1[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:
2[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--
3[(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) 4[whose term of office as a person managing the company is] for a period exceeding five years at any one time:
5[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 or 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 expenses actually incurred by him in the performance of his duties.
(2) In forming its opinion under sub-clause (iii) of clause (b) 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.
6[7* * * * *
(6) Any decision or order of the Reserve Bank made under this section shall be final for all purposes.]]
1Subs. by Act 95 of 1956, s. 2, for section 10 (w.e.f. 14-1-1957).
2Subs. by Act 33 of 1959, s. 6, for the proviso (w.e.f. 1-10-1959).
3Subs. by s. 6, ibid., for sub-clause (i) (w.e.f. 1-10-1959).
4Subs. by Act 55 of 1963, s. 8, for "who has a contract with the company for its management" (w.e.f. 1-2-1964).
5Subs. by s. 8, ibid., for the first proviso (w.e.f. 1-2-1964).
6Subs. by Act 33 of 1959, s. 6, for sub-section (3) (w.e.f. 1-10-1959).
7Omitted by Act 55 of 1963, s. 8 (w.e.f. 1-2-1964).