16. [ Prohibition of common directors. [Substituted by Act 95 of 1956, Section 5, for Section 16 (w.e.f. 14.1.1957).]
[(1) No banking company incorporated in India shall have as a director in its Board of directors any person who is a director of any other banking company.(1-A) No banking company referred to in sub-section (1) shall have in its Board of directors, more than three directors who are directors of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent. of the total voting rights of all the shareholders of that banking company.] [Inserted by Act 33 of 1959, Section 10 (w.e.f. 1.10.1959).](2)If immediately before the commencement of the Banking Companies (Amendment) Act, 1956 (95 of 1956), any person holding office as a director of a banking company is also a director of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent. of the total voting rights of all the shareholders of the banking company, he shall, within such period from such commencement as the Reserve Bank may specify in this behalf-(a)either resign his office as a director of the banking company; or(b)choose such number of companies as among themselves are not entitled to exercise voting rights in excess of twenty per cent. of the total voting rights of all the shareholders of the banking company as companies in which he wishes to continue to hold the office of a director and resign his office as a director in the other companies.](3)[ Nothing in sub-section (1) shall apply to, or in relation to, any director appointed by the Reserve Bank.] [Inserted by Act 58 of 1968, Section 4 (w.e.f. 1.2.1969).]
