The Bank shall be authorised to carry on and transact the several kinds of business hereinafter specified, namely:—

(1)

the accepting of money on deposit without interest from, and the collection of money for, the Central Government, the State Government, local authori­ties, banks and any other persons:

(2)

(bb) the purchase, sale and rediscount of bills of exchange and promissory notes drawn and payable in India and bearing two or more good signatures, one of which shall be that of a State co-operative bank or a State financial corporation or any finan­cial institution, which is predominantly engaged in the accept­ance or discounting of bills of exchange and promissory notes and which is approved by the Bank in this behalf, and drawn or issued for the purpose of financing the production or marketing activities of cottage and small scale industries approved by the Bank and maturing within twelve months from the date of such purchase or rediscount, exclusive of days of grace, provided that the payment of the principal and interest of such bills of ex­change or promissory notes is fully guaranteed by the State Government;

(3)

(3A)

the making to any scheduled bank or State co-operative bank, or loans and advances, against promissory notes or such bank, repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days:

Provided that the borrowing bank furnishes a declaration in writing, to the effect that—

(3B)

the making to any scheduled bank or State co-operative bank or loans and advances repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days against promissory notes of such bank:

Provided that the borrowing bank furnished a declaration in writing to the effect that it has made loans and advances for bona fide commercial or trade transactions or for financing agricultural operations or the marketing of crops or for other agricultural purposes as set out in the declaration and the said declaration includes such other particulars as may be required by the Bank;

(4)

the making to local authorities, scheduled banks, State co-operative banks and State Financial Corpo­rations or loans and advances, repayable on demand or on the expiry of fixed periods not exceeding ninety days, against the security of—

(4A)

the making to any State Financial Corporation of loans and advances repayable on the expiry of fixed periods not exceeding eighteen months from the date of such loan or advance, against securities of the Central Government or of any State Government, of any maturity, or against bonds and debentures issued by that Corporation and guaranteed by the State Government concerned and maturing within a period not exceeding eighteen months from the date of such loan or advance:

Provided that the previous approval of the State Government shall be obtained for the borrowing by the State Financial Corpo­ration and the amount of loans and advances granted to that Corporation under this clause shall not, at any time, exceed in the aggregate twice the paid-up share capital thereof.

(4AA)

the making of annual contributions to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981.

(4B)

the making to the Industrial Finance Corporation of India of loans and advances,—

(4BB)

the making to any financial institution notified by the Central Government in this behalf, of loans and advances,—

(4BBB)

the making to the Unit Trust of loans and advances—

(4C)

the making to a Warehousing Corporation established under the Agricultural Produce (Development and Warehousing) Corpora­tions Act, 1956 (28 of 1956) of loans and advances,—

(4D)

the making to the Deposit Insurance Corporation of loans and advances; and generally assisting the Corporation in such manner and on such terms as may be determined by the Central Board;

(4DD)

the making to the National Housing Bank of loans and advances and generally assisting the National Housing Bank in such manner and on such terms as may be determined by the Central Board;

(4E)

the making to the National Bank of loans and advances repayable on demand or on the expiry of fixed period not exceed­ing eighteen months from the date of making of the loan or ad­vance, either—

(4F)

contributing to the initial Capital of the Unit Trust;

(4G)

the making of loans and advances to, and the purchasing of bonds and debentures of, the Exim Bank or the Reconstruction Bank or the Small Industries Bank out of the National Industrial Credit (Long Term Operations) Fund established under section 46C;

(4GG)

the making of loans and advances to, and the purchasing of bonds and debentures of, the National Housing Bank out of the National Housing Credit (Long Term Operations) Fund established under section 46D;

(4H)

the making the Small Industries Bank of loans and advances—

(4J)

the making to the Exim Bank of loans and advances—

(4K)

the making to the Reconstruction Bank of loans and advances—

(5)

the making to the Central Government and State Governments of advances repayable in each case not later than three months from the date of the making of the advance;

(6)

the issue of demand drafts, telegraphic transfers and other kinds of remittances made payable at its own offices or agencies, the purchase of telegraphic transfers, and the making, issue and circulation of bank post bills;

(6A)

dealing in derivatives, and, with the approval of the Central Board, in any other financial instrument.

