Section 16 of The Small Industries Development Bank of India Act, 1989
1[16. Investment.-- The Small Industries Bank may invest (whether by way of deposits in banks or otherwise) the amounts available in the Small Industries Development Assistance Fund or the Small Industries General Fund or any other fund or account which are not for the time being required for the transaction of business in such manner as may be approved by the Board.]
Summary
- The Small Industries Bank has the authority to invest its available funds.
- It can invest money from the Small Industries Development Assistance Fund, the Small Industries General Fund, or any other account it holds.
- The bank is only allowed to invest amounts that are not currently needed for its daily business transactions.
- The way the money is invested, such as by depositing it in banks or other methods, must be approved by the Board.
Practical examples
FAQ
1. Can the bank invest money that it needs to use for giving out loans tomorrow?
No, the bank can only invest amounts that are not for the time being required for the transaction of business.
2. Who decides exactly how the surplus money should be invested?
The manner of investment, such as whether to put it in bank deposits or use other methods, must be approved by the Board.
3. Are there specific funds mentioned that the bank can invest from?
Yes, the law specifically mentions the Small Industries Development Assistance Fund and the Small Industries General Fund, along with any other fund or account.
Test yourself
Q1.Under Section 16 of The Small Industries Development Bank of India Act, 1989, what is the core condition for the Small Industries Bank to invest amounts available in its funds?
Q2.Under Section 16 of The Small Industries Development Bank of India Act, 1989, who holds the authority to approve the manner in which the Small Industries Bank invests its available funds?
Q3.Under Section 16 of The Small Industries Development Bank of India Act, 1989, which of the following is specifically named as a fund from which amounts can be invested?
Q4.Under Section 16 of The Small Industries Development Bank of India Act, 1989, what specific method of investment is explicitly mentioned as an example in the text?