Section 1. Subs. by Act 95 of 1956, s. 14 and the Sch., for "section 184 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957)

1. Subs. by Act 95 of 1956, s. 14 and the Sch., for "section 184 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957). 2. Subs. by s. 14 and the Sch., ibid. , for "section 187 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957). 1. Subs. by Act 95 of 1956, s. 14 and the Sch., for "section 235 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957). 2. Ins. by Act 33 of 1959, s. 32 (w.e.f. 1-10-1959). 3. The words "which has been ordered to be wound up" omitted by Act 55 of 1963, s. 23 (w.e.f. 1-2-1964). request in writing the[1] [Chief Metropolitan Magistrate or the Chief Judicial Magistrate], within whose jurisdiction any property, books of account or other documents of such banking company may be situate or be found, to take possession thereof, and the[1] [Chief Metropolitan Magistrate or the Chief Judicial Magistrate], as the case may be, shall, on such request being made to him,— 2 [(a) take possession of such property, books of accounts or other documents, and - (b) forward them to the official liquidator or the special officer]. 3[(2) Where any such property and effects are in the possession of the 1[Chief Metropolitan Magistrate or the Chief Judicial Magistrate], as the case may be, such Magistrate shall, on request in writing being made to him by the official liquidator or the special officer referred to in sub-section (1), sell such property and effects and forward the net proceeds of the sale to the official liquidator or the special officer: Provided that such sale shall, as far as practicable, be effected by public auction. 1. Cls. (l) and (n) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021). 2. Subs. by Act 1 of 1984, s. 42, for clause (m) (w.e.f. 15-2-1984). 3. Cl. (a) omitted by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013). (b) it is a co-operative bank and holds a licence issued in that behalf by the Reserve Bank, subject to such conditions, if any, as the Reserve Bank may deem fit to impose: Provided that nothing in this sub-section shall apply to a co-operative society, not being a primary credit society or a co-operative bank carrying on banking business at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965), for a period of one year from such commencement: commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 1[Provided further that nothing in this sub-section shall apply to a primary credit society carrying on banking business on or before the commencement of the Banking Laws (Amendment) Act, 2012 (4 of 2013), for a period of one year or for such further period not exceeding three years, as the Reserve Bank may, after recording the reasons in writing for so doing, extend.] 2[(2) Every co-operative society carrying on business as a co-operative bank at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965), shall before the expiry of three months from such commencement, every |---|---|---|---|---| |||||(_See_section 55)| |||||AMENDMENTS| |Year|No.|Short|title|Amendments| |1|2|3||4| |1934|2|The Reserve||(1) In section 17, to clause (15A), the following shall be added, namely :—| |||Bank<br>India|of<br>Act,|"and under the Banking Companies Act, 1949 (4 of 1949)".| |||1934.||(2) (a) Section 18 shall be renumbered as sub-section (1) of that section and in| |||||sub-section (1), as so renumbered,—| |||||(i) in clause (3) after the words "of that section", the following words shall be| |||||added, namely:—| |||||"or when the loan or advance, is made to banking company as defined in the| |||||Banking Companies Act, 1949 (4 of 1949), against such other form of security as the| |||||Bank may consider sufficient";| |||||(ii) for the words "under this section" wherever the occur, the words "under this| |||||sub-section" shall be substituted;| |||||(b) after sub-section (1) as so renumbered, the following sub-section shall be| |||||inserted, namely:—| |||||"(2) Where a banking company to which a loan or advance has been made under| |||||the provisions of clause (3) of sub-section (1) is wound up, any sums due to the| |||||Bank in respect of such loan or advance, shall subject only to the claims, if any, of| |||||any other banking company in respect of any prior loan or advance made by such| |||||banking company against any security, be a first charge on the assets of the banking| |||||company."