Section 10 in The Banking Companies (Acquisition And Transfer Of Undertakings) Act, 1970
10. Closure of accounts and disposal of profits.-Every corresponding new bank shall cause its books to be closed and balanced on the 31st day of December [or such other date in each year as the Central Government may by notification in the Official Gazette, specify] and shall appoint, with the previous approval of the Reserve Bank, auditors for the audit of its accounts:
[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 expendient for the closing and balancing of, or for other matters relating to, the books in respect of the concerned years.] [Inserted by Act 66 of 1988, Section 32 (w.e.f. 30.12.1988). ](2)Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under section 226 of the Companies Act, 1956 (1 of 1956), and shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government.(3)Every auditor shall be supplied with a copy of the annual balance-sheet and profit and loss account and a list of all books kept by the corresponding new bank, and it shall be the duty of the auditor to examine the balance-sheet and profit and loss account with the accounts and vouchers relating thereto, and in the performance of his duties, the auditor:-(a)shall have, at all reasonable times, access to the books, accounts and other documents of the corresponding new bank,(b)may, at the expense of the corresponding new bank, employ accountants or other persons to assist him in investigating such accounts, and(c)may, in relation to such accounts, examine the Custodian or any officer or employee of the corresponding new bank.(4)Every auditor of a corresponding new bank shall make a report to the Central Government upon the annual balance-sheet and accounts and in every such report shall state-(a)whether, in his opinion, the balance-sheet is a full and fair balance-sheet containing all the necessary particulars and is properly drawn up so as to exhibit a true and fair view of the affairs of the corresponding new bank, and in case he had called for any explanation or information, whether it has been given and whether it is satisfactory;(b)whether or not the transactions of the corresponding new bank, which have come to his notice, have been within the powers of that bank;(c)whether or not the returns received from the offices and branches of the corresponding new bank have been found adequate for the purpose of his audit;(d)whether the profit and loss account shows a true balance of profit or loss for the period covered by such account; and(e)any other matter which he considers should be brought to the notice of the Central Government.[ Explanation I.-For the purposes of this Act-(a)the balance-sheet shall not be treated as not disclosing a true and fair view of the affairs of the corresponding new bank, and(b)the profit and loss account shall not be treated as not showing a true balance of profit or loss for the period covered by such account, merely by reason of the fact that the balance-sheet or, as the case may be, the profit and loss account does not disclose any matters, which are by the provisions of the Banking Regulation Act, 1949 (10 of 1949), read with the relevant provisions of this Act, or any other Act not required to be disclosed.Explanation II.-For the purposes of this Act the accounts of the corresponding new bank shall not be deemed as having not been properly drawn up on the ground merely that they do not disclose certain matters, if-(i)those matters are such as the corresponding new bank is, by virtue of any provision contained in the Banking Regulation Act, 1949 (10 of 1949), read with the relevant provisions of this Act, or any other Act, not required to disclose; and(ii)the provisions referred to in clause (i) are specified in the balance-sheet and profit and loss account of the corresponding new bank or in the auditor's report.](5)The report of the auditor shall be verified, signed and transmitted to the Central Government.(6)The auditor shall also forward a copy of the audit report to the corresponding new bank and to the Reserve Bank.(7)After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies, a corresponding new bank [may, out of its net profits, declare a dividend and retain the surplus, if any.] [Substituted by Act 37 of 1994, Section 7, for " shall transfer the balance of profits to the Central Government" (w.e.f. 15.7.1994). ][(7-A) Every corresponding new bank shall furnish to the Central Government [and to the Reserve Bank] [Inserted by Act 1 of 1984, Section 67 (w.e.f. 15.2.1984). ] the annual balance-sheet, the profit and loss account, and the auditor's report and a report by its Board of Directors on the working and activities of the bank during the period covered by the accounts.] [Inserted by Act 1 of 1984, Section 67 (w.e.f. 15.2.1984). ](8)The Central Government shall cause every auditor's report and report on the working and activities of each corresponding new bank to be laid [as soon as may be after they are received before each House of Parliament] [Substituted by Act 1 of 1984, Section 67, for certain words (w.e.f. 15.2.1984). ] [* * *] [Certain words omitted by Act 81 of 1985, Section 9 (w.e.f. 1.5.1986). ].(9)[ Without prejudice to the foregoing provisions, the Central Government may, at any time, appoint such number of auditors as it thinks fit to examine and report on the accounts of a corresponding new bank and the auditors so appointed shall have all the rights, privileges and authority in relation to the audit of the accounts of the corresponding new bank which an auditor appointed by the corresponding new bank has under this section.] [Inserted by Act 1 of 1984, Section 67 (w.e.f. 15.2.1984). ][10-A. Annual general meeting.-(1) A general meeting (in this Act referred to as an annual general meeting) of every corresponding new bank which has issued capital under clause (c) of sub-section (2-B) of section 3 shall be held at the place of the head office of the bank in each year at such time shall from time to time be specified by the Board of Directors:Provided that such annual general meeting shall be held before the expiry of six weeks from the date on which the balance-sheet, together with the profit and loss account and auditor's report is, under sub-section (7-A) of section 10, forwarded to the Central Government or to the Reserve Bank, whichever date is earlier.(2)The shareholders present at an annual general meeting [shall be entitled to discuss, approve and adopt] the balance-sheet and the profit and loss account of the corresponding new bank made up to the previous 31st day of March, the report of the Board of Directors on the working and activities of the corresponding new bank for the period covered by the accounts and the auditor's report on the balance-sheet and accounts.](3)[ Nothing contained in this section shall apply during the period for which the Board of Directors of a corresponding new bank had been superseded under sub-section (1) of section 18-A:Provided that the Administrator may, if he considers it appropriate in the interest of the corresponding new bank whose Board of Directors had been superseded, call annual general meeting in accordance with the provisions of this section.] [Inserted by Act 45 of 2006, Section 5 (w.e.f. 16.10.2006). ][10-B. Transfer of unpaid or unclaimed dividend to Unpaid Dividend Account.¬-(1) Where, after the commencement of the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, a dividend has been declared by a corresponding new bank but has not been paid or claimed within thirty days from the date of declaration, to, or by, any shareholder entitled to the payment of the dividend, the corresponding new bank shall, within seven days from the date of the expiry of such period of thirty days, transfer the total amount of dividend which remains unpaid or unclaimed within the said period of thirty days, to a special account to be called "Unpaid Dividend Account of................................... (the name of the corresponding new bank)".Explanation .-In this sub-section, the expression "dividends which remains unpaid" means any dividend the warrant in respect thereof has not been encashed or which has otherwise not been paid or claimed.(2)Where the whole or any part of any dividend, declared by a corresponding new bank before the commencement of the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, remains unpaid at such commencement, the corresponding new bank shall, within a period of six months from such commencement, transfer such unpaid amount to the account referred to in sub-section (1).(3)Any money transferred to the Unpaid Dividend Account of a corresponding new bank in pursuance of this section which remains unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the corresponding new bank to the Investor Education and Protection Fund established under sub-section (1) of section 205-C of the Companies Act, 1956 (1 of 1956).(4)The money transferred under sub-section (3) to the Investor Education and Protection Fund shall be utilised for the purposes and in the manner specified in section 205-C of the Companies Act, 1956 (1 of 1956).]
