Section 9 in The Industrial Development Bank Of India Act, 1964
9. Business of Development Bank .-(1) [The Development Bank shall function as the principal financial institution for co-ordinating the working of institutions engaged in financing promoting or developing industry and for assisting the development of such institutions in such manner as it may deem appropriate and may] carry on and transact any of the following kinds of business, namely:-
(a)granting loans and advances to-(i)the Industrial Finance Corporation, any State Financial Corporation or any other financial institution [which may be approved by the Board in this behalf] [ Substituted by Act 5 of 1995, Section 12, for " which may be notified by the Central Government in this behalf" (w.r.e.f. 12.10.1994).], by way of refinance of any loans or advances granted to industrial concerns [* * *] [ Certain words omitted by the Act 52 of 1975, Section 3, (w.e.f. 16.2.1976). These words were inserted by Act 75 of 1972, S.3.] by such corporation or institution which are repayable [within a period not exceeding twenty-five years] [ Substituted by Act 75 of 1972, Section 3, for " on the expiry of not less than three years and not more than twenty-five years" .];(i)within a period not exceeding twelve years in the case of persons outside India, and(ii)within a period not exceeding fifteen years in other cases.](ii)any scheduled bank or State co-operative bank, by way of re-finance of any loans or advances granted to industrial concerns [* * *] [ Certain words omitted by the Act 52 of 1975, Section 3, (w.e.f. 16.2.1976). These words were inserted by Act 75 of 1972, S.3.] by such bank which are repayable [within a period not exceeding fifteen years] [ Substituted by Act 75 of 1972, Section 3, for " on the expiry of not less than six months and not more than ten years" .];(iii)any scheduled bank or State co-operative bank or the Industrial Finance Corporation or any State Financial Corporation or any other financial institution which may be notified by the Central Government in this behalf, by way of refinance of any loans or advances granted to industrial concerns [* * *] [ Certain words omitted by the Act 52 of 1975, Section 3, (w.e.f. 16.2.1976). These words were inserted by Act 75 of 1972, S.3.] or group of industrial concerns by such bank or institution which are for the purpose of, or in connection with, the export of capital goods commodities or merchandise from India [or the execution of any turnkey project outside India by any industrial concern as aforesaid or by any person in India, and, in any case, are repayable- [ Substituted by Act 75 of 1972, Section 3, for " and are repayable on the expiry of not less than six months and not more than ten years" .](b)subject to such conditions as may be prescribed, accepting, discounting or re-discounting bills of exchange and [promissory notes made, drawn, accepted or endorsed by industrial concerns or by any person selling capital goods manufactured by one industrial concern to another industrial concern;] [ Substituted by Act 75 of 1972, Section 3, for " promissory notes of industrial concerns" . ](c)subscribing to or purchasing stocks, shares, bonds or debentures of the Industrial Finance Corporation, any State Financial Corporation or [any other financial institution, whether within or outside India]] [ Substituted by Act 75 of 1972, Section 3, for " any other financial institution" .], [which may be approved by the Board in this behalf] [ Substituted by Act 5 of 1995, Section 12, for " which may be notified by the Central Government in this behalf" (w.r.e.f. 12.10.1994).];(ca)[ granting letters of credit or loans and advances to the Industrial Finance Corporation, any State Financial Corporation or any other financial institution [which may be approved by the Board in this behalf] [Inserted by Act 35 of 1986, Section 7 (w.e.f. 14.8.1986). ],[for the purpose of any business of such Corporation or institution;] [Inserted by Act 35 of 1986, Section 7 (w.e.f. 14.8.1986). ](d)granting loans and advances to any industrial concern or subscribing to, or purchasing, or underwriting the issue of stocks, shares, bonds or debentures of any industrial concern:Provided that nothing contained in this clause shall be deemed to preclude the Development Bank from granting loans or advances to, or subscribing to debentures of, an industrial concern [the amounts outstanding thereon may be convertible at the option of the Development Bank] [ Substituted by Act 75 of 1972, Section 3, for " which may at the option of the Development Bank be convertible" . ] into stocks or shares of that concern within the period the loan, advance or debenture is repayable.[Explanation .-In this clause, the expression "the amounts outstanding thereon "used in relation to any loan or advance, shall mean the principal, interest and other charges payable on such loan or advance as at the time when the amounts are sought to be converted into stocks or shares;] [ Inserted by Act 75 of 1972, Section 3.](da)[ granting loans and advances- [Inserted by Act 75 of 1972, Section 3. ](i)to any person exporting products of industrial concerns; or(ii)to any person outside India, in connection with the export of capital goods from India; or(iii)for the execution of turnkey projects outside India by any industrial concern or by any person in India;(db)transferring for consideration any instrument relating to loans and advances granted by it to industrial concerns;](dc)[ granting loans and advances to any person for purposes of investment in any industrial concern;] [ Inserted by Act 35 of 1986, Section 7 (w.e.f. 14.8.1986).](e)guaranteeing deferred payments due from any industrial concern;(f)guaranteeing-(i)loans raised