| |||||(3) In section 42, for sub-section (6), the following sub-section shall be substituted,| |||||namely:—| |||||"(6) The bank shall, save as hereinafter provided, by notification in the Gazette of| |||||India,—| |||||(a) direct the inclusion in the Second Schedule of any bank not already so| |||||included which carries on the business of banking in any Province of India and| |||||which—| |||||(i) has a paid-up capital and reserves of an aggregate value of not less than five| |||||lakhs of rupees, and| |||||(ii) satisfies the Bank that its affairs are not being conducted in a manner| |||||detrimental to the interests of its depositors; and| |||||(iii) is a company as defined in clause (2) of section 2 of the Indian Companies| |||||Act, 1913 (7 of 1913) or a corporation or a company incorporated by or under any| |||||law in force in any place outside the Provinces of India;| |||||(b) direct the exclusion from that Schedule of any scheduled bank—| |||||(i) the aggregate value of whose paid-up capital and reserves becomes at any| |||||time less than five lakhs of rupees, or| |||||(ii) which is, in the opinion of the Bank after making an inspection under| |||||section 35 of the Banking Companies Act, 1949, conducting its affairs to the| |||||detriment of the interests of its depositors, or| |||||(iii) which goes into liquidation or otherwise ceases to carry on banking| |||||business:| THE FIRST SCHEDULE 1. The compensation to be given under section 36AG shall be an amount equal to the value of the assets of the acquired bank as on the day immediately before the appointed day, computed in accordance with the provisions of Part I of this Schedule less the total amount of liabilities thereof computed in accordance with the provisions of Part II of this Schedule. Part I.—Assets For the purposes of this Part "assets" means the total of the following:— (a) the amount of cash in hand and with the Reserve Bank and the State Bank of India (including foreign currency notes which shall be converted at the market rate of exchange); (b) the amount of balances with any bank, whether on deposit or current account, and money at call and short notice, balance held outside India being converted at the market rate of exchange: Provided that any balance which are not realisable in full shall be deemed to be debts and valued accordingly:— (c) the market value, as on the day immediately before the appointed day, of any securities, shares, debentures, bonds and other investments, held by the bank concerned. Explanation .—For the purposes of this clause,— (i) securities of the Central and State Governments [other than the securities specified in sub-clauses (ii) and (iii) of this Explanation ] maturing for redemption within five years from the appointed day shall be valued at the face value or the market value, whichever is higher; (3) For the purpose of securing compliance with the provisions of sub-section (1), the[1] [Chief Metropolitan Magistrate or the Chief Judicial Magistrate] may take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be necessary. (4) No act of the[1] [Chief Metropolitan Magistrate or the Chief Judicial Magistrate] done in pursuance of this section shall be called in question in any court or before any authority.] PART I PRELIMINARY 1. Short title, extent and commencement .—(1) This Act may be called the Banking[3] [Regulation] Act, 1949. 4[(2) It extends to the whole of India 5*.] (3) It shall come into force on such date[6] as the Central Government may, by notification in the Official Gazette, appoint in this behalf. co-operative bank which comes into existence as a result of the division of any other co-operative society carrying on business as a co-operative bank, or the amalgamation of two or more co-operative societies carrying on banking business shall, before the expiry of three months from its so coming into existence,[3] [every primary credit society which had become a primary co-operative bank on or before the commencement of the Banking Laws (Amendment) Act, 2012 (4 of 2013), shall before the expiry of three months from the date on which it had become a primary co-operative bank] and every co-operative society[4] * shall before commencing banking business in India, apply in writing to the Reserve Bank for a licence under this section: Provided that nothing in clause (b) of sub-section (1) shall be deemed to prohibit— (i) a co-operative society carrying on business as a co-operative bank at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965); or (ii) a co-operative bank which has come into existence as a result of the division of any other co-operative society carrying on business as a co-operative bank, or the amalgamation of two or more co-operative societies carrying on banking business at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965) or at any time[5] [thereafter]; 6* * * * * |---|---|---|---|---| |||||(_See_section 55)| |||||AMENDMENTS| |Year|No.|Short|title|Amendments| |1|2|3||4| |1934|2|The Reserve||(1) In section 17, to clause (15A), the following shall be added, namely :—| |||Bank<br>India|of<br>Act,|"and under the Banking Companies Act, 1949 (4 of 1949)".| |||1934.||(2) (a) Section 18 shall be renumbered as sub-section (1) of that section and in| |||||sub-section (1), as so renumbered,—| |||||(i) in clause (3) after the words "of that section", the following words shall be| |||||added, namely:—| |||||"or when the loan or advance, is made to banking company as defined in the| |||||Banking Companies Act, 1949 (4 of 1949), against such other form of security as the| |||||Bank may consider sufficient";| |||||(ii) for the words "under this section" wherever the occur, the words "under this| |||||sub-section" shall be substituted;| |||||(b) after sub-section (1) as so renumbered, the following sub-section shall be| |||||inserted, namely:—| |||||"(2) Where a banking company to which a loan or advance has been made under| |||||the provisions of clause (3) of sub-section (1) is wound up, any sums due to the| |||||Bank in respect of such loan or advance, shall subject only to the claims, if any, of| |||||any other banking company in respect of any prior loan or advance made by such| |||||banking company against any security, be a first charge on the assets of the banking| |||||company."