REGULATIONS OF SUBSCRIBED CAPITAL, PAID-UP CAPITAL AND VOTING RIGHTS [S.12] - BEST BANKING LAW NOTES ONLY ON LAWKARO
CAPITAL REQUIREMENT UNDER BANKING LAW (SUB-S. (1))
If a bank company does not meet the following conditions, it is prohibited from carrying on a business.
SUBSCRIBED CAPITAL IN BANKING LAW - BANKING LAW STUDY NOTES
The company's subscribed capital must not be less than one-half the authorised capital, and the paid up capital cannot be lower than one-half the subscribed capital. The Reserve Bank may permit capital increases to comply with this requirement. However, they must be completed within two years. The capital must be a mix of equity and ordinary shares. These preferential shares may be kept as if they were issued before the first day in July 1944. These requirements do not apply to banks established before the 15th of January 1937.
VOTING RIGHTS [SUB. (2)]
Persons who hold shares in a bank company are not allowed to vote on their shareholdings if they exceed 10% of the total voting rights of all shareholders.
PROTECTION OF SHAREHOLDER FROM TITLE [SUB. (3)]
Any person registered as a holder of shares in a bank company cannot be sued or brought into any other proceeding because the title to those shares belongs to someone other than the registered owner. This immunity is applicable regardless of any law in force at the time or any contract or instrument. If he obtained a transfer from the registered owner following the law applicable to such transfer, this sub-section doesn't bar him from bringing suit or proceeding. This subsection does not prohibit a suit or proceeding for a minor or lunatic claiming that the registered owner holds shares in his name.
DISCLOSURE BY THE CHAIRMAN, MANAGING DIRECTOR, CHIEF EXECUTIVE OFFICER (SUB-S. (4))
Any chairman, managing director, or chief executive officer of any banking company must provide to the Reserve Bank through company returns full details of the amount and value of his shareholding. The Reserve Bank can also request any other information required to be disclosed. The Reserve Bank may also determine the time and form of disclosure.
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