Bank of baroda

Regulations Governing Insurance Companies
Subsidiaries offering life insurance and non-life insurance are subject to the provisions of the Insurance Act, 1938 and
the various regulations prescribed by the Insurance Regulatory and Development Authority. These regulations regulate
and govern, among other things, registration as an insurance company, investment, licensing of insurance agents,
advertising, sale and distribution of insurance products and services and protection of policyholders’ interests. In May
2002, the Indian parliament approved the Insurance (Amendment) Act 2002, which facilitates the appointment of corporate
agents by insurance companies and prohibits intermediaries and brokers from operating as surrogate insurance agents.
Regulations Governing International Businesses
Our international business operations are governed by regulations in the countries in which we have a presence. We are
required to obtain approval of the RBI to set up overseas subsidiaries, offshore branches and representative offices
abroad. Further, approval from the foreign regulatory authority is also required prior to undertaking such banking operations.
The Regional Rural Banks Act, 1976
Regional Rural Banks (RRBs) are established under the Regional Rural Banks Act, 1976 by the GoI at the instance of
a sponsor bank. The GoI may also issue notifications specifying the local limits within which a given RRB shall operate.
The sponsor bank shall subscribe to the share capital of the RRB, train personnel and provide managerial and financial
assistance to the RRB during the first five years of its operations.
The Regional Rural Banks Act, 1976 stipulates the limit of the paid-up capital of a regional rural bank and further
stipulates that the shares shall always be fully paid up shares of one hundred rupees each. Of this, 50% shall be
subscribed to by the GoI, 15% by the concerned state government and 35% by the sponsor bank. The issued capital can
be changed by the board of directors of the RRB (with the prior approval of the GoI) after consultation with NABARD, the
concerned state government and the sponsor bank.
The board of directors shall consist of the following:
a chairman-appointed by the sponsor bank;
two directors, nominated by GoI, who are not officers of GoI, the concerned state government, RBI, NABARD,
sponsor bank or any other bank;
one Director to be nominated by the RBI, such person being an officer of the RBI;
one director to be nominated by NABARD, such person being an officer of NABARD;
two directors to be nominated by the sponsor bank, such person being an officer of the sponsor bank; and
two directors to be nominated by the concerned state government, who are officers of the concerned State
Government.
Every RRB shall carry on the business of banking as defined in Section 5(b) of the Banking Regulation Act and may
engage in one or more forms of business specified in Section 6(1) of the Banking Regulation Act.
Every RRB shall prepare an annual report within three months from the date of closure of the accounting year or such
further period, not exceeding three months, as may be permitted by the RBI. Such annual report shall be sent to all of its
shareholders
RRBs have been deemed to be a co-operative society for the purposes of the I.T. Act, 1974. Further, the GoI is empowered
to give directions to the RRBs and the RRBs shall have to obey and follow such directions.