MISCELLANEOUSCentral
Section 60 of The National Bank for Agriculture and Rural Development Act, 1981
- (1)The Board may, with the previous approval of the Central Government and in consultation with the Reserve Bank, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.
- (2)In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:--
- (a)the fees or allowances that may be paid to the directors or members of the Advisory Council;
- (b)the times and places of the meetings of the Board or the Executive Committee or the Advisory Council and the procedure to be followed at such meetings including the quorum necessary for the transaction of business;
- (c)the number of directors constituting the Executive Committee and the functions that such Committee shall discharge;
- (d)the manner and terms of issue and redemption of bonds and debentures by the National Bank; 1[(e) the manner of election of directors under clause (f) of sub-section (1) of section 6;] 2* * * * *
- (g)The form and manner in which the balance-sheets and the accounts of the National Bank shall be prepared or maintained; 2* * * * *
- (i)the duties and conduct, salaries, allowances and conditions of service of officers and other employees;
- (j)the establishment and maintenance of provident or other benefit funds for employees of the National Bank; and
- (k)such other matters for which the Board may consider it expedient or necessary to provide for by way of regulations.
- (3)Any regulation which may be made by the Board under this Act may be made by the Reserve Bank, in consultation with the Central Government, before the expiry of three months from the date of establishment of the National Bank, and any regulation so made may be altered and rescinded by the Board in the exercise of its powers under this Act.
- (4)The power to make regulations conferred by this section shall include the power to give retrospective effect to the regulations or any of them from a date not earlier than the date of commencement of this Act, but no retrospective effect shall be given to any regulation so as to prejudicially affect the interest of any person to whom such regulation may be applicable.
- (5)The Central Government shall cause every regulation made under this Act to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.
Summary
- The Board of Directors can create regulations to make the Act work properly, but they must first get approval from the Central Government and consult the Reserve Bank.
- These regulations can cover practical details like how much directors are paid, when and where meetings happen, and how the Executive Committee operates.
- The regulations also control the process for issuing bonds and how certain directors are elected under Section 6 of the Act.
- When the bank was first created, the Reserve Bank had a special power to write the initial regulations within three months, though the Board could change them later.
- The Board is allowed to make regulations that apply to past dates, as long as applying them backward does not unfairly harm anyone.
- Every new regulation must be shown to both Houses of Parliament for thirty days, and Parliament has the final power to modify or cancel it.
Practical examples
1On 10 August 2024, the Board decides it needs a new regulation for employee provident funds. They draft the rule, get the Central Government to approve it, consult the Reserve Bank, and then officially publish it.
2A new rule about meeting procedures is passed on 15 September 2025 and is backdated to take effect from 1 January 2025. This is legal because the backdated rule only simplifies paperwork and does not harm any staff member's existing rights.
FAQ
1. Can the Board make any rule it wants?
No, the rules must not conflict with the Act itself, and the Board needs the Central Government's prior approval.
2. Does Parliament have a say in these regulations?
Yes. Every regulation must be presented to both Houses of Parliament for a total of thirty days, and they can agree to modify or reject it.
3. Can the Reserve Bank write these regulations?
The Reserve Bank could only write them during the first three months after the bank was established. After that, it is the Board's job.
Test yourself
Q1.Under Section 60 of The National Bank for Agriculture and Rural Development Act, 1981, whose previous approval is required before the Board can make regulations?
Q2.Under Section 60 of The National Bank for Agriculture and Rural Development Act, 1981, regulations can prescribe the manner of election for certain directors mentioned in Section 6. According to Section 6, who elects these specific directors?
Q3.Under Section 60 of The National Bank for Agriculture and Rural Development Act, 1981, what special power did the Reserve Bank have regarding regulations when the bank was first established?
Q4.Under Section 60 of The National Bank for Agriculture and Rural Development Act, 1981, how long must a new regulation be laid before each House of Parliament?