Section 26 of The National Bank for Agriculture and Rural Development Act, 1981
1[26. Purchase and sale of shares.-- The National Bank may subscribe to, or purchase or sell stocks, shares, bonds or debentures of, or invest in the securities of, any institution or class of institutions concerned with agriculture and rural development which the Board may approve subject to such terms and conditions as it may deem fit.]
Summary
- The bank can invest money directly into organisations that work on farming and rural development.
- It is allowed to buy stocks, shares, bonds, or debentures of these organisations.
- It can also sell these investments later.
- The Board of Directors must approve the specific institutions and the terms of the investments.
Practical examples
FAQ
1. Can the bank buy shares in any company it wants?
No, the company or institution must be concerned with agriculture and rural development, and the Board must approve it.
2. Does the bank only buy shares?
No, it can also buy stocks, bonds, debentures, and other securities, and it is allowed to sell them too.
3. Who decides the rules for buying these shares?
The Board approves the terms and conditions for these investments.
Test yourself
Q1.Under Section 26 of The National Bank for Agriculture and Rural Development Act, 1981, who must approve the institutions that the bank invests in?
Q2.Under Section 26 of The National Bank for Agriculture and Rural Development Act, 1981, which of the following is an action the bank is explicitly permitted to take?
Q3.Under Section 26 of The National Bank for Agriculture and Rural Development Act, 1981, the institutions the bank buys shares in must be concerned with what?
Q4.Under Section 26 of The National Bank for Agriculture and Rural Development Act, 1981, what can the bank do with the shares and bonds once it has purchased them?