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Section 17 of Bank Nationalisation Act, 1980 — Construction of references to existing banks

Bare section text

Official Legislative Text

Any reference to any existing bank in any law, other than this Act, or in any contract or other instrument shall, in so far as it relates to the undertaking which has been transferred by section 4, be construed as a reference to the corresponding new bank.

Educational Study Layer

Summary

Any mention of an "existing bank" (the old bank) in other laws is now treated as a mention of the "corresponding new bank" (the new bank).
This rule also applies to contracts and any other legal instruments that existed before the change.
This automatic update only applies to the parts of the bank's business that were transferred under Section 4.
Section 4 is the core rule that moves the undertakings of old banks to the new banks.
This provision ensures that legal documents don't have to be rewritten just because the bank's name and structure changed.

Practical examples

1A customer named Sarah Jones has a loan contract from 1979 with "The Andhra Bank Limited." Under Section 17, and because Section 4 transferred the undertaking, that contract is now legally read as being with "Andhra Bank," the corresponding new bank.

2A law passed in 1975 mentions specific rights held by "Vijaya Bank Limited." Under Section 17, that legal reference is automatically construed as referring to the new "Vijaya Bank" created by the 1980 Act.

FAQ

1. Does this apply to all parts of the old bank?

It applies in so far as the reference relates to the "undertaking" which was transferred by Section 4 of the Act.

2. If a law mentions an old bank, does it automatically mean the new bank?

Yes, if it relates to the business that was moved to the new bank under the vesting rules of Section 4.

Practice Quiz

Q1.Under Section 17 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, how should a reference to an "existing bank" in a contract be construed?

Q2.Section 17 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, applies to references in which of the following?

Q3.What is the relationship between Section 17 and Section 4 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980?

Q4.Under Section 4 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, what happens to the undertakings of existing banks?

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