8. Amendment of the Deposit Insurance corporation Act, 1961.- On the commencement of this Act, the Deposit Insurance Corporation Act, 1961 (47 of 1961), shall have effect subject to the following amendments, namely:--

(1) in the long title, after the words "insurance of deposits", the words "and guaranteeing of credit facilities" shall be inserted;

(2) in section 1, in sub-section (1), for the words "the Deposit Insurance Corporation", the words "the Deposit Insurance and Credit Guarantee Corporation" shall be substituted;

(3) in section 2,--

(i) in clause (e), for the words "the Deposit Insurance Corporation", the words "the Deposit Insurance and Credit Gua¬rantee Corporation" shall be substituted;

(ii) after clause (ee), the following clause shall be inserted, namely: --

'(eea) "credit institution" means all or any of the following, namely: --

(i) a banking company;

(ii) a corresponding new bank;

(iii) a Regional Rural Bank;

(iv) a co-operative bank;

(v) a financial institution;';

(iii) after clause (hh), the following clause shall be inserted, namely:--

'(hha) "financial institution" means any financial insti¬tution within the meaning of clause (c) of section 451 of the Reserve Bank of India Act, 1934 (2 of 1934);

(4) in section 3, after sub-section (1), the following sub-section shall be inserted, namely: --

"(1A) Any reference in this Act to the Deposit Insurance Corporation shall, on and from the date on which Chapter II of the Deposit Insurance Corporation (Amendment and Miscel¬laneous Provisions) Act, 1978, comes into force, be construed as a reference to the Deposit Insurance and Credit Guarantee Corporation.";

(5) in section 4,--

(i) in sub-section (1), for the words "five crores", the words "fifteen crores" shall be substituted;

(ii) in sub-section (2), for the words "authorised capital", the words "issued capital" shall be substituted;

(6) in section 6, in sub-section (1),--

(i) for clause (a), the following clause shall be substituted, namely:--

"(a) the Governor, for the time being, of the Reserve Bank or, if the Reserve Bank, in pursuance of the decision of the Committee of the Central Board of Directors of that Bank, nominates any Deputy Governor for the purpose, the Deputy Governor so nominated, who shall be the Chairman of the Board;";

(ii) after clause (d), the following clause shall be inserted, namely: --

"(e) four directors, nominated by the Central Govern¬ment in consultation with the Reserve Bank, having special knowledge or practical experience in respect of accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law or small-scale industry or any other matter, the special knowledge of, and practical experience in which, is likely, in the opinion of the Central Government, to be useful to the Corporation.";

(7) in section 15,--

(i) in sub-section (I), for the words "with the previous approval of the Central Government, be notified by the Corpo¬ration in the Official Gazette from time to time:", the words "with the previous approval of the Reserve Bank, be notified by the Corporation, from time to time, to the insured banks and different rates may be notified for different categories of insured banks:" shall be substituted;

(ii) in sub-section (3), for the words "not exceeding eight per cent, per annum as may be prescribed", the words "not exceeding eight per cent, over and above the bank rate as may be prescribed" shall be substituted;

(8) after section 15, the following new section shall be inserted, namely:--

"15A, (1) The Corporation may cancel the registration of an insured bank if it fails to pay the premium for three consecutive periods:

Provided that no such registration shall be cancelled except after giving to the concerned bank one month's notice in writing calling upon that bank to pay the amount in default.

