Section 41: Power of the State Bank to give directions

41. Power of the State Bank to give directions.--(1) Where the State Bank is satisfied that-- (a) in the public interest; or (b) to prevent the affairs of any banking company being conducted in a mann- er detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or (c) to secure the proper management of any banking company generally; it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions. 2[(2) The State Bank may, from time to time, issue 3[orders, regulations, directions, guidelines, instructions, notifications, and circulars or impose any condition] with respect to activities and operations of banks and the institutions mentioned in section 3A as may be deemed necessary by it for carrying out purposes of this Ordinance and matters ancillary thereto.] 2[(3)] The State Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under sub-section (1), and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect. 3[(4)(a) The State Bank may direct any banking company or class of banking companies to__ (i) submit a recovery plan, where applicable on a group-wide basis, in the form, content and manner as directed by the State Bank, outlining the actions designed to run the banking company as a going concern and return to business as usual, under such scenarios as identified by the banking company or specified by the State Bank from time to time; (ii) remove any impediments to the implementation of the plan and make revisions in the recovery plan; and (iii) revise and update its recovery plan regularly or in case of any material changes in the circumstances of the banking company or as the State Bank deems necessary. (b) The banking company shall notify the State Bank immediately on any event that may necessitate the implementation of its recovery plan. (c) The recovery plan shall not prejudice the powers conferred on the State Bank to take other measures provided under this Ordinance.]

Effective date: 1962-06-07

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