MINISTRY OF FINANCE

(Department of Economic Affairs)

(Banking Division)

NOTIFICATION

New Delhi, the 22nd January, 2002

s.o.90(E).— in exercise of the powers conferred by sub-section (2) of

Section 45 of the .Banking Regulation Act, 1949 (10 of 1949), the Central

Government, after considering an application made by the Reserve Bank of

India under Sub-section (1) of that Section hereby makes an Order of

Moratorium in respect of the Benares State Bank Ltd., for the period from

the close of business on the 22nd January, 2002 upto and inclusive of the

21st April, 2002 and hereby stays the commencement or continuance of all

actions and proceedings against that banking company during the period of

moratorium, subject to the condition that such stay shall not in any manner

prejudice the exercise by the Central Government of its powers under clause

(b) of Sub-section (4) of Section 35 of the said Act or the exercise by the

Reserve Bank of India of its powers under Section 38 of the said Act.

THE GAZETTE OF INDIA : EXTRAORDINARY

PARTII—SBC.3(ii)1

The Central Government hereby also directs that during the period of

moratorium, the Benares State Bank Ltd., shall not, without the permission

in writing of the Reserve Bank of India-

(a)

grant any loan or advance, incur any liability, make any

investment or agree to or disburse any payment, whether in discharge

of-its liabilities and obligations or otherwise, or enter into any

compromise or arrangement, except to the extent and in the manner

provided hereunder:

(i)

payment of a sum not exceeding Rs.2,500/- of the total

balance in every savings bank or current account or any other

deposit by whatever name called, provided that no amount shall

be paid to any depositor who is indebted to the bank in any

way;

(ii)

incurring expenditure which has necessarily to be

incurred in connection with any suits or appeals filed by or

against or decrees obtained by the said bank or for realising any

amounts due to it, provided that if the expenditure in respect of

each such suit or appeal or decree or proceeding is in excess of

Rs.2,500/-, the permission in writing of the Reserve Bank of

India shall be obtained before it is incurred;

(iii)

incurring expenditure on any other item in so far as it is

in the opinion of the banking company necessary for carrying

on the day-to-day administration of the banking company,

provided that where the total expenditure on any item in any

calendar month exceeds the average monthly expenditure on

account of that item during the six calendar months preceding

the Order of Moratorium, or if no expenditure has been incurred

on account of that item in the past exceeds a sum of Rs.2,500/-,

the permission in writing of the Reserve Bank of India shall be

obtained before the additional expenditure,is incurred;

(iv)

payment of the amounts of any drafts or pay Orders

issued by the said bank and remaining unpaid on the date on

which the Order of Moratorium comes into force; and

(v)

the amounts of the bills received for collection on or

before the

22^nd January, 2002 and realised before, on or after

that date.

(b)

sell, transfer or otherwise dispose of any of its immovable

properties.

The Central Government hereby also directs that the Benares State

Bank Ltd., may, during the period of the moratorium granted to it, make the

following further payments, namely, the amounts for repaying loans or

advances granted against Government securities or other securities, to the

Benares State Bank Ltd., by the Reserve Bank of India or the State Bank of

India or any of its subsidiaries or by any other bank and remaining unpaid on

the date on which the Order of Moratorium comes into force.

The Central Government hereby further directs that during the period

of moratorium the Benares State Bank Ltd., shall be permitted to operate its

accounts with the Reserve Bank of India or with any other bank for the

purpose of making the payments aforesaid, provided that nothing in this

Order shall be deemed to require the Reserve Bank of India or any other

bank aforesaid to satisfy itself that the conditions imposed by this Order are

being observed before any amounts are released in favour of the Benares

Bank Ltd.

The Central Government hereby further directs that the Benares State

Bank Ltd., may, during the period of moratorium, return any bills which

have remained unrealised to the persons entitled to receive them on a request

being made in this behalf by such persons, if the bank has no right or title to,

or interest in, such bills.

The Central Government hereby also directs that the Benares State

Bank Ltd., may, release or deliver goods or securities which have been

pledged, hypothecated or mortgaged or otherwise charged to it against any

loan, cash credit or overdraft:

(i)

in any case in which full payment towards all the amounts due

from the borrower or borrowers, as the case may be, has been received

by the bank, unconditionally, and

(ii)

in any other case, to such an extent as may be necessary or

possible, without reducing the proportions of the margins on the said

goods or securities below the stipulated proportions or the proportions

which were maintained before the Order of moratorium came into

force, whichever may be higher.

[F.No-15/2/2000-BOA]

SHEKHARAGARWAL,Jt Secy.

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