Section 31(3) in The State Bank Of India Act, 1955
(3)A director who is directly or indirectly concerned or interested in any contract, loan, arrangement or proposal entered into or proposed to be entered into by or on behalf of the State Bank shall at the earliest possible opportunity disclose the nature of his interest to the Central Board and shall not be present at any meeting of the Central Board when any such contract, loan, arrangement or proposal is discussed unless his presence is required by the other directors for the purpose of eliciting information, and no director so required to be present shall vote on any such contract, loan, arrangement or proposal:Provided that nothing contained in this sub-section shall apply to such director by reason only for his being-(i)a shareholder (other than a director) holding not more than two per cent. of the paid-up capital in any public company as defined in the Companies Act, 1956 (1 of 1956), or any corporation established by or under any law for the time being in force in India or any co-operative society, with which or to which the State Bank has entered into or made, or proposes to enter into or make, a contract, loan, arrangement or proposal; or(ii)a director ex officio of the State Bank [***] [Omitted 'or a director of a subsidiary bank' by State Banks (Repeal and Amendment) Act, 2018 (Act 19 of 2018), dated 2.8.2018.]; or(iii)an officer or other employee of the State Bank, if he is a director appointed under clause (ca) or clause (cb) [* * *] of section 19.
