Section 33. Funds of the Financial Corporation

CHAPTER IV INVESTMENT OF FUNDS, ACCOUNTS AND AUDIT 33. Funds of the Financial Corporation. —(1) Every Financial Corporation shall have its own fund, and all receipts of the Financial Corporation shall be carried thereto and all payments by the Corporation shall be made therefrom. (2) All moneys belonging to the fund shall be deposited in the Reserve Bank[2] [or the State Bank of India or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959)][3] [or in any of the banks specified in column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970)[1] [or any of the banks specified in column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980)][4] [or, in consultation with the Reserve Bank, in a scheduled bank or a State Co-operative Bank]. 5[34. Investment of funds. —The Financial Corporation may invest its funds in accordance with applicable guidelines and prudential norms as may be prescribed and in such securities as the Board may decide from time to time.] 35. Disposal of profits .—(1) The Financial Corporation shall establish a reserve fund. (2) After making provision for bad and doubtful debts, depreciation of assets and all other matters which are usually provided for by banking companies, the Financial Corporation may out of its net annual profits declare a dividend: 1. Ins. by Act 43 of 1985, s. 21 (w.e.f. 21-8-1985). 2. Subs. by Act 6 of 1962, s. 17, for "or with any agency of the Reserve Bank other than a Government treasury" (w.e.f. 16-4-1962). 3. Ins. by Act 77 of 1972, s. 22 (w.e.f. 30-12-1972). 4. Subs. by Act 56 of 1956, s. 18, for "or in a scheduled bank in consultation with the Reserve Bank" (w.e.f. 1-10-1956). 5. Subs. by Act 39 of 2000, s. 21, for section 34 (w.e.f. 5-9-2000). 1* * * * * 2* * * * * 3[35A. Special reserve fund. —(1) the Financial Corporation may establish a special reserve fund, to which shall be transferred such portion of the dividends accruing to the State Government Development Bank and the Small Industries Bank on the shares of the Financial Corporation as may be fixed by agreement between the State Government, Development Bank and the Small Industries Bank: Provided that after the notified date this sub-section shall have effect as if for the words "the State Government, the Development Bank and the Small Industries Bank", the words "the State Government and the Small Industries Bank" have been substituted except as regards all dividends accruing in respect of any completed accounting period prior to the notified date. (2) No shareholder of the Financial Corporation, other than the State Government or the Small Industries Bank, shall have any claim to the special reserve fund. (3) The amount standing to the credit of the special reserve fund may be utilised by the Financial Corporation for only such purposes as are approved by the State Government and the Small Industries Bank.]