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Section 3 in The Industrial Development Bank Of India Act, 1964
3. In view of the enlarged role envisaged for the Development Bank, it is proposed that it should take over the capital held by the Reserve Bank in the different State Financial Corporations and in the Unit Trust of India. Since the Life Insurance Corporation is already wholly owned by the Central Government, no restructuring of its capital is envisaged. 50 per cent of the share capital of the Industrial Reconstruction Corporation of India Limited and the Industrial Finance Corporation of India are already held by the Development Bank. The Development Bank does not propose to hold any share capital in the Industrial Credit and Investment Corporation of India Limited as it is an institution in the private sector. The corporation is, however, being represented on the Board of Directors of Development Bank along with the other institutions and public sector banks so as to facilitate co-ordinate functioning.
4. With the Development Bank assuming the role of the principal financial institution, it is proposed to have representatives of the Development Bank on the Boards of other institutions, wherever considered necessary or feasible.5.To give effect to the above, amendments are proposed to the Industrial Development Bank of India Act, 1964, Reserve Bank of India Act, 1934, Industrial Finance Corporation Act, 1948, State Finance Corporations Act, 1951, Life Insurance Corporation Act, 1956and Unit Trust of India Act, 1963.6. Opportunity has also been taken to streamline other provisions of the different statutes and to propose certain amendments of a clarificatory nature.7. The notes on clauses explain in detail the various provisions contained in the Bill.See Gazette of India, 22-12-1973, Point II ,Section 2,Ext.,p.1183.Amendment Act 73 of 1976 - Statement of Objects and Reasons - Itis proposed to bring about a measure of uniformity in the procedure for appointment, fixation of the terms and conditions of service including removal from, or termination of, service of the chairman, vice-chairman, and managing directors of the State Bank of India, chairmen of the Regional Rural Banks, chairman of the Industrial Finance Corporation of India and chairman and managing director of the Industrial Development Bank of India in the relevant enactments regulating the said institutions. These Executives will also have the option to relinquish office by giving the Central Government notice of three months. It is proposed to make the amendments applicable to the existing incumbents of these offices also. :2. Opportunity has also been taken to streamline some other provisions of these Statutes.SOR- See Gazette of India .24-5-76, Point II, section 2, Ext., page 939.Amendment Act 35 of 1986.- Statement of Objects and Reasons - The Industrial Development Bank of India (the Development Bank) established under the industrial Development Bank of India Act, 1964 is the principal financial institution for providing credit and other facilities for the development of industry, for coordinating the working of institutionsengaged in financing, promoting or developing industries and for assisting the development of such institutons. The Development Bank has been providing direct financial assistance to large and medium large industrial concerns and also providing help to small and medium industrial concerns through banks and state-level financial institution. In the light of experience gained over the years, it is felt necessary to make some new activities also eligible for financial assistance and to enlarge t he scope of business of the Development Bank to cover certain activities which the Development Bank could not take up in the absence of enabling provisions. It is also felt necessary to enlarge the capital base so as to enable the Development Bank to cater to the growing volume of business. It is also proposed to provide more operational flexibility to the Development Bank to enable it to discharge more effectively its functions as the principal financial institution for the development of industries.2. The main proposals are as follows: (a) The present definition of "industrial concern" as contained in the Act does not include many important activities. It is, therefore, proposed to widen the definition of "industrial concern" so as to enable the Development Bank to provide financial assistance of mines, medical, health or allied services, leasing and sub-leasing activities, information technology, telecommunicatons and electronics. It is also proposed to empower the Central Government to bring within the purview of the definition "industrial concern" engaged in activities which may be found to be support worthy. (b) In view of the expanding volume of its business and the expected growth if in the Development Bank's activities, it is proposed to raise the authorised capital of the Bank from Rs. 500to Rs. 1,000 crores which limit may be increased by the Central Government up to Rs.2,000 crores by notification in the .official Gazette. (c) It is proposed to enlarge the scope of business which the Development Bank can undertake by empowering it to grant lives of credit or loans and advances, otherwise than by way of subscription to shares/debentures to Industrial Finance Corporation of India, State Financial Corporations or any other financial institutions notified by the Central Government, to grant loans and advances to any person for purpose of investment in any industrial project to open and advise letters of credit and to negotiate or collect, bills and other documents drawn there under, to provide consultancy and merchant banking services in or outside India, to act as trustee for the holders of debentures and other securities and to provide for acquisition of business and undertaking of any other financial institution. In view of these amendments, the Development Bank will be able to undertake these activities and discharge its role as the principal financial institution. (d) It is proposed to amend the Act to enable the Development Bank to open offices even a the place where it has its head office. (e) A new provision is sought to be inserted to enable the Development Bank to purchase the participation certificates under the participation certificate scheme operated by IDBI, IFIC and ICICI providing for a single window clearance of the proposals for setting up an industrial unit, and speedy availability of funds for the project. (f) Presently, the directors nominated by the Central Government from amongst the employees of the Development Bank and financial institutions and persons having special skills and experience, hold office during the pleasure of the Central Government. It is proposed to provide that such members shall hold office for such term not exceeding three years as the Central Government may specify, (g) The acccountig year of the Development Bank at present is from 1st July to 30th June. It is proposed to amend the Act to provide flexibility to the Development Bank to change the accounting year, if need be,3. It is also proposed to make certain other minor and consequential amendments in the Act.4. The Bill seeks to achieve the above objects. -Gazette of India , 20-12-85, Point II, section 2, Ext., page 5 (.No. 73).[16th May, 1964]An Act to establish the Industrial Development Bank of India [as the principal financial institution for co-ordinating, in conformity with national priorities, the working of institutions engaged in financing, promoting or developing industry, for assisting the development of such institutions] [ Inserted by Act 52 of 1975, Section 2 (w.e.f. 16.2.1976).] for providing credit and other facilities for the development of industry and for matters connected therewith and further to amend certain enactments.Be it enacted by Parliament in the Fifteenth Year of the Republic of India as follows:-| Brought into force on 20.6.1964. |