Section 3 of The National Bank for Agriculture and Rural Development Act, 1981
- (1)With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be established for the purposes of this Act, a bank to be known as the National Bank for Agriculture and Rural Development.
- (2)The Bank shall be a body corporate with the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may by that name sue and be sued.
- (3)The head office of the National Bank shall be at 1[Mumbai] or at such other place as the Central Government may, by notification, specify.
- (4)The National Bank may establish offices, branches or agencies at any place in India, and with the previous approval of the Central Government and in consultation with the Reserve Bank, at any place outside India.
Summary
- The Central Government establishes the National Bank by issuing a notification in the Official Gazette.
- The bank is a body corporate (a legally recognized organization that acts like a single person), which means it has perpetual succession (it continues to exist even if leadership changes) and an official common seal.
- The bank has the legal power to acquire, hold, and sell property, and it can sue or be sued in its own name.
- The main head office of the bank must be located in Mumbai, unless the Central Government specifies a different place.
- The bank can open branches anywhere in India, but opening a branch outside of India requires prior permission from the Central Government and consultation with the Reserve Bank.
Practical examples
FAQ
1. Who creates the National Bank?
The Central Government creates it by publishing a notification in the Official Gazette.
2. Can the National Bank own real estate?
Yes, as a body corporate, it has the legal power to acquire, hold, and dispose of property.
3. Where is the bank's headquarters?
The head office is in Mumbai, though the Central Government has the power to specify another location if it chooses.
Test yourself
Q1.Under Section 3 of The National Bank for Agriculture and Rural Development Act, 1981, what legal characteristic ensures the bank continues to exist even if its entire leadership is replaced?
Q2.Under Section 3 of The National Bank for Agriculture and Rural Development Act, 1981, what permission is required before the bank can establish a new branch outside of India?
Q3.Under Section 3 of The National Bank for Agriculture and Rural Development Act, 1981, where is the head office of the National Bank located by default?
Q4.Under Section 3 of The National Bank for Agriculture and Rural Development Act, 1981, how does the National Bank officially sign important legal contracts?