| |||||(3) In section 42, for sub-section (6), the following sub-section shall be substituted,| |||||namely:—| |||||"(6) The bank shall, save as hereinafter provided, by notification in the Gazette of| |||||India,—| |||||(a) direct the inclusion in the Second Schedule of any bank not already so| |||||included which carries on the business of banking in any Province of India and| |||||which—| |||||(i) has a paid-up capital and reserves of an aggregate value of not less than five| |||||lakhs of rupees, and| |||||(ii) satisfies the Bank that its affairs are not being conducted in a manner| |||||detrimental to the interests of its depositors; and| |||||(iii) is a company as defined in clause (2) of section 2 of the Indian Companies| |||||Act, 1913 (7 of 1913) or a corporation or a company incorporated by or under any| |||||law in force in any place outside the Provinces of India;| |||||(b) direct the exclusion from that Schedule of any scheduled bank—| |||||(i) the aggregate value of whose paid-up capital and reserves becomes at any| |||||time less than five lakhs of rupees, or| |||||(ii) which is, in the opinion of the Bank after making an inspection under| |||||section 35 of the Banking Companies Act, 1949, conducting its affairs to the| |||||detriment of the interests of its depositors, or| |||||(iii) which goes into liquidation or otherwise ceases to carry on banking| |||||business:| |||||THE FIRST SCHEDULE| |---|---|---|---|---| |||||(_See_section 55)| |||||AMENDMENTS| |Year|No.|Short|title|Amendments| |1|2|3||4| |1934|2|The Reserve||(1) In section 17, to clause (15A), the following shall be added, namely :—| |||Bank<br>India|of<br>Act,|"and under the Banking Companies Act, 1949 (4 of 1949)".| |||1934.||(2) (a) Section 18 shall be renumbered as sub-section (1) of that section and in| |||||sub-section (1), as so renumbered,—| |||||(i) in clause (3) after the words "of that section", the following words shall be| |||||added, namely:—| |||||"or when the loan or advance, is made to banking company as defined in the| |||||Banking Companies Act, 1949 (4 of 1949), against such other form of security as the| |||||Bank may consider sufficient";| |||||(ii) for the words "under this section" wherever the occur, the words "under this| |||||sub-section" shall be substituted;| |||||(b) after sub-section (1) as so renumbered, the following sub-section shall be| |||||inserted, namely:—| |||||"(2) Where a banking company to which a loan or advance has been made under| |||||the provisions of clause (3) of sub-section (1) is wound up, any sums due to the| |||||Bank in respect of such loan or advance, shall subject only to the claims, if any, of| |||||any other banking company in respect of any prior loan or advance made by such| |||||banking company against any security, be a first charge on the assets of the banking| |||||company."| |||||(3) In section 42, for sub-section (6), the following sub-section shall be substituted,| |||||namely:—| |||||"(6) The bank shall, save as hereinafter provided, by notification in the Gazette of| |||||India,—| |||||(a) direct the inclusion in the Second Schedule of any bank not already so| |||||included which carries on the business of banking in any Province of India and| |||||which—| |||||(i) has a paid-up capital and reserves of an aggregate value of not less than five| |||||lakhs of rupees, and| |||||(ii) satisfies the Bank that its affairs are not being conducted in a manner| |||||detrimental to the interests of its depositors; and| |||||(iii) is a company as defined in clause (2) of section 2 of the Indian Companies| |||||Act, 1913 (7 of 1913) or a corporation or a company incorporated by or under any| |||||law in force in any place outside the Provinces of India;| |||||(b) direct the exclusion from that Schedule of any scheduled bank—| |||||(i) the aggregate value of whose paid-up capital and reserves becomes at any| |||||time less than five lakhs of rupees, or| |||||(ii) which is, in the opinion of the Bank after making an inspection under| |||||section 35 of the Banking Companies Act, 1949, conducting its affairs to the| |||||detriment of the interests of its depositors, or| |||||(iii) which goes into liquidation or otherwise ceases to carry on banking| |||||business:| (ii) securities of the Central Government, such as Post Office Certificates and Treasury Savings Deposit Certificates and any other securities or certificates issued or to be issued under the Small Savings Scheme of the Central Government, shall be valued at their face value or the encashable value of the market value, as on the day immediately before the appointed