Section 45 of The National Bank for Agriculture and Rural Development Act, 1981
The National Bank shall establish a Reserve Fund 1[and other Funds] as the Board may consider necessary by transferring such sums as it may deem fit, out of its annual profits and out of receipts from gifts, grants, donations or benefactions, which it may receive.
Summary
- The National Bank must establish a Reserve Fund.
- The National Bank can also establish other Funds as the Board considers necessary.
- Money is transferred into these funds from the bank's annual profits.
- Money can also be transferred into these funds from receipts of gifts, grants, donations, or benefactions.
- The Board decides the specific sums that are fit to transfer into these funds.
Practical examples
FAQ
1. Is the National Bank limited to having only a Reserve Fund?
No, the Board can establish a Reserve Fund and other Funds as it considers necessary.
2. Where does the money for the Reserve Fund and other Funds come from?
The money is transferred from the bank's annual profits and from receipts from gifts, grants, donations, or benefactions.
3. Who decides how much money goes into these funds?
The Board transfers such sums as it deems fit.
Test yourself
Q1.Under Section 45 of The National Bank for Agriculture and Rural Development Act, 1981, who decides if "other Funds" besides the Reserve Fund are necessary?
Q2.Under Section 45 of The National Bank for Agriculture and Rural Development Act, 1981, which of the following is a designated source of money for the Reserve Fund?
Q3.Under Section 45 of The National Bank for Agriculture and Rural Development Act, 1981, what type of outside receipts can be transferred into these funds?
Q4.Under Section 45 of The National Bank for Agriculture and Rural Development Act, 1981, how are the sums transferred into the Reserve Fund determined?