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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, what is the effect of an appointment or removal of a director, chief executive officer or other officer or employee made in pursuance of section 36AA or section 36AB?

Such an appointment or removal has effect notwithstanding anything to the contrary in the Companies Act, 1956, any other law, or any contract or instrument. Section 36AC makes Part IIA override these, so shareholder approval, articles or contract terms cannot defeat it.

  1. AIt takes effect only after approval by shareholders in general meeting
  2. BIt has effect notwithstanding anything to the contrary in the Companies Act, 1956, any other law, or any contract or instrumentCorrect
  3. CIt is valid only if consistent with the articles of association of the bank
  4. DIt has effect only if the contract of employment permits removal

Explanation

Section 36AC gives overriding effect to appointments or removals under sections 36AA and 36AB. They operate despite the Companies Act, 1956, any other law in force, and any contract or other instrument. Options requiring shareholder approval, articles or contract terms contradict this override.

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