ESTABLISHMENT OF THE SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA AND CAPITAL THEREOFCentral

Section 3 of The Small Industries Development Bank of India Act, 1989

Establishment and incorporation of Small Industries Development Bank of India.

(1)With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a corporation to be known as the Small Industries Development Bank of India.
(2)The Small Industries 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 or be sued.
(3)The head office of the Small Industries Bank shall be at Lucknow or at such other place as the Central Government may, by notification, specify.
(4)The Small Industries Bank shall establish offices, branches or agencies at any place in or outside India.

Summary

Officially establishes the Small Industries Development Bank of India as a legal corporation.
Gives the bank its own legal identity, meaning it can own property, make contracts, and sue or be sued in its own name.
Sets the main head office of the bank in Lucknow, unless the Central Government decides to move it somewhere else.
Allows the bank to set up other offices, branches, or agencies anywhere inside or outside of India.

Practical examples

1The Small Industries Bank signs a lease to open a branch inside a commercial building in London. This is perfectly legal because the law allows the bank to establish branches outside India and make contracts in its own name.

2A contractor feels they were not paid fairly by the bank for building renovations. The contractor files a lawsuit naming the Small Industries Development Bank of India as the defendant, which is allowed because the bank is a corporate body that can be sued.

FAQ

1. Is the Small Industries Bank legally separate from the government?

Yes, it is established as a body corporate with a common seal and perpetual succession, giving it its own independent legal status.

2. Where is the main headquarters of the bank located?

The head office is in Lucknow, but the Central Government can change this by issuing a notification.

3. Can the bank buy and sell real estate?

Yes, as a body corporate, it has the specific power to acquire, hold, and dispose of property.

Test yourself

1.Under Section 3 of The Small Industries Development Bank of India Act, 1989, what legal status does the Small Industries Bank have?

2.Where does Section 3 of The Small Industries Development Bank of India Act, 1989 place the default head office of the Small Industries Bank?

3.Under Section 3 of The Small Industries Development Bank of India Act, 1989, who has the power to specify a different location for the bank's head office?

4.According to Section 3 of The Small Industries Development Bank of India Act, 1989, where is the bank permitted to establish its branches?

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