10.
Prohibition of employment of managing agents and restrictions
on certain forms of employment. —(1) No banking
company —
(a) shall employ or be managed by a managing agent; or
(b) shall employ or continue the employment of any person—
(i) who is, or at any time has been, adjudicated insolvent,
or has suspended payment or has compounded with his creditors,
or who is, or has been, convicted by a criminal court of an
offence involving moral turpitude; or
(ii) whose remuneration or part of whose remuneration takes
the form of commission or of a share in the profits of the
company:
Provided that nothing contained in this sub-clause shall
apply to the payment by a banking company of—
(a) any bonus in pursuance of a settlement or award arrived
at or made under any law relating to industrial disputes or
in accordance with any scheme framed by such banking company
or in accordance with the usual practice prevailing in banking
business;
(b) any commission to any broker (including guarantee broker),
cashier-contractor, clearing and forwarding agent, auctioneer
or any other person, employed by the banking company under
a contract otherwise than as a regular member of the staff
of the company; or
(iii) whose remuneration is, in the opinion of the Reserve
Bank, excessive; or
(c) shall be managed by any person—
(i) who is a director of any other company not being—
(a) a subsidiary of the banking company, or
(b) a company registered under section 25 of the Companies
Act, 1956 (1 of 1956):
Provided that the prohibition in this sub-clause shall not
apply in respect of any such director for a temporary period
not exceeding three months or such further period not exceeding
nine months as the Reserve Bank may allow; or
(ii) who is engaged in any other business or vocation; or
(iii) whose term of office as a person managing the company
is for period exceeding five years at any one time:
Provided that the term of office of any such person may be
renewed or extended by further periods not exceeding five
years on each occasion subject to the condition that such
renewal/extension shall not be sanctioned earlier than two
years from the date on which it is to come into force:
Provided also that where the term of office of such person
is for an indefinite period, such term, unless it otherwise
comes to an end earlier, shall come to an end immediately
on the expiry of five years from the date of his appointment
or on the expiry of three months from the date of commencement
of section 8 of the Banking Laws (Miscellaneous Provisions)
Act, 1963 (55 of 1963), whichever is later:
Provided further that nothing in this clause shall apply
to a director, other than the managing director, of a banking
company by reason only of his being such director.
Explanation. — For the purpose of sub-clause (iii)
of clause (b), the expression "remuneration", in
relation to person employed or continued in employment, shall
include salary, fees and perquisites but shall not include
any allowances or other amounts paid to him for the purpose
of reimbursing him in respect of the expense actually incurred
by him in the performance of his duties.
(2) In forming its opinion under sub-clause (iii) of clause
(b) of sub-section (1), the Reserve Bank may have regard among
other matters to the following: —
(i) the financial condition and history of the banking company,
its size and area of operation, its resources, the volume
of its business, and the trend of its earning capacity;
(ii) the number of its branches or offices;
(iii) the qualifications, age and experience of the person
concerned;
(iv) the remuneration paid to other persons employed by the
banking company or to any person occupying a similar position
in any other banking company similarly situated; and
(v) the interests of its depositors.
(3) Omitted by Act 55 of 1963, Section 8 w.e.f. 1-2-1964.
(4) Omitted by Act 55 of 1963, Section 8 w.e.f. 1-2-1964.
(5) Omitted by Act 55 of 1963, Section 8 w.e.f. 1-2-1964.
(6) Any decision or order of the Reserve Bank made under
this section shall be final for all purposes.
|
