The Banking Regulation Act,1949
Section 36AAA. Supersession of Board of directors of a multi-State co-operative bank
1[Supersession of Board of directors of a multi-State co-operative bank. (1) Where the Reserve Bank is satisfied that in the public interest or for preventing the affairs of a multi-State co-operative bank being conducted in a manner detrimental to the interest of the depositors of the multi-State co-operative bank or for securing the proper management of the multi-State co-operative bank, it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing, by order, supersede the Board of directors of such multi-State co-operative bank for a period not exceeding five years as may be specified in the order, which may be extended from time to time, so, however, that total period shall not exceed five years.
(2) The Reserve Bank may, on supersession of the Board of directors of the multi-State co-operative bank under sub-section (1) appoint an administrator for such period as it may determine.
(3) The Reserve Bank may issue such directions to the Administrator as it may deem appropriate and the Administrator shall be bound to follow such directions.
(4) Upon making the order of supersession of the Board of directors of a multi-State co-operative bank, –
(a) The Chairman, managing director and other directors as from the date of supersession of the Board shall vacate their offices as such;
(b) All the powers, functions and duties which may, by or under the provisions of the Multi-State Co-operative Societies Act,2002 or this Act or any other law for the time being in force, be exercised and discharged by or on behalf of the Board of directors of such a multi-State Co-operative bank or by a resolution passed in general meeting of such co-operative bank, shall, until the Board of directors of such co-operative bank is reconstituted, be exercised and discharged by the Administrator appointed by the Reserve Bank under sub-section (2):
Provided that the power exercised by the Administrator shall be valid not withstanding that such power is exercisable by a resolution passed in the general meeting of such multi-State co-operative bank.
(5) (a) The Reserve Bank may constitute a committee of three or more persons who have experience in law, finance, banking, administration or accountancy to assist the Administrator in discharge of his duties.
(b) The committee shall meet at such times and places and observe such rules of procedure as may be specified by the Reserve Bank.
(6) The salary and allowances to the Administrator and the members of the committee constituted by the Reserve Bank shall be such as may be specified by the Reserve Bank and may be payable by the concerned multi-State co-operative bank.
(7) On and before expiration of period of supersession of the Board of directors as specified in the order issued under sub-section (1), the Administrator of the multi-State co-operative bank shall call the general meeting of the society to elect new directors.
(8) Notwithstanding anything contained in any other law or in any other contract, or bye-laws of a multi-State co-operative bank, no person shall be entitled to claim any compensation for the loss or termination of his office.
(9) The Administrator appointed under sub-section (2) shall vacate office immediately after the board of directors of the multi-State co-operative society has been constituted. ]
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1. Inserted by Act 24 of 2004.
