Section 18 of The Small Industries Development Bank of India Act, 1989
The Small Industries Bank shall have the right to acquire, by transfer on assignment the rights and interests of any public financial institution as defined in section 4A of the Companies Act, 1956 (1 of 1956) (including any other rights incidental thereto) in relation to any loan or advance granted, or any amount recoverable by such institution, either in whole or in part, by the execution or issue of any instrument or by the transfer of any instrument or in any other manner.
Summary
- The Small Industries Bank has the power to take over rights and interests from other public financial institutions.
- These acquisitions must be related to loans, advances, or amounts that are recoverable by those other institutions.
- The definition of a public financial institution for this specific rule comes from section 4A of the Companies Act, 1956.
- The bank can acquire the whole loan or just a part of it, and does so through an assignment, the execution of an instrument, or other lawful means.
Practical examples
FAQ
1. Can the Small Industries Bank buy or take over loans granted by other institutions?
Yes, it can acquire the rights and interests of any public financial institution in relation to loans or advances granted by them.
2. How does the law decide which institutions the bank can acquire loans from?
The institution must be a public financial institution as defined in section 4A of the Companies Act, 1956.
3. Does the bank have to acquire the entire loan from the other institution?
No, it can acquire the rights and interests either in whole or in part.
Test yourself
Q1.Under Section 18 of The Small Industries Development Bank of India Act, 1989, which outside law provides the definition of a "public financial institution" from which the Small Industries Bank can acquire rights?
Q2.Under Section 18 of The Small Industries Development Bank of India Act, 1989, what specific items is the Small Industries Bank empowered to acquire from a public financial institution?
Q3.Under Section 18 of The Small Industries Development Bank of India Act, 1989, what is a condition regarding the proportion of rights and interests the bank can acquire from another institution?
Q4.Under Section 18 and Section 4A of The Small Industries Development Bank of India Act, 1989, how does the reference to "Section 4A" differ in its application within the Act?