which Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act, 1978, comes into force and for four accounting years following that year.

31. Reserve Fund.

31. Reserve Fund.—After making provision for all its liabilities and for all other matters for which provision is necessary of expedient, including any contribution to the staff and superannuation funds, the Corporation shall transfer the balance, if any, of its income in its General Fund to one or more reserve funds to be utilised in such manner and for such purposes as the Corporation may deem fit.

32. Annual accounts and reports.

32. Annual accounts and reports.—(1) The Corporation shall furnish to the Reserve Bank within three months from the date on which its accounts are balanced and closed the balance-sheet and accounts together with the auditor's report and a report of the working of the Corporation during the year and copies of the said balance-sheet and accounts and reports shall be furnished by the Corporation to the Central Government.

(2) The Central Government shall cause every auditor's report and report of the working of the Corporation to be laid [xix][as soon as may be after they are received before each House of Parliament [xx][***].]

Chapter V

MISCELLANEOUS

33. Staff of Corporation.

33. Staff of Corporation.—(1) The Corporation may appoint such number of officers 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.

(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the Corporation to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the Corporation and the Reserve Bank.

34. Returns from insured banks.

34. Returns from insured banks.—(1) Notwithstanding anything contained in [xxi][the Banking Regulation Act, 1949 (10 of 1949)], or any other law for the time being in force the Corporation may at any time direct an insured bank [xxii][or a credit institution] to furnish to it, within such time as may be specified by the Corporation, such statements and information relating to the deposits in that bank [xxiii][or the credit facilities granted by that credit institution, as the case may be,] as the Corporation may consider necessary or expedient to obtain for the purposes of this Act.

(2) The Corporation may, if it considers it expedient and after consulting the Reserve Bank, publish any information obtained by it under this section in such consolidated form as it may think fit.

35. Corporation to have access to records.

35. Corporation to have access to records.—(1) The Corporation shall have free access to all such records of an insured bank [xxiv][or a credit institution] perusal whereof may appear to the Corporation to be necessary for the discharge of its functions under this Act.

(2) The Corporation may require any insured bank [xxv][or credit institution] to furnish to it copies of any of the records referred to in sub-section (1) and the bank [xxvi][or the credit institution] shall be bound to comply with the requisition.

36. Inspection of insured banks by Reserve Bank.

36. Inspection of insured banks by Reserve Bank.—(1) The Corporation may for any of the purposes of this Act request the Reserve Bank to cause an inspection of the books and accounts or an investigation of the affairs of an insured bank [xxvii][or a credit institution] to be made and on such request the Reserve Bank shall cause such inspection or investigation to be made by one or more of its officers [xxviii][or through such other person or agency as the Reserve Bank may determine].

(2) The provisions of sub-section (2) and sub-section (3) of Section 35 of [xxix][the Banking Regulation Act, 1949 (10 of 1949),] shall apply to an inspection or investigation under sub-section (1) as they apply to an inspection under that section.

(3) When an inspection or investigation has been made under this section, the Reserve Bank shall furnish a copy of its report to the Corporation and [xxx][neither the bank nor the credit institution, as the case may be, inspected or investigated, nor any other bank or credit institution] shall be entitled to be furnished with a copy of such report.

(4) Notwithstanding anything contained in any law for the time being in force, no court, tribunal or other authority shall compel the production or disclosure of a report under this section or of information or material gathered during the course of an inspection or investigation under this section.

37. Corporation to furnish information to Reserve Bank.

37. Corporation to furnish information to Reserve Bank.—The Corporation shall, on a request in writing from the Reserve Bank, furnish to it within such time as may be specified by the Reserve Bank, such statements and information relating to the business or affairs of the Corporation or of an insured bank as the Reserve Bank may consider necessary or expedient.

38. Reserve Bank to furnish information to Corporation.

38. Reserve Bank to furnish information to Corporation.—The Reserve Bank shall, on a request in writing from the Corporation, furnish to it any report or information relating to an insured bank [xxxi][or a credit institution] made or obtained by it under or in pursuance of the Reserve Bank of India Act, 1934 (2 of 1934), or [xxxii][the Banking Regulation Act, 1949 (10 to 1949)].

39. Declaration of fidelity and secrecy.

39. Declaration of fidelity and secrecy.— [xxxiii][(1)] Every director, auditor, officer or other employee of the Corporation or an employee of the Reserve Bank whose services are utilised by the Corporation under sub-section (2) of Section 33 shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.

[xxxiv][(2) The Corporation shall observe, except as otherwise required by law, the practices and usages customary among the bankers, and, in particular, it shall not divulge any information relating to an insured bank or its customers or a credit institution or its customers except in circumstances in which it is, in accordance with law or practices or usages customary among bankers, necessary or appropriate for the Corporation to divulge such information.]

[xxxv][(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005.]

40. Indemnity of directors.

40. Indemnity of directors.—(1) Every director of the Board shall be indemnified by the Corporation 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) A director of the Board shall not be responsible for any other director or for any other officer or other employee of the Corporation, or for any loss or expenses resulting to the Corporation from the insufficiency or deficiency of value of or title to any property or security acquired or taken on behalf of the Corporation or the insolvency or wrongful act of any debtor or any person under obligation to the Corporation or anything done in good faith in the execution of the duties of his office or in relation thereto.

41. Defects in appointments not to invalidate acts, etc.

41. Defects in appointments not to invalidate acts, etc.—(1) No act or proceeding of the Board or of any committee of the Corporation shall be questioned on the ground merely of the existence of any vacancy or defect in the constitution of the Board or Committee.

