For section 15 of the principal Act, the following section shall be substituted, namely:- 

"15.(1) The Small Industries Bank shall, in consultation with the State Government nominate a director as a Chairman of the Board for such period not exceeding three years and on such terms and conditions as the Small Industries Bank may specify:" 

Provided that the Chairman shall not be a whole-time director unless he also appointed to function as the managing director: 

Provided further that the Chairman shall so long as the remains a director be eligible for re-appointment as Chairman. 

(2)The Chairman shall preside over the meetings of the Board and the general meetings of the Financial Corporation.''. 

In section 17 of the principal Act,- 

(a) for sub-section (1), the following sub-section shall be substituted, namely:- 

"(1) The managing director shall- 

(a) be appointed, in consultation with the Small Industries Bank, by the state government; 
(b) be a whole-time officer of the Financial Corporation; 
(c) perform such duties as the Board, by regulations, entrust or delegate to him; 
(d) hold office for such term not exceeding three years as the State Government may specify and shall be eligible for re-appointment; 
(e) receive such salary and allowances and be subject to other terms and conditions of service as the Board may, with the previous approval of the State Government, determine.''; 

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

"(3) Notwithstanding anything contained in sub-section (1), the State Government, with prior consultation of the Small Industries Bank, shall have the right to terminate the term of office of the managing director at any time, before the expiry of the term specified under clause (d) of sub-section (1) by giving him notice of not less than three months in writing of three months salary and allowances in lieu of such notice and the managing director shall also have right to relinquish his office at any time before the expiry of term specified under clause (d) of sub-section (1) by giving to the State Government notice of not less than three months in writing.''. 

For section 18 of the principal Act, the following section shall be substituted, namely:- 

"18. (1) The Board shall constitute an executive Committee consisting of the chairman and managing director, the whole-time directors and such other directors as it may deem fit: 

Provided that in the case of a joint Financial Corporation, if the directors nominated under clause (b) of section 10 represent different State Governments then, all of them shall be members of the Executive Committee. 

(2) The Executive Committee shall discharge  such functions as may be prescribed or as may be delegated to it by the Board. 

(3) The Board may constitute such other committees whether consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons for such purpose or purposes as it may think fit. 

In section 19 of the principal act. Sub-sections (3A) and (4) shall be omitted. 
 
 

In section 23 of the principal Act, the proviso shall be omitted.