(2) The Corporation may restore the registration of a bank whose registration has been cancelled under sub-section (1), if the concerned bank requests the Corporation to restore the regis¬tration and pays all the amounts due by way of premia from the date of default till the date of payment together with interest due thereon on the date of payment:

Provided that the Corporation shall not restore the registra¬tion unless it is satisfied, on an inspection of the concerned bank or otherwise, that it is eligible to be registered as an insured bank.";

(9) after Chapter III, the following Chapter shall be inserted, namely :--

CHAPTER III-A
CREDIT GUARANTEE FUNCTIONS

21A. Guaranteeing of credit facilities and indemnifying credit institutions.--

(1) The Corporation may guarantee credit facilities given by any credit institution and may also indemnify credit institutions in respect of credit facilities granted by them,

(2) The Board may, for the purpose of guaranteeing credit facilities granted by credit institutions or indemnifying credit institutions, frame one or more schemes in such form and in such manner and containing such provisions as the Board may, from time to time, deem fit

(3) The Board may levy, on every credit institution availing itself of the guarantees or indemnities provided by the Corpo¬ration, a fee at such rate or rates as may, with the previous approval of the Reserve Bank, be notified by the Corporation to the credit institutions from time to time and different rates may be notified for different categories of credit institutions, for different types of credit facilities, for different areas where the credit facilities are utilised, or for different categories of bene¬ficiaries of the credit facilities.

Explanation.--"Credit facility" means any financial assistance, including a loan or advance, cash Credit, overdraft, bills purchased or discounted, a term of instalment credit and any guarantee other than a performance guarantee, granted or issued in India by a credit institution at any of its offices in India.

21B. Corporation to act as agent of Central Government.--

The Corporation may act as agent for the Central Government,--

(i) in guaranteeing the due performance by any small-scale industrial concern or other institution or undertaking or categories of institutions or undertakings approved by the Central Government in this behalf, of its, or their, obligations to any credit institution in respect of loans and advances made or other credit facilities provided to it, or them, by such credit institution, and

(ii) in making, as such agent, of payments in connection with such guarantee.';

(10) for section 22 the following section shall be substituted, namely: --

"22. Funds of corporation.--
The Corporation shall maintain three funds, to be called, respectively, the Deposit Insurance Fund, the Credit Guarantee Fund and the General Fund,";

(11) in section 23,--

(i) in sub-section (1) in clause (d) after the words "General Fund", the words "or the Credit Guarantee Fund" shall be inserted;

(ii) in sub-section (2) ,--

(a) in clause (b), the word "and", occurring at the end, shall be omitted;

(b) in clause (c), the word "; and" shall be added at the end;

(c) after clause (c), the following clause shall be inserted, namely: --

"(d) to meet the whole or any part of the liability on account of the depreciation in assets, contributions to staff superannuation and other funds or other expenses incurred or to be incurred by the Corporation, as may be decided by the Board.";

(12) after section 23, the following new section shall be inserted, namely:--

"23A. Credit Guarantee Fund.--

(1) To the Credit Guarantee Fund shall be credited,--

(a) all amounts in the Reserve for unexpired Clearance Risks maintained by the Credit Guarantee Corporation of India Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956), and having its registered office at Bom¬bay;

(b) all amounts received by the Corporation as fees for guarantees and indemnities taken over or given by it;

(c) all amounts received by the Corporation in respect of guarantees and indemnities taken over or given by it;

(d) all amounts transferred to that Fund from the Deposit Insurance Fund or the General Fund under section 27; and

(e) all income arising from the investments made out of that Fund.

(2) The said Fund shall be applied--

(a) to make payments in respect of guarantees and indemnities taken over or issued by the Corporation;

(b) to meet any liability in respect of the amount referred to in clause (d) of sub-section (7); and

(c) to meet the whole or any part of the liability on account of depreciation in assets, contributions to staff and superannuation and other funds, or other expenses incurred or to be incurred by the Corporation, as may be decided by the Board.";

(13) in section 24,--

(i) after the words and figures "of section 23", the words, brackets, figures and letter "or in sub-section (i) of section 23A" shall be inserted; and

(ii) for the words "of that section", the words, figures, brac¬kets and letter, "of section 23, or, as the case may be, sub-section (2) of section 23A" shall be substituted;

(14) in section 25, alter the words "Deposit Insurance Fund", the words "or the Credit Guarantee Fund" shall be inserted;

