Section 86H: Decreasing the Capital of Problematic Commercial Bank or Financial Institution

1) Whatever may be mentioned in the Companies Act or other prevailing law or memorandum and article of association of the problematic commercial bank or financial institution, after taking such commercial bank or financial institution in its control under the provision of the Clause (o) of the sub-section (1) of the Section 86C, in case there is reduction of the paid up capital of such commercial bank or financial institution or the due amount was not paid by the shareholders or liabilities is not recoverable by the assets of such commercial bank or financial institution, bank can decrease the share capital of such commercial bank or financial institution in limit of reduction of the share capital or liabilities which is not coverable by the assets.

Provided that, before a decrease in share capital, the bank has to publish a minimum of two notices of this effect in a national daily.

*2) ………………

3) Before issuing the notice under sub-section (1), the bank must provide thirty days’ notice to shareholders who have paid the due amount for the price of their paid-up shares. The bank can initiate the process of cancelling the shares of those shareholders who have not paid the due amount after such notice. Additionally, the bank can determine the minimum price for the shares of a commercial bank or financial institution that is insolvent or in the process of dissolution.

4) In case of a decrease in the share capital of any commercial bank or financial institution under sub-section (1) or cancellation of shares under sub-section (3), it may be ipso facto considered that an amendment in the memorandum and articles of association of such commercial bank or financial institution is made accordingly.

* Deleted By the Second Amendment.