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Section 34 – The State Bank of India Act,1955

The State Bank of India Act,1955

Section 34. Business which the State Bank may not transact

(1) The State Bank shall not make a loan or advance-

(a) For a longer period than six months except as otherwise provided in this Act; or

(b) Upon the security of stock or shares of the State Bank; or

(c) Upon the security of any immovable property or the documents of the title relating thereto, except to the extent necessary of any of the purposes of this Act.

(2) The State Bank shall not, except upon a security of the kind specified in sub-clauses (a) to (e) of clause (i) of section 33 discount bills for any individual or firm for an amount exceeding in the whole at any one time such sum as may be prescribed, or lend or advance in any way to any individual or firm an amount exceeding in the whole at any one time such sum as may be prescribed.

(3) The State Bank shall not discount or buy, or advance or lend or open cash credits, on the security of any negotiable instrument of any individual or firm payable at the place where it is presented for discount which does not carry on i the several responsibilities of at least two persons or firms unconnected with each other in general partnership.

(4) The State Bank shall not discount, lend or advance or open cash credits on the security of any negotiable security (not being a security in which a trustee may invest trust money under section 20 of the Indian Trusts Act,1882 (2 of 1882), or the corresponding provision of law for the time being in force in any country where the State Bank has a branch) which-

(a) At the date of the proposed transaction has a longer period to run than fifteen months, if the security is a bill drawn for the purpose of financing seasonal agricultural operations and six months in other cases; or

(b) If the security is a bill drawn after sight, it is drawn for a longer period than fifteen months in the case of a bill drawn for the purposes of financing seasonal agricultural operations and six months in other cases.

(5) Nothing contained in this section shall prevent the State Bank from allowing any person who keeps and account with the State Bank to overdraw such account without security to such extent as may be prescribed.

(6) Save as otherwise provided in section 33, the State Bank shall not own or acquire any interest in immovable property except for the purpose of providing buildings or other accommodation in which to carry on the business of the State Bank or for providing residences for its officers and other employees:

Provided that if any such building or other accommodation is not immediately required for any of the purposes of the State Bank, the State Bank may utilise it to the best advantage by letting it out or in any other manner.

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The State Bank of India Act,1955

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