TRANSFER OF BUSINESS, PROPERTIES, ASSETS AND LIABILITES

 On and from the appointed date, all the undertaking within or outside India of the
transferor bank will vest in the transferee bank including all assets, borrowing, liabilities,
duties and obligation along with charges, encumbrance, lien or security in relation to the
undertaking.
 Unless expressly mentioned in the scheme, all contracts, deeds, bond or other instruments
which are already subsisting or come into effect before the appointed date in favour or
against of the transferee bank and no consent of the third party or person party to the
instrument is required.
 On the appointed date, if any suit, decrees, appeals or any other proceeding is pending by
or against the transferor bank before any tribunal or court, it will be enforced and
prosecuted by or against the transferee bank.
Along with this any contravention of any statute or any criminal proceeding is instituted
against any director, secretary or manager, employee of the transferor bank will stand still
and liable to be punished as if transferor bank is not amalgamated.
 Any security interest created in favor of or for the benefit of the transferor bank without
any act, deed, instrument thing be transferred and vested in the transferee bank and come
into effect completely without obtaining any consent of any person. Along with this all
the incentives, subsidies, exemption and other benefits availed by the transferor bank will
made available to the transferee bank.

Closure of books of the transferor bank and preparation of balance sheet:

 Books of the transferor bank be closed & balanced and balance sheet be prepared, audited
and certified once at the close of business on November 22, 2021 and after the date
immediately preceding the appointed date.
 Along with this, copy of the balance sheet prepared by transferor bank be filed by
transferee bank with the Central Registrar of Cooperative Societies and thereafter
transferor bank is not required to maintain any balance sheet or P&L A/C or hold any
board meeting or comply with any provision of the statue.
Valuation of assets and determination of liabilities
 The transferee bank shall value the assets and calculate the liabilities of the transferor
bank accordingly:
 Investments other than Government Securities shall be valued at the market
rates prevailing on the day immediately preceding the appointed date and
Government Securities will be valued according to Reserve Bank Guidelines.
 Securities of the Central Government will be valued at their face value or
encashable value on the said date, whichever is higher.
 Government security held by transferor bank whose principal is payable in
installments is not ascertainable is valued at such amount which is considered
to be reasonable along with interest.
 Any security, share, debenture or other investment market value is not
reasonable, it will be valued on the basis of its average market value & if
 market value of the said investments is not ascertainable, reasonable value
will be considered.
 Premises, all immovable property and any asset acquired in claims be valued
at their market value.
 Furniture, fixtures, stationery or other assets be valued ar written down value
or realizable value whichever is reasonable.
 All advances, bills, book debts or all intangible/tangible assets and securities
will be scrutinized and examined respectively by the transferee bank.
Advsnces will be classified into two categories i.e., advances as good and
readily realizable and advances bad or not readily realizable.
 Asset A/C will be opened by the transferee bank on the appointed date which
will be credited by the aggregate amount of the readily realizable asset.
 If valuation of asset is not determined, with the permission of RBI, it will be
realizable later. Secondly, In case of any disagreement, the matter will be
decided by RBI until then the valuation of item be provisionally adopted by
the transferee bank. Thirdly, the cost of obtaining advice be payable out of
assets of the transferor bank.
 Liabilities of all kind will be meet by the transferee bank resources and the
measurement basis will be decided by the RBI and it will include all the
measurement basis.
 The valuation of the assets and determination of the liabilities will be binding
on all including members and creditors of both the banks.
PAYMENT TO CREDITORS AND DEPOSITORS
 If any employee of the transferor bank has deposited any sum along with interest accrued
upto the appointed date in the bank as staff security deposits shall be paid in case the
employee has chosen not to continue in the services of the transferee bank.
 Every saving or current account or any other deposit accounts with the transferor bank,
the transferee bank will open and credit the full amount including interest accrued till
March 31, 2021 in the similar and corresponding account in the name of respective
holders.
Provided that if transferee bank have any reasonable doubt about the correctness of the
entries made in any particular account, it may with the permission of the Reserve Bank of
India, withhold the credit up to 3 months.
 The transferee bank will pay from the amount received from Deposit Insurance and
Credit Guarantee Corporation (DICGC) to all the eligible depositors of the transferor
bank. The amount would be equal to the balance in their deposit accounts or Rs.
5,00,000, whichever is less.
 The transferee bank will pay to the retail depositors of the transferor bank at the end of
two years, an additional amount equal to the balance in their deposit account or Rs.
50,000, whichever is less above the payment already made.
 The transferee bank will pay to the retail depositors of the transferor bank at the end of
three years, an additional amount equal to the balance in their deposit account or Rs.
1,00,000, whichever is less above the payment already made.
 The transferee bank will pay to the retail depositors of the transferor bank at the end of
four years, an additional amount equal to the balance in their deposit account or Rs.
3,00,000, whichever is less above the payment already made.
 The transferee bank will pay to the retail depositors of the transferor bank at the end of
five years, an additional amount equal to the balance in their deposit account or Rs.
5,50,000, whichever is less above the payment already made.
 The transferee bank will pay entire remaining amount of deposits (after making payment
of the above said amounts) after 10 years from the appointed date.
 No interest should accrue after March 31, 2021 on any of the interest bearing deposits
with the transferor bank.
No interest payable on interest bearing deposits for a period of 5 years. No interest
payable if there is any balance in Current A/C or Non-Interest bearing A/C.
Interest at the rate of 2.75% per annum will be payable on the retail deposits of the
transferor bank after 5 years from the appointed date.
 80% of the uninsured deposits outstanding to the credit of each institutional depositor of
the transferor bank shall be converted into Perpetual Non- Cumulative Preference Shares
(PNCPS) of the transferee bank along with dividend of 1% per annum annually and
remaining 20% amount of the institutional deposits will be converted into equity warrants
at Rs.1 per warrant. Further equity warrants will be converted into equity shares at IPO at
lower band of the IPO price.
 Transferee bank will only pay the principal amounts when they fall due to the creditors
according to the terms of the agreement entered prior to the appointed date or T&C
agreed upon.
 To meet the liabilities, credit balance in the “asset account” will be appropriated and
balance is not sufficient then it will be treated as amount spent by the transferee bank.

