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CMA Final · Corporate and Economic Laws · Laws and Regulations related to Banking Sector

Under section 36AC of the Banking Regulation Act, 1949, an RBI-directed removal of a director of a banking company under section 36AA takes effect:

Such removal takes effect notwithstanding anything to the contrary in the Companies Act, 1956, any other law, or any contract or instrument. Part IIA overrides these, so neither shareholder approval, contract terms nor the remaining term of the director can prevent the removal from operating.

  1. AOnly after the removal is approved by shareholders in general meeting
  2. BNotwithstanding anything to the contrary in the Companies Act, 1956, any other law, or any contract or instrumentCorrect
  3. CSubject to the terms of the director's contract of service
  4. DOnly after the expiry of the director's current term

Explanation

Section 36AC gives Part IIA appointments and removals under sections 36AA or 36AB overriding effect over the Companies Act, 1956, any other law and any contract or instrument. Shareholder approval or contract terms therefore cannot defeat it.

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