Section 4. Subs. by s. 11, ibid ., for "two thousand and five hundred rupees" (w.e.f. 18-1-2013). 5. Ins. by Act 95 of 1956, s. 10 (w.e.f. 14-1-1957)

4. Subs. by s. 11, ibid ., for "two thousand and five hundred rupees" (w.e.f. 18-1-2013). 5. Ins. by Act 95 of 1956, s. 10 (w.e.f. 14-1-1957). 6. Subs. by Act 20 of 1994, s. 9, for "Every chairman, director, auditor" (w.e.f. 31-1-1994). 7. Ins. by Act 55 of 1963, s. 26 (w.e.f. 1-2-1964). of[1] [the Reserve Bank or, as the case may be, the National Bank] generally or specially authorised in writing in this behalf by[2] [the Reserve Bank or, as the case may be, the National Bank], and[2] [no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court superior thereto] shall try any such offence. 4. No separate compensation shall be payable for any profits or any dividends in respect of any period immediately preceding the appointed day, for which, in the ordinary course, profits would have been transferred or dividend declared after the appointed day.] STATEMENT OF OBJECTS AND REASONS 4. Cls. (fi), (fii) and (g) omitted by s. 4, ibid. (w.e.f. 1-4-2021). 5. Subs. by s. 4, ibid. , for clause (i) (w.e.f. 1-4-2021). (1) A co-operative bank may, with the prior approval of the Reserve Bank, issue, by way — of public issue or private placement, (i) equity shares or preference shares or special shares, on face value or at premium; and (ii) unsecured debentures or bonds or other like securities with initial or original maturity of not less than ten years, to any member of such co-operative bank or any other person residing within its area of operation, subject to such conditions and ceiling, limit or restriction on its issue or subscription or transfer, as may be specified by the Reserve Bank in this behalf. (2) Save as otherwise provided in this Act,— (i) no person shall be entitled to demand payment towards surrender of shares issued to him by a co-operative bank; and (ii) a co-operative bank shall not withdraw or reduce its share capital, except to the extent and subject to such conditions as the Reserve Bank may specify in this behalf.";] 1[(j) for section 18, the following section shall be substituted:— 4. Cls. (x), (y), (z) and (za) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021). 5. Subs. by Act 24 of 2004, s. 2, for clause (zaa) (w.e.f. 24-9-2004). 6. Subs. by Act 39 of 2020, s. 4, for "multi-State co-operative bank" (w.e.f. 1-4-2021). 7. Ins. by s. 4, ibid. (w.e.f. 1-4-2021). (a) the chairman, managing director and other directors as from the date of supersession of the Board shall vacate their offices as such; (b) all the powers, functions and duties which may, by or under the provisions of the Multi-State Co-operative Societies Act, 2002 (39 of 2002) or this Act or any other law for the time being in force, be exercised and discharged by or on behalf of the Board of directors of such a[1] [co-operative bank] or by a resolution passed in general meeting of such co-operative bank, shall, until the Board of directors of such co-operative bank is reconstituted, be exercised and discharged by the Administrator appointed by the Reserve Bank under sub-section (2): Provided that the power exercised by the Administrator shall be valid notwithstanding that such power is exercisable by a resolution passed in the general meeting of such multi-State co-operative bank. (5) (a) The Reserve Bank may constitute a committee of three or more persons who have experience in law, finance, banking, administration or accountancy to assist the Administrator in discharge of his duties. The provisions of law relating to banking companies at present form a subsidiary portion of the general law applicable to companies and are contained in Part XA of the Indian Companies Act, 1913. These provisions, which were first introduced in 1936, and which have undergone two subsequent modifications, have proved inadequate and difficult to administer. Moreover while the primary objective of Companies Law is to safeguard the interests of the stock-holder, that of banking legislation should be the protection of the interests of the depositor. It has therefore been felt for some time that separate legislation was necessary for the regulation of banking in India. This need has become the more insistent on account of the considerable development that has taken place in recent years in banking, especially the rapid growth of banking resources and of the number of banks and branches. Regard must also be had to the fact that the banking system is likely in the post-war period to be more vulnerable by reason of the great expansion. both quantitatively and relatively, that has taken place in demand deposits, as compared with time deposits, during the war years. The enactment of a separate comprehensive measure has in consequence now become imperative. 