DICGS SUPPORT FOR THE PROCESS OF AMALGAMATION

 DICGC in accordance with the provisions of the DICGC Act, 1961 and regulation to the
transferee bank the amount which is due to the eligible depositors of the transferor bank.
 The transferee bank have time upto 20 years from the appointed date, to repay the amount
received from the DICGC for the payment to the insured depositors may be in one
installment or several. Along with this, transferee bank will created reserve A/C in its
books or make periodical transfer in order to discharge its liability towards DICGC.

RIGHTS AND LIABLITIES OF THE MEMBERS AND CREDITORS OF THE

TRANSFEROR BANK
 On and from the appointed date-
 Entire amount of the paid-up capital and reserve & surplus of the transferor bank will be
written off and also entire amount outstanding of the transferor bank in the Long term
deposits will be converted into PNCPS and treated according to clause 6(1)(e) of the
scheme and also transferor bank will be cease to exist by operation of the scheme.

RIGHTS AND OBLIGATIONS OF THE EMPLOYEE OF THE TRANSFEROR

BANK
 From the appointed date, all the employees of the transferor bank shall continue in
service on the same remuneration and T&C for a period of 3 years.
Provided that before the expiry of one month following the appointed date the employees
of the transferor bank by notice in writing had informed to the transferor bank or
transferee bank for their not becoming employees will be entitle to get paid for
compensation, pension, gratuity, PF or other retirement benefits admissible under the
rules of transferor bank.
Provided that transferee bank may discontinue the services of Key Managerial Personnel
(According to Companies Act and any dispute will refer to RBI which is final and
binding) of the transferor bank after following the due procedure and providing them
compensation as per the terms of their employment.
 Till the expiry period of 3 years, the transferee bank shall pay and grant to the employees
the same remuneration and same T&C of services as applicable to the other employees of
corresponding rank or status subject to qualifications and experience of said employee be
same or equivalent to other employees of transferee bank.
 Employees of the transferor bank who are deemed to be appointed as employees of the
transferee bank are also deemed to be taken over the liabilities for them of retrenchment
compensation in the event of their being retrenched being in the services of the transferee
bank, being their services is continuous and not interrupted due to transfer.
 For the benefit of the employees of the transferor bank, all the money and investment will
be transferred to the trustees of employee provident fund and gratuity fund by the
transferor bank. But trustees not be liable for any deficiency in the value of investment or
any act, neglect or default done before commencement of scheme.

MISCELLANEOUS
 Except to the extent in the scheme, no depositor or creditors of the transferor bank is
entitle to make demand in respect of liability to the transferor bank or transferee bank.
 No legal proceeding lie against Central Government, Reserve Bank, Transferee bank or
Transferor Bank for act done in good faith or in pursuance to the scheme.
 Transferee bank can merge branches of the transferor bank according to its own
convenience or close down or shift the existing branches as per instructions issued by
RBI.
 According to the requirement by the RBI, transferee bank will furnish statement and
Information regarding implementation of the scheme.
 Any notice or communication given by the transferee bank will be considered to be duly
given if addressed and sent by speed post or by courier or by pre-paid post or by e-mail
mentioned in the books of the transferor bank until registered in the books of the
transferee bank. Any notice or communication in the public interest be advertised in one
or more daily newspaper which is in circulation at the places where the registered office
of the transferor bank located.
 Views of RBI is final and binding in case of interpretation of the provision of the scheme.