THE STATE FINANCIAL CORPORATIONS (AMENDMENT) ACT,2000
Amendment of section 35

In section 35 of the principal Act, in sub-section (2), the proviso shall be omitted. 

Substitution of new section for section 35 A

For section 35A of the principal Act, the following section shall be substituted, namely:- 

"35A. (1) The Financial Corporation may establish a special reserve fund, to which shall be transferred such portion of the dividends accruing to the State government, Development Bank and the Small Industries Bank on the shares of the Financial Corporation as maybe fixed by agreement between the State Government, Development Bank and the Small Industries Bank: 

Provided that after the notified date this sub-section shall have effect as if for the words  "the State Government, the Development Bank and the Small Industries Bank'', the words "the State Government and the Small Industries Bank'' have been substituted except as regards all dividends accruing in respect of any completed accounting period prior to the notified date. 

(2) No shareholder of  the Financial Corporation, other than the State Government or the Small Industries Bank, shall have any claim to the special reserve fund. 

(3) The amount standing to the credit of the special reserve fund may be utilised by the Financial Corporation for only such purposes as are approved by the State Government and the Small Industries Bank.'' 


Amendment of section 36

In section 36 of the principal Act, for sub-section (2), the following sub-sections shall be substituted, namely:- 

"(2) The shareholders present at the annual general meeting shall be entitled to discuss and adopt- 
(a) the  balance-sheet and profit and loss account of the Financial Corporation made up to the date on which its accounts are closed and balanced; 

(b) the report of working of the Financial Corporation for the period covered by the accounts; 

(c) the auditor's report on the balance-sheet and accounts; and 

(d) proposals for declaration of dividend and capitalisation of reserves. 

(3) The shareholders present at an annual general meeting may also discuss any other matter to be transacted at such meetings in accordance with the provisions of this Act.''. 


Amendment of section 37

In section 37 of the principal Act,- 

(a) for sub-section (1), the following sub-section shall be substituted, namely:- 
"(1) The accounts of the Financial Corporation shall be audited by auditors duly qualified to act as the auditors under sub-section (1) of section 226 of the Companies Act, 1956, who shall be appointed by the Financial Corporation in general meeting of shareholders out of the panel of auditors approved by the Reserve Bank of India for such terms and on such remuneration as the Reserve Bank may fix.''; 
(b) In sub-section (6), the proviso shall be omitted. 


Amendment of section 37 A

In section 37A of the principal Act, for the words ``Devepment Bank'', wherever they occur, the words "Small Industries Bank'' shall be substituted. 

Amendment of section 38

In section 38 of the principal Act, for the words "Development Bank'', wherever they occur, the words "Small Industries Bank'' shall be substituted' 

Amendment of section 39

In section 39 of the principal Act, -

(a) in sub-section (1), for the words "Development Bank", the words "Small Industries Bank" shall be substituted;

(b) after sub-section (2), the following sub-section shall be inserted, namely:- 

"(2A) Nothing contained in sub-section (1) and sub-section (2) shall apply in a case where a State Government holds less than fifty-one per cent. of the equity shares in the Financial Corporation. 

(2B) Notwithstanding the equity share holding of a Financial Corporation by a State Government, the State Government, the State government may advise the Financial Corporations on the matters of policy.''. 


Amendment of section 40

In section 40 of the principal Act, in sub-section (2), in clause (b), for the words ``State Cooperative Bank or the Development Bank'', the words "State Co-operative Bank, the Small Industries Bank or the Development Bank'' shall be substituted.