(1)

A subsidiary bank may accept any subsidies offered by the State Bank to meet—

1. the cost of the whole or any part of any specific programme of development undertaken by that subsidiary bank with the approval of the State Bank; and
2. such losses or expenditure as may be approved by the State Bank, with the consent of the Reserve Bank.

(2)

For the purposes of the [Income tax-Act, 1961] [Substituted [Indian Income-tax Act, 1922] by Act 30 of 2007 (w.e.f. 18.6.2007) ] (11 of 1922), any subsidy received by a subsidiary bank under sub-section (1) shall not be treated as income, profits or gains of the subsidiary bank.