(15) after section 25, the following new section shall be inserted, namely: --

"25A. Amount in one Fund may be transferred to the other Fund or may be utilised for other purposes.--

Notwithstanding anything contained in this Act, the Board may--

(a) transfer any amount from the Deposit Insurance Fund to the Credit Guarantee Fund or from the Credit Guarantee Fund to the Deposit Insurance Fund, or

(b) utilise any money standing to the credit of either of the said Funds, for such purposes as it may think fit, if it is satisfied that the balance in the Fund, after such transfer or utilization, will be adequate to meet any probable claim on that Fund.";

(16) in section 26, in sub-section (1), after the words "Deposit Insurance Fund", the words "or the Credit Guarantee Fund" shall be inserted;

(17) for section 27, the following section shall be substituted, namely: --

"27. Advances from General Fund to the Deposit Insurance Fund or Credit Guarantee Fund.--

If, at any time, the amount available in the Deposit Insurance Fund or the Credit Guarantee Fund is insufficient to meet the requirements of that Fund, the Corporation may trans¬fer, on such terms and for such period as may be determined by the Board with the approval of the Reserve Bank, from any of the other two Funds, referred to in section 22, such amount as may be necessary to meet the requirements of the Deposit Insur¬ance Fund or the Credit Guarantee Fund, as the case may be.";

(18) section 33 shall be re-numbered as sub-section (1) thereof, and after sub-section (1) as so re-numbered, the following sub-¬section shall be inserted, namely: --

"(2) Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961) the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the period commencing from the first day of January, 1977, and ending with the commencement of the accounting year during which Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act, 1973, comes into force and for four accounting years following that year,";

(19) in section 34, in pub-section (1),--

(i) after the words "an insured bank", the words "or a credit institution" shall be inserted; and

(ii) after the words "deposits in that bank", the words "or the credit facilities granted by that credit institution, as the case may be," shall be inserted;

(20) in section 35,--

(i) in sub-section (1), after the words "insured bank", the words "or a credit institution" shall be inserted; and

(ii) in sub-section (2),--

(a) after the words "insured bank", the words "or credit institution" shall be inserted; and

(b) after the words "the bank", the words "or the credit institution" shall be inserted;

(21) in section 36,--

(i) in sub-section (7), after the words "insured bank", the words "or a credit institution" shall be inserted;

(ii) in sub-section (3), for the words "neither the bank inspected or investigated nor any other bank", the words "neither the bank nor the credit institution, as thecase may be, inspected or investigated, nor any other bank or credit institution" shall be substituted;

(22) in section 38, after the words "insured bank", the words "or a credit institution" shall be inserted;

(23) section 39 shall be re-numbered as sub-section (I) of that section, and after sub-section (1) as so re-numbered, the follow¬ing sub-section shall be inserted, namely: --

"(2) The Corporation shall observe, except as otherwise required by law, the practices and usages customary among the bankers, and, in particular, it shall not divulge any information relating to an insured bank or its customers or a credit institution or us customers except in circumstances in which it is, in accord¬ance with law or practices or usages customary among bankers, necessary or appropriate for the Corporation to divulge such information.";

(24) for section 49, the following section shall be substituted, namely: --

"49. Cognizance and trial of offences.--

(1) Notwithstanding anything contained in the Code of Criminal Procedure. 1973 (2 of 1974), no court shall take cognizance of any offence punishable under this Act except upon a complaint, in writing, made by an officer of the Corporation, generally or specially authorised in writing in this behalf by the Board, and no court, inferior to the Court of a Metropolitan Magistrate or a Judicial Magistrate of the first class, shall try any such offence.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), a Magistrate may, if he sees reason so to do, dispense with the personal attendance of the officer of the Corporation filing the complaint, but the Magistrate may, in his discretion, at any stage of the proceedings, direct the personal attendance of the complainant";

(25) in the First Schedule, for the words "Deposit Insurance Corporation", wherever they occur, the words "Deposit Insurance and Credit Guarantee Corporation" shall be substituted.