The Small Industries Development Bank of India Act, 1989

(1) This Act may be called the Small IndustriesDevelopment Bank of India Act, 1989. (2) It extends to the whole of India. (3) It shall come into force on such date1as the Central Government may, by notification, appoint anddifferent dates may be appointed for different provisions of this Act.

In this Act, unless the context otherwise requires,-- (a) "Board" means the Board of directors of the Small Industries Development Bank of Indiareferred to in section 5; 1[(b) "chairman and managing director" means the chairman and managing director referred to inclause (a) of sub-section (1) of section 6;] (c) "Court" means the High Court within the local limits of whose jurisdiction,-- (i) the defendant or respondent or, where there is more than one defendant or respondent, anyone of them-- (1) has his registered office, or (2) carries on the whole or part of his business, at the time of commencement of any legal proceedings against him under this Act, or (ii) the cause of action for such legal proceedings, wholly or in part, arises; (d) "Development Bank" means the Industrial Development Bank of India established undersection 3 of the Industrial Development Bank of India Act,1964 (18 of 1964); (e) "Director" means a Director nominated under sub-section (1) of section 6 and includesthe 2[chairman and managing director and whole-time director]; (f) "export" means export from India of products or services of any industrial concern insmall-scale sector; 3[(fa) "General Insurance Corporation" means the General Insurance Corporation of Indiaformed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972);] (g) "import" means import into India of services or goods including all materials, commoditiesand articles in a solid, liquid or gaseous state and all forms of energy for the use of any industrialconcern in the small-scale sector; 4[(h) "industrial concern in the small scale sector" means any concern engaged or to be engagedin,-- (i) the manufacture, preservation or processing of goods; (ii) shipping; (iii) mining including development of mines; (iv) the hotel industry; (v) the transport of passengers or goods by road or by water or by air or by ropeway or by lift; (vi) the generation, storage or distribution of electricity or any other form of energy; (vii) the maintenance, repair, testing or servicing of machinery or equipment of anydescription or vehicles or vessels or motor boats or trailers or tractors; (viii) assembling, repairing or packing any article with the aid of machinery or power; (ix) the setting up of, or development of, an industrial area or an industrial estate; (x) fishing or providing shore facilities for fishing or maintenance thereof; (xi) providing special or technical knowledge or other services for the promotion of industrialgrowth; (xii) providing engineering, technical, financial, management, marketing or other services orfacilities for industry; (xiii) service industry such as altering, ornamenting, polishing, finishing, oiling, washing,cleaning or otherwise treating or adapting any article or substance with a view to its use, sale,transport, delivery or disposal; (xiv) providing medical, health or other allied services; (xv) providing services relating to information technology, telecommunication or electronics; (xvi) leasing, sub-leasing or giving on hire-purchase of industrial plants, equipments,machinery or other assets including vehicles, ships and aircraft; (xvii) such other activity as the Central Government may, having regard to the objects of thisAct, by notification, specify in this behalf; or (xviii) the research and development of any concept, technology, design, process or productwhether in relation to any of the matters aforesaid, including any activities specified undersub-clause (xvii), or any other matter and which is regarded as a small-scale undertaking undersection 11B of the Industries (Development and Regulation) Act, 1951(65 of 1951); Explanation.--The expression "processing of goods" includes any art or process for producing,preparing or making an article by subjecting any material to a manual, mechanical, chemical, electrical orany other like operation.] 5[(ha) "Life Insurance Corporation" means the Life Insurance Corporation of India established undersection 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);] 6* * * * * (j) "National Small Industries Corporation" means the National Small Industries Corporation Limitedregistered under the Companies Act, 1956 (1 of 1956); (k) "notification" means a notification published in the Official Gazette; (l) "prescribed" means prescribed by regulations made under this Act; 7[(la) "public sector bank" means the State Bank of India constituted under the State Bank of IndiaAct, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act,1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under section 3 of the BankingCompanies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);] 8(lb) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of IndiaAct, 1934 (2 of 1934); (lc) "scheduled bank" means a bank for the time being included in the Second Schedule to theReserve Bank of India Act, 1934 (2 of 1934);] (m) "Small Industries Bank" means the Small Industries Development Bank of India establishedunder sub-section (1) of section 3; (n) "State Small Industries Corporation" means a State Corporation, registered under the CompaniesAct, 1956 (1 of 1956), for small industries in a State; (o) "State Financial Corporation" means a financial corporation established under section 3 or section3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951); (p) "State Industrial Development Corporation" means a State Corporation registered under theCompanies Act, 1956 (1 of 1956) for the development of industries in a State; 9* * * * *

(1) Witheffect from such date as the Central Government may, by notification, appoint, there shall be established,for the purposes of this Act, a corporation to be known as the Small Industries Development Bank ofIndia. (2) The Small Industries Bank shall be a body corporate with the name aforesaid having perpetualsuccession and a common seal with power, subject to the provisions of this Act, to acquire, hold anddispose of property and to contract, and may, by that name, sue or be sued. (3) The head office of the Small Industries Bank shall be at Lucknow or at such other place as theCentral Government may, by notification, specify. (4) The Small Industries Bank shall establish offices, branches or agencies at any place in or outsideIndia.

1[4. Authorised capital.--The authorised capital of the Small Industries Bank shall be one thousandcrores of rupees divided into seventy-five crores fully paid-up equity shares of rupees ten each andtwenty-five crores of fully paid-up redeemable preference shares of rupees ten each: Provided that the Central Government may, on the recommendation of the Board, by notification,increase the authorised capital to an amount not exceeding two thousand crores of rupees consisting ofsuch number of equity shares and redeemable preference shares as it may deem fit.]

1[4A. Conversion of equity shares into redeemable preference shares.--(1) The CentralGovernment may, at any time after the commencement of the Small Industries Development Bank ofIndia (Amendment) Act, 2000, by notification, convert such number of equity shares held by theDevelopment Bank, the public sector banks, the General Insurance Corporation, the Life InsuranceCorporation and other institutions owned or controlled by the Central Government, not exceeding twentyfivecrores, as it may decide, into redeemable preference shares: Provided that such conversion shall in no case reduce the equity shares held in aggregate by theDevelopment Bank, the public sector banks, the General Insurance Corporation, the Life InsuranceCorporation and other institutions owned or controlled by the Central Government to less than fifty-oneper cent. (2) The redeemable preference shares referred to in sub-section (1) shall-- (a) carry such fixed rate of dividend as the Central Government may specify at the time of suchconversion, and (b) neither be transferable nor carry any voting rights. (3) The redeemable preference shares referred to in sub-section (1) shall be redeemed by the SmallIndustries Bank within three years from the date of such conversion in such instalments and in suchmanner as the Board may determine.]