Section 5 of The Small Industries Development Bank of India Act, 1989
1[5. Management.(1) The general superintendence, direction and management of affairs and business of the Small Industries Bank shall vest in a Board of Directors which may exercise all powers and do all such acts and things as may be exercised or done by the Small Industries Bank and are not by this Act expressly directed or required to be done by the Small Industries Bank in general meeting.
- (2)The Board may direct that any power exercisable by it under this Act shall also be exercisable in such cases and subject to such conditions, if any, as may be specified by it, by the chairman and managing director or the whole-time directors.
- (3)Subject to the provisions of this Act, the Board in discharging its functions shall act on business principles with due regard to public interest.]
Summary
- The general direction and daily management of the Bank are handled by a Board of Directors.
- The Board has the power to do anything the Bank is legally allowed to do, as long as the Act does not strictly require that action to be done by the shareholders in a general meeting.
- The Board can delegate its powers, directing that certain powers be exercisable by the chairman and managing director, or by the whole-time directors, subject to specific conditions.
- When making decisions, the Board must operate on strong business principles while also making sure they consider the public interest.
Practical examples
FAQ
1. Who is in charge of running the Small Industries Bank?
A Board of Directors has the general superintendence, direction, and management over the affairs and business of the Bank.
2. Can the Board let one person handle some of its duties?
Yes, the Board can direct that its powers be exercisable by the chairman and managing director or the whole-time directors.
3. What guiding principles must the Board follow when making decisions?
The Board must act on business principles with due regard to public interest.
Test yourself
Q1.Under Section 5 of The Small Industries Development Bank of India Act, 1989, where does the general superintendence, direction, and management of the Bank's affairs vest?
Q2.Under Section 5 of The Small Industries Development Bank of India Act, 1989, to whom may the Board direct that its powers be exercisable?
Q3.Under Section 5 of The Small Industries Development Bank of India Act, 1989, what limit exists on the powers the Board can exercise or the acts it can do?
Q4.Under Section 5 of The Small Industries Development Bank of India Act, 1989, the Board may delegate powers to the chairman and managing director. According to Section 6 of the Act, who appoints this chairman and managing director?