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CS Professional · Banking and Insurance - Laws and Practice · Control over Organization of Banks

Under a sanctioned scheme of amalgamation of Narmada Bank Ltd. into Ganga Bank Ltd. under Section 45, 200 workmen of Narmada Bank are to continue in service. Which statement about their employment is correct?

The workmen continue in the transferee bank on the same pay and terms they had just before the moratorium order. The scheme must also provide that within three years of sanction, the transferee bank grants terms applicable to employees of corresponding rank or status.

  1. AThey continue in the transferee bank on the same remuneration and terms they had just before the date of the moratorium order, with a provision for parity with corresponding employees of the transferee bank within three yearsCorrect
  2. BThey are automatically dismissed and must reapply to the transferee bank
  3. CThey continue at the transferee bank's pay scales from day one, regardless of earlier terms
  4. DThey continue on the same terms permanently, with no later parity with the transferee bank's employees

Explanation

Section 45(5)(i) continues services at the same remuneration and terms as before the moratorium order. The proviso requires that, within three years of sanction, the transferee bank grants terms applicable to employees of corresponding rank or status, subject to equivalent qualifications and experience. Permanent freezing is therefore wrong.

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