TRANSFER AND VESTING OF THE UNDERTAKING OF RECONSTRUCTION BANK IN COMPANYCentral
Section 3 of The Industrial Reconstruction Bank (Transfer of Undertakings and Repeal) Act, 1997
On such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be transferred to, and vest in, the Company, the undertakings of Reconstruction Bank.
Summary
- On the appointed date, the undertakings of the Reconstruction Bank are transferred to the Company.
- On this same appointed date, the undertakings vest in, meaning they officially become the property of, the Company.
- The transfer is triggered by the Central Government appointing a date by notification in the Official Gazette.
Practical examples
1On the designated transfer date of 27th March, 1997, a borrower named Sunil found that his active loan of 50,000 rupees was transferred from the old Reconstruction Bank to the new Company. Sunil now has to make his monthly interest payments to the new Company instead of the old bank.
2A real estate manager named Meera, who managed a commercial office building leased by the old bank, saw that on the transfer day, the lease of the building instantly vested in the new Company, making the new Company her new tenant.
FAQ
1. Who has the authority to appoint the date for the transfer of undertakings?
The Central Government has the authority to appoint this date.
2. How must the Central Government announce the appointed date?
The Central Government must announce it by notification in the Official Gazette.
3. What actually happens to the Reconstruction Bank's undertakings on the appointed date?
They are officially transferred to and vest in the Company.
Test yourself
Q1.What happens to the undertakings of the Reconstruction Bank on the appointed date?
Q2.Where must the notification of the appointed date be published?
Q3.Which entity's undertakings are transferred under Section 3?
Q4.Who is responsible for appointing the transfer date?
Q5.Under which Chapter is Section 3 located?