25. Composition of the Board of Directors.- (1) Subject to the provisions of sub-section (2), the Board of Directors of a subsidiary bank shall consist of the following:--
*[(a) the Chairman for the time being of the State Bank, ex officio or an official of the State Bank or of the subsidiary bank nominated by him as Chairman, with the approval of the Reserve Bank;]
(aa) the managing director appointed under sub-section (1) of section 29, or under section 32;
*[(b) one director, possessing necessary expertise and experience in the matters relating to regulation or supervision of commercial banks, to be nominated by the Reserve Bank;]
(c) not more than five directors to be nominated by the State Bank of whom not more than three shall be officers of that bank;
Provided that any nomination of a director made by the State Bank under this clause shall, except in so far as it relates to an office of that bank, be in consultation with the Central Government.
(ca) one director, from among the employees of the subsidiary bank, who are workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act;
(cb) one director, from among such of the employees of the subsidiary bank as are not workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act;
*[(d) not more than three directors to be elected in the following manner, namely:-
(i) if the total amount of holdings of the shareholders (other than the State Bank) of a subsidiary bank is more than one per cent. of the total issued capital, and equal to or less than sixteen per cent. of such capital, one director to be elected, in the prescribed manner, by such shareholders and two directors shall be nominated by the State Bank, or
(ii) if the total amount of holdings of the shareholders (other than the State Bank) of a subsidiary bank is more than sixteen per cent. of the total issued capital and equal to or less than thirty-two per cent. of such capital, two directors to be elected in the prescribed manner by such shareholders and one director shall be nominated by the State Bank, or
(iii) if the total amount of holdings of the shareholders (other than the State Bank) of a subsidiary bank is more than thirty-two per cent. of the total issued capital, all the three directors to be elected, in the prescribed manner, by such shareholders:
Provided that in case, the total amount of holdings of the shareholders of a subsidiary bank (other than the State Bank) is not more than one per cent. of the total issued capital, all three directors shall be nominated by the State Bank and such directors shall, for the purposes of this Act, be deemed to be directors elected under this clause.
Explanation.-For the purposes of this sub-section, the total amount of holdings of the shareholders (other than the State Bank) whose names are on the register of shareholders of the subsidiary bank three months before the date fixed for election of directors shall be taken into account.]
(e) a director, if any to be nominated by the Central Government
(2) Notwithstanding anything contained in clause (d) of sub-section (1), on the first constitution of the Board of Directors, the directors referred to in the said clause shall be appointed by the State Bank and the directors so appointed shall, for the purposes of this Act, be deemed to have been elected within the meaning of the said clause.
(3) Omitted by State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007
*[(4) An officer of the State Bank may be nominated as a director of a subsidiary bank by virtue of his office.]
(5) The directors nominated under sub-section (2) shall retire at the expiry of one year after the appointed day.
(6) Any nomination or appointment of a director made by the State Bank under this Act shall, except in so far it relates to an officer of that bank, be in consultation with the Reserve Bank.
*[Substituted by State Bank of India (Subsidiary Banks Laws) Amendment Act, 2007]
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