4. Income from non-banking assets and profit from sale of or dealing with such assets. . 5. Other receipts. . . . . . . "18. Cash reserve.—(1) Every co-operative bank, not being[2] [a co-operative bank] for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 3[(hereinafter referred to as a "scheduled co-operative Bank")], shall maintain in India by way of cash 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 accounts, 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[4] [such per cent.] of the total of its demand and time liabilities in India, as on the[5] [last day] of the second preceding fortnight[6] [as the Reserve Bank may specify, by notification in the official Gazette, from time to time having regard to the needs for securing the monetary stability in the country] and shall submit to the Reserve Bank before the fifteenth day of every month a return showing the amount so held on[7] [the last day of the fortnight] during a month with particulars of its demand and time liabilities in India on[8] [the last day of the fortnight or if the last day of any such fortnight] 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— (b) The committee shall meet at such times and places and observe such rules of procedure as may be specified by the Reserve Bank. (6) The salary and allowances to the Administrator and the members of the committee constituted by the Reserve Bank shall be such as may be specified by the Reserve Bank and be payable by the concerned[1] [co-operative bank]. (7) On and before expiration of period of supersession of the Board of directors as specified in the order issued under sub-section (1), the Administrator of the[1] [co-operative bank] shall call the general meeting of the society to elect new directors. (8) Notwithstanding anything contained in any other law or in any contract, or bye-laws of a[1] [co-operative bank], no person shall be entitled to claim any compensation for the loss or termination of his office. (9) The Administrator appointed under sub-section (2) shall vacate office immediately after the Board of directors of the multi-State co-operative society has been constituted. 2[(10) The provisions of section 36ACA shall not apply to a co-operative bank.] 3* * * * * 36AAC. Reimbursement to Deposit Insurance Corporation by liquidator or transferee bank.—Where a multi-State co-operative bank, being an insured bank within the meaning of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), is wound up and the Deposit Insurance Corporation has become liable to the depositors of the insured bank under sub-section (1) or sub-section (2) of section 16 of that Act, the Deposit Insurance Corporation shall be reimbursed by the liquidator or such other person in the circumstances, to the extent and in the manner provided in section 21 of that Act."; (zab) In section 36AD, sub-section (3) shall be omitted; 4[(zb) Part IIC shall be omitted;] 1. Subs. by Act 39 of 2020, s. 4, for "multi-State co-operative bank" (w.e.f. 1-4-2021). 2. Ins. by s. 4, ibid. (w.e.f. 1-4-2021). 3. S. 36AAB omitted by s. 4, ibid . (w.e.f. 1-4-2021). 4. Subs. by s. 4, ibid ., for cl. (zb) (w.e.f. 1-4-2021). 1 [(zc) in section 46,— 2* * * * * (ii) in clause (a) of the Explanation , after the words "includes a", the words "co-operative society" shall be inserted;] 3* * * * * * (ze) section 49 shall be omitted; 3* * * * * * 4[(zg) in section 49B, references to "Central Government" shall be construed as references to "Central Registrar" or "Registrar of Co-operative Societies", as the case may be, under the law under which a co-operative bank is registered;] 5* * * * * * 4. If the debtor is adjudged insolvent either before or after he has been included in any such list, but before such list is settled, the name and address of the assignee or the receiver of his estate, as the case may be, should be stated in, or added to, the list. (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,[9] * the Exim Bank,[10] [the Reconstruction Bank],[11] [the National Housing Bank]], the National Bank[12] [, 1. Subs. by Act 1 of 1984, s. 42, for clause (j) (w.e.f. 29-3-1985). 