6. Payment of amount.—
(1) Every existing bank shall be given by the Central Government such
amount in respect of the transfer, under section 4, to the corresponding new bank of the undertaking of the
existing bank as is specified against each such bank in the Second Schedule.
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(2) The amount referred to in sub-section
(1) shall be given to every existing bank, at its option,—
(a) in cash (to be paid by cheque drawn on the Reserve Bank) in three equal annual instalments,
the amount of each instalment carrying interest at the rate of five and a half per cent. per annum from
the commencement of this Act; or
(b) in saleable or otherwise transferable promissory notes or stock certificates of the Central
Government issued and repayable at par, and maturing at the end of—
(i) ten years from the commencement of this Act and carrying interest from such
commencement at the rate of six per cent. per annum, or
(ii) thirty years from the commencement of this Act and carrying interest from such
commencement at the rate of seven per cent. per annum; or
(c) partly in cash (to be paid by cheque drawn on the Reserve Bank) and partly in such number of
securities specified in sub-clause
(i) or sub-clause (ii), or both, of clause
(b), as may be required by
the existing bank; or
(d) partly in such number of securities specified in sub-clause
(i) of clause
(b) and partly in such
number of securities specified in sub-clause (ii) of that clause, as may be required by the existing
bank.
(3) The first of the three equal annual instalments referred to in clause
(a) of sub-section
(2) shall be
paid, and the securities referred to in clause
(b) of that sub-section shall be issued, within sixty days from
the date of receipt by the Central Government of the option referred to in that sub-section, or where no
such option has been exercised, from the latest date before which such option ought to have been
exercised.
(4) The option referred to in sub-section
(2) shall be exercised by every existing bank before the
expiry of a period of three months from the commencement of this Act (or within such further time, not
exceeding three months, as the Central Government may, on the application of the existing bank, allow)
and the option so exercised shall be final and shall not be altered or rescinded after it has been exercised.
(5) Any existing bank which omits or fails to exercise the option referred to in sub-section
(2), within
the time specified in sub- section
(4), shall be deemed to have opted for payment in securities specified in
sub-clause
(i) of clause
(b) of sub-section
(2).
(6) Notwithstanding anything contained in this section, any existing bank may, before the expiry of
three months from the commencement of this Act (or within such further time, not exceeding three
months, as the Central Government may, on the application of the existing bank, allow) make an
application in writing to the Central Government for an interim payment of an amount equal to
seventy-five per cent. of the amount of the paid-up capital of such bank, immediately before such
commencement, indicating therein whether the payment is desired in cash or in securities specified in
sub-section
(2), or in both.
(7) The Central Government shall, within sixty days from the receipt of the application referred to in
sub-section
(6), make the interim payment to the existing bank in accordance with the option indicated in
such application.
(8) The interim payment made to an existing bank under sub-section
(7) shall be set off against the
total amount payable to such existing bank under this Act and the balance of the amount remaining
outstanding after such payment shall be given to the existing bank in accordance with the option
exercised, or deemed to have been exercised, under sub-section
(4) or sub-section
(5), as the case may be:
Provided that where any part of the interim payment is obtained by an existing bank in cash, the
payment so obtained shall be set off, in the first instance, against the first instalment of the cash payment
referred to in sub-section
(2), and in case the payment so obtained exceeds the amount of the first
instalment, the excess amount shall be adjusted against the second instalment and the balance of such
excess amount, if any, against the third instalment of the cash payment.
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CHAPTER IV
MANAGEMENT OF CORRESPONDING NEW BANKS