Explanation.—For the purposes of this clause, “derivative” means an instrument, to be settled at a future date, whose value is derived from change in one or a combination of more than one of the following underlyings, namely:—

(8)

the purchase and sale of securities of the Central Government or a State Government of any maturity or of such securities of a local authority as may be specified in this behalf by the Central Government on the recommendation of the Central Board:

Provided that securities fully guaranteed as to principal and interest by any such Government or authority shall be deemed for the purposes of this clause to be securities of such Government or authority;

(8A)

the purchase and sale of shares in, or the capital of the National Bank 10Deposit Insurance Corporation, the State Bank or any other bank or finan­cial institution notified by the Central Government in this behalf;

(8AA)

the promoting, establishing, supporting or aiding in the promotion, establishment and support of any financial institu­tion, whether as its subsidiary or otherwise;

(8B)

the keeping of deposits with the State Bank for such specific purposes as may be approved by the Central Government in this behalf;

(9)

the custody of monies, securities and other articles of value, and the collection of the proceeds, whether principal, interest or dividends, of any such securities;

(10)

the sale realisation of all property, whether movable or immovable, which may in any way come into the possession of the Bank in satisfaction, or part satisfaction, of any of its claims;

(11)

the acting as agent for the Central Government or any State Government or any local authority or the Industrial Finance Corporation of India or any other body corporate which is established or constitut­ed by or under any other law or the Government of any such country outside India or any such person or authority is may be approved in this behalf by the Central Government in the transaction of any of the following kinds of business, namely:—

(11A)

the acting as agent for the Central Government,—

(12)

the purchase and sale of gold or silver coins and gold and silver bullion and foreign exchange and the opening of a gold account with the principal currency authority of any foreign country or the Bank for International Settlements or any interna­tional or regional bank or financial institution formed by such principal currency authority or authorities or by the Government of any foreign country;

(12A)

the purchase and sale of securities issued by the Govern­ment of any country outside India or by any institution or body corporate established outside India and expressed to be payable in a foreign currency or any international or composite currency unit, being in the case of purchase by the Bank securities matur­ing within a period of ten years from the date of purchase:

Provided that in the case of securities of an institution or body corporate, the repayment of principal and payment of interest in respect of such securities shall be guaranteed by the Government of the country concerned;

(12AA)

lending or borrowing of securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities;

(12AB)

dealing in repo or reverse repo:

Provided that lending or borrowing of funds by way of repo or reverse repo shall not be subject to any limitation contained in this section.

Explanation.—For the purposes of this clause,—

(12B)

the making of loans and advances in foreign currencies to scheduled banks, the Exim Bank, or the Reconstruction Bank or the Small Industries Bank the Industrial Finance Corporation, any State Financial Corporation and any other financial institution as may, on the recommendation of the Bank, be approved by the Central Government and on such terms and conditions as may be specified by the Central Board in this behalf, against promissory notes of such bank or financial institution, as the case may be:

Provided that the borrowing bank or financial institution, as the case may be, furnishes a declaration in writing to the effect that—

(13)

the opening of an account with an office outside India of any bank, including a bank incorporated in India or the making of an agency agreement with, and the acting as an agent or corre­spondent of, any bank incorporated outside India, or the princi­pal currency authority of any country under the law for the time being in force in that country or any international or regional bank or financial institution formed by such principal currency authorities or foreign governments, and the investing of the funds of the Bank in the shares and securities of any such inter­national or regional bank or financial institution or of any other foreign institution as may be approved by the Central Board in this behalf;

(13A)

participation in any arrangement for the clearing and settlement of any amounts due from, or to, any person or authori­ty on account of the external trade of India with any other country or group of countries or of any remittances to, or from, that country or group of countries, including the advancing, or receiving, of any amount in any currency in connection therewith, and, for that purpose, becoming, with the approval of the Central Government, a member of any international or regional clearing union of central banks monetary or other authorities, or being associated with any such clearing arrangements, or becoming a member of any body or asso­ciation formed by central banks, monetary or other similar au­thorities, or being associated with the same in any manner;

(14)

the borrowing of money for a period not exceeding one month for the purposes of the business of the Bank, and the giving of security for money so borrowed:

Provided that no money shall be borrowed under this clause from any person in India other than a scheduled bank or from any person outside India 1 other than a bank which is the principal currency authority of any country under the law for the time being in force in that country:

Provided further that the total amount of such borrowings from persons in India shall not at any time exceed the amount of the capital of the Bank;

***

(15)

the making and issue of bank notes subject to the provisions of this Act;

(15A)

the exercise of powers and functions and the performance of duties entrusted to the Bank under this Act or under any other law for the time being in force;

(15B)

the providing of facilities for training in banking and for the promotion of research, where, in the opinion of the Bank, such provision may facilitate the exercise by the Bank of its powers and functions, or the discharge of its duties;

(16)

generally, the doing of all such matters and things as may be incidental to or consequential upon the exercise of its powers or the discharge of its duties under this Act