2. Subs. by Act 4 of 2013, s. 14, for "State Co-operative Bank" (w.e.f. 18-1-2013). 3. Subs. by s. 14, ibid ., for "(hereinafter referred to as a "scheduled State Co-operative Bank)" (w.e.f. 18-1-2013). 4. Subs. by s. 14, ibid ., for "at least three per cent." (w.e.f. 18-1-2013). 5. Subs. by Act 16 of 2025, s. 14, for "last Friday" (w.e.f. 15-12-2025). 6. Ins. by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013). 7. Subs. by Act 16 of 2025, s. 14, for "alternate Friday" (w.e.f. 15-12-2025). 8. Subs. by s. 14, ibid., for "such Fridays or if any such Friday" (w.e.f. 15-12-2025). 9. The words "the Development Bank" omitted by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013). 10. Ins. by Act 62 of 1984, s. 71 and Sch. III (w.e.f. 20-3-1985). 11. Ins. by Act 53 of 1987, s. 56 and Sch. II (w.e.f. 9-7-1988). 12. Ins. by Act 39 of 1989, s. 53 and Sch. II (w.e.f. 7-3-1990). 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; (zi) section 51 shall be omitted; 6[(zj) after section 53, the following section shall be inserted, namely:— "53A. Powers to exempt co-operative banks in certain cases.—Notwithstanding anything contained in any other provisions of this Act, the Reserve Bank may, from time to time, on being satisfied that it is necessary so to do, declare, by notification in the Official Gazette, that the provisions of item (iii) of clause (b) of sub-section ( 1 sub-section (2), of section 10, clause (a) of sub-section (2) of section 10A, sub-section (1A) of section 10B and clause (b) of sub-section (1) of section 35B of this Act shall not apply to a co-operative bank or class of co-operative banks, either generally or for such period as may be specified therein, subject to such conditions, limitations or restrictions as it may think fit to impose.",] Official Gazette, that the provisions of item (iii) of clause (b) of sub-section (1) and 7[(zji) in section 54, after the expression "Reserve Bank", wherever 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(18 of 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 Practitioners' Clients' Accounts) Act, 1949 (46 of 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."; 1. Subs. by Act 1 of 1984, s. 42, for clause (zc) (w.e.f. 15-2-1984). 2. Sub-cl. (i) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021). 4[(1A) If the balance held by co-operative bank referred to in sub-clause (cci) of clause (c) of section 56 of the Banking Regulation Act, 1949 (10 of 1949), at the close of business on any day is below the minimum specified under sub-section (1), such co-operative bank shall, without prejudice to the provisions of any other law for the time being in force, be liable to pay to the Reserve Bank, in respect of that day, penal interest at a rate of three per cent. above the bank rate on the amount by which such balance falls short of the specified minimum, and if the shortfall continues further, the penal interest so charged shall be increased to a rate of five per cent. above the bank rate in respect of each subsequent day during which the default continues. (1B) Notwithstanding anything contained in this section, if the Reserve Bank is satisfied, on an application in writing by the defaulting co-operative bank, that such defaulting co-operative bank had sufficient cause for its failure to comply with the provisions of sub-section (1), it may not demand the payment of the penal interest. 1. Subs. by Act 4 of 2013, s. 14, for "State Co-operative Bank" (w.e.f. 18-1-2013). 2. Subs. by Act 16 of 2025, s. 14, for Clause (b) (w.e.f. 15-12-2025). 3. Subs. by s. 14, ibid ., for "a corresponding new bank" (w.e.f. 18-1-2013). 4. Ins. by s. 14, ibid . (w.e.f. 18-1-2013). (1C) The Reserve Bank may, for such period and subject to such conditions as may be specified, grant to any co-operative bank such exemptions from the provisions of this section as it thinks fit with reference to all or any of its officers or with reference to the whole or any part of its assets and liabilities.] (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* * * * * 2[(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;] 1* * * * * (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— 3* * * * *