by industrial concerns which are floated in the public market; and(ii)loans raised by industrial concerns from any scheduled bank or State co-operative bank or the Industrial Finance Corporation or any State Financial Corporation or any other financial institution [which may be approved by the Board in this behalf] [ Substituted by Act 5 of 1995, Section 12, for " which may be notified by the Central Government in this behalf" (w.r.e.f. 12.10.1994).];(g)guaranteeing the obligations of any scheduled bank or State co-operative bank or the Industrial Finance Corporation or any State Financial Corporation or any other financial institution [which may be approved by the Board in this behalf] [Substituted by Act 5 of 1995, Section 12, for " which may be notified by the Central Government in this behalf" (w.r.e.f. 12.10.1994). ], arising out of, or in connection with, underwriting the issue of stocks, shares, bonds or debentures of any industrial concern;(ga)[ granting, opening, issuing, confirming or endorsing letters of credit and negotiating or collecting bills and other documents drawn thereunder; [Inserted by Act 35 of 1986, Section 7 (w.e.f. 14.8.1986). ](gb)providing consultancy and merchant banking services in or outside India;(gc)acting as the trustee for the holders of debentures or other securities;(gd ) acquiring, with the approval of the Central Government, the undertaking, including the business, assets and liabilities of any institution the principal object of which is the promotion or development of industry in India, or the grant of financial assistance for such promotion or development;](h)undertaking research and surveys for evaluating or dealing with marketing or investments and undertaking and carrying on techno-economic studies in connection with the development of industry;(i)providing technical [, legal, marketing ] [ Inserted by Act 35 of 1986, Section 7 (w.e.f. 14.8.1986).]and administrative assistance to any industrial concern or any person for promotion, management or expansion of any industry;(j)planning, promoting and developing industries to fill up gaps in the industrial structure in India;(k)[ promoting, forming or conducting or associating in the promotion, formation or conduct of companies, subsidiaries, societies, trusts or such other associations of persons as it may deem fit;] [ Substituted by Act 35 of 1986, Section 7, for Cl. (k) (w.e.f. 14.8.1986).](ka)[ acting as agent of- [Inserted by Act 75 of 1972, Section 3. ](i)the Central Government or of the Reserve Bank, or(ii)such other Government or person as the Central Government [in consultation with][the Reserve Bank, may authorise;] [Inserted by Act 75 of 1972, Section 3. ](l)performing functions entrusted to, or required of, the Development Bank by this Act or by any other law for the time being in force;(m)doing any other kind of business which the Central Government [* **] [ The words " , on the recommendation of the Reserve Bank, omitted" by Act 52 of 1975, Section 11 (w.e.f. 16.2.1976).] may authorise;(n)generally doing such other acts and things as may be incidental to, or consequential upon, the exercise of its powers or the discharge of its duties under this Act or any other law for the time being in force including sale or transfer of any of its assets.(2)The Development Bank may receive in consideration of any of the services mentioned in sub-section (1) such commission, brokerage, interest, remuneration or fees as may be agreed upon.(3)The Development Bank shall not grant any loan or advance or other financial accommodation on the security of its own bonds or debentures.[9-A. Prohibited business .-(1) The Development Bank shall not enter into any kind of business with any industrial concern, of which any of the directors of the Development Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the Development Bank together hold substantial interest:Provided that this sub-section shall not apply to any industrial concern if any director of the Development Bank-(i)is nominated as a director of the Board of such concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or by a Corporation established by any other law; or(ii)is elected on the Board of such concern by virtue of shares held in the concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or by a Corporation established by any other law, by reason only of such nomination or election, as the case may be.Explanation .- "Substantial interest ", in relation to an industrial concern means the beneficial interest held by one or more of the directors of the Development Bank or by any relative (as defined in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956)) of such director, whether singly or taken together, in the shares of the industrial concern, the aggregate, amount paid-up on which either exceeds five lakhs of rupees or five per cent. of the paid-up share capital of the industrial concern, whichever is the lessor.(2)The provisions of sub-section (1)-(i)shall not apply to any industrial concern as specified therein if the Development Bank is satisfied that it is necessary in the public interest to enter into business with that concern, and entering into any kind of business with such industrial concern shall be in accordance with and subject to such conditions and limitations as may be prescribed;(ii)shall not apply to any transaction relating to the business entered into prior to the commencement of the Industrial Development Bank of India (Amendment) Act, 1972, and all such business and any transaction in relation thereto may be implemented or continued as if that Act had not come into force;(iii)shall apply only so long as the conditions precedent to such disability as set out in the said sub-section continue.]