(2) No act done by any person acting in good faith as a director of the Board shall be deemed to be invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.

42. Protection of action taken under this Act.

42. Protection of action taken under this Act.—No suit or other legal proceeding shall lie against the Corporation or the Reserve Bank or any director of the Board or any officer of the Corporation or the Reserve Bank [xxxvi][or any other person or agency authorised by the Corporation or the Reserve Bank] to discharge any functions under this Act for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act.

43. Companies Act, 1956 and Insurance Act, 1938 not to apply.

43. Companies Act, 1956 and Insurance Act, 1938 not to apply.— Nothing in the Companies Act, 1956 (1 of 1956) or the Insurance Act, 1938 (4 of 1938), shall apply to the Corporation.

44. Liquidation of Corporation.

44. Liquidation of Corporation.—(1) The Corporation shall not be placed in liquidation save by order of the Central Government and in such manner as that Government may direct.

(2) On the liquidation of the Corporation—

(a) the outstanding assets of the Corporation in so far as they relate to the Deposit Insurance Fund shall be distributed among the insured banks in such manner and in such proportion as may be determined by the Central Government having regard to the amounts of premium paid by them during any prescribed period or the deposits of the said banks as on the date of liquidation of the Corporation or other relevant circumstances;

(b) the remaining outstanding assets of the Corporation shall be transferred to the Reserve Bank.

45. Power of Central Government to give directions.

45. Power of Central Government to give directions.—In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may after consulting the Reserve Bank give to it in writing, and if any question arises whether the direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.

46. Dispute as to amount of premium.

46. Dispute as to amount of premium.—Any dispute as to the amount of premium due from any insured bank shall be decided by the Central Government and the decision of that Government shall be final.

47. Penalties.

47. Penalties.—(1) Whoever in any return, balance-sheet, or other document or in any information required or furnished by or under or for the purposes of any provision of this Act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.

(2) If any person fails to produce any book, account or other document, or to furnish any statement or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be punishable with a fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with an additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the first such failure.

48. Offences by companies.

48. Offences by companies.—(1) Where an offence has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any gross negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

(a) “company” means any body corporate and includes [xxxvii][a co-operative society or] a firm or other association of individuals; and

(b) “director” in relation to a firm, means a partner in the firm [xxxviii][and in relation to a co-operative society includes any member of a committee of management or other managing body (by whatever name called) to which the management of the affairs of the bank is entrusted].

49. Cognizance and trial of offences.

[xxxix][49. Cognizance and trial of offences.—(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no court shall take cognizance of any offence punishable under this Act except upon a complaint, in writing, made by an officer of the Corporation, generally or specially authorised in writing in this behalf by the Board, and no court, inferior to the Court of a Metropolitan Magistrate or a Judicial Magistrate of the first class, shall try any such offence.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), a Magistrate may, if he sees reason so to do, dispense with the personal attendance of the officer of the Corporation filing the complaint, but the Magistrate may, in his discretion, at any stage of the proceedings, direct the personal attendance of the complainant.]

50. Regulations.

50. Regulations.—(1) The Board may, with the previous approval of the Reserve Bank, [xl][by notification in the Official Gazette,] make regulations not inconsistent with this Act 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 regulations may provide for—

(a) the times and places of the meetings of the Board or of any committee constituted under this Act and the procedure to be followed at such meetings including the quorum necessary for the transaction of business;

(b) the number of directors constituting an Executive Committee, and the functions that such committee shall discharge;

(c) the functions which any other committee may discharge under this Act;

(d) the fees and allowances that may be paid to the members of a committee other than directors of the Board;

(e) the fees and allowances that may be paid to the directors of the Board;

(f) the periods for which, the times at which and the manner in which premium may be paid by any insured bank;

(g) the interest which may be charged from an insured bank where it makes default in payment of premium;

(h) the manner in which and the time within which the amounts referred to in Section 21 may be paid;

(i) the form and the manner in which the balance-sheet and the accounts of the Corporation shall be prepared or maintained; and

(j) any other matter which is to be, or may be prescribed;

(3) Any regulation which may be made by the Board under this Act may be made by the Reserve Bank within three months of the establishment of the Corporation; and any regulation so made may be altered or rescinded by the Board in the exercise of its powers under this Act.

[xli][(4) Every regulation shall, as soon as may be after it is made under this Act by the 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.]

51. [Amendment of certain enactments].

51. [Amendment of certain enactments]. Repealed by the Repealing and Amending Act, 1964 (52 of 1964), S. 2 and Sch. I.

The First Schedule

THE FIRST SCHEDULE

(See Section 39)

DECLARATION OF FIDELITY AND SECRECY

I . . . . do hereby declare that I will faithfully, truly and to the best of my skill and ability execute and perform the duties required of me as director, auditor, officer or other employee (as the case may be) of the [xlii][Deposit Insurance and Credit Guarantee Corporation] and which properly relate to the office or position held by me in the said Corporation.

I . . . . . . . . . further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the [xliii][Deposit Insurance and Credit Guarantee Corporation] or to the affairs of any person having any dealing with the said Corporation; nor will I allow any such person to inspect or have access to any books or documents, belonging to or in the possession of the [xliv][Deposit Insurance and Credit Guarantee Corporation] and relating to the business of the said Corporation or the business of any person having any dealing with the said Corporation.

(Signature)

Signed before me:

The Second Schedule

THE SECOND SCHEDULE

[Amendment of certain enactments.] Repealed by the Repealing and Amending Act, 1964 (52 of 1964), S. 2 and Sch. I]