day, whichever is higher; (iii) where the market value of any Government security such as the zamindari abolition bonds or other similar security in respect of which the principal is payable in instalment, is not ascertainable or is, for any reason, not considered as reflecting the fair value thereof or as otherwise appropriate, the security shall be valued at such an amount as is considered reasonable having regard to the instalments of principal and interest remaining to be paid, the period during which such instalments are payable the yield of any security, issued by the Government to which the security pertains and having the same or approximately the same maturity, and other relevant factors; or other similar security in respect of which the principal is payable in instalment, is not (iv) where the market value of any security, share, debenture, bond or other investment is not considered reasonable by reason of its having been affected by abnormal factors, the investment may be valued on the basis of its average market value over any reasonable period; (v) where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable having regard to the financial position of the issuing concern, the dividend paid by it during the preceding five years and other relevant factors; (d) the amount of advances (including loans, cash, credits, overdrafts, bills purchased and discounted), and other debts, whether secured or unsecured, to the extent to which they are reasonably considered recoverable, having regard to the value of the security, if any, the operations 1. For statement of Objects and Reasons, see Gazette of India, 1948, Part V, pp. 311 and 312; for Report of Select Committee, see ibid ., 1949. Part V. pp. 45 to 48. Extended to Dadra and Nagar Haveli by Regulation 6 of 1963, s. 2 and Sch. I (w.e.f. 1-7-1965) and to Goa, Daman and Diu by Regulation 11 of 1963, s. 3 and Sch. (w.e.f. 1-2-1965). Nothing in this Act (except section 34A) shall apply to the Industrial Development Bank of India, vide Act 18 of 1964, s. 34. from carrying on banking business until it is granted a licence in pursuance of this section or is, by a notice in writing, notified by the Reserve Bank that the licence cannot be granted to it.";] 7[(ii) sub-section (3A) shall be omitted; 1. Ins. by Act 4 of 2013, s. 14 (w.e.f. 18-1-2013). 2. Subs. by Act 1 of 1984, s. 42, for sub-section (2) (w.e.f. 15-2-1984). 3. Subs. by Act 4 of 2013, s. 14, for "every primary credit society which becomes a primary co-operative bank after such commencement shall before the expiry of three months from the date on which it so becomes a primary co-operative bank" (w.e.f. 18-1-2013). 4. The words "other than a primary credit society" omitted by s. 14, ibid . (w.e.f. 18-1-2013). 5. Subs. by s. 14, ibid. , for "thereafter; or" (w.e.f. 18-1-2013). 6. Cl. (iii) omitted by s. 14, ibid . (w.e.f. 18-1-2013). 7. Subs. by Act 1 of 1984, s. 42, for sub-clause (ii) (w.e.f. 15-2-1984). (iii) in sub-section (4), in clause (iii), the words, brackets, figure and letter "and sub-section (3A)" shall be omitted;] |---|---|---|---|---| |||||(_See_section 55)| |||||AMENDMENTS| |Year|No.|Short|title|Amendments| |1|2|3||4| |1934|2|The Reserve||(1) In section 17, to clause (15A), the following shall be added, namely :—| |||Bank<br>India|of<br>Act,|"and under the Banking Companies Act, 1949 (4 of 1949)".| |||1934.||(2) (a) Section 18 shall be renumbered as sub-section (1) of that section and in| |||||sub-section (1), as so renumbered,—| |||||(i) in clause (3) after the words "of that section", the following words shall be| |||||added, namely:—| |||||"or when the loan or advance, is made to banking company as defined in the| |||||Banking Companies Act, 1949 (4 of 1949), against such other form of security as the| |||||Bank may consider sufficient";| |||||(ii) for the words "under this section" wherever the occur, the words "under this| |||||sub-section" shall be substituted;| |||||(b) after sub-section (1) as so renumbered, the following sub-section shall be| |||||inserted, namely:—| |||||"(2) Where a banking company to which a loan or advance has been made under| |||||the provisions of clause (3) of sub-section (1) is wound up, any sums due to the| |||||Bank in respect of such loan or advance, shall subject only to the claims, if any, of| |||||any other banking company in respect of any prior loan or advance made by such| |||||banking company against any security, be a first charge on the assets of the banking| |||||company."| |||||(3) In section 42, for sub-section (6), the following sub-section shall be substituted,| |||||namely:—| |||||"(6) The bank shall, save as hereinafter provided, by notification in the Gazette of| |||||India,—| |||||(a) direct the inclusion in the Second Schedule of any bank not already so| |||||included which carries on the business of banking in any Province of India and| |||||which—| |||||(i) has a paid-up capital and reserves of an aggregate value of not less than five| |||||lakhs of rupees, and| |||||(ii) satisfies the Bank that its affairs are not being conducted in a manner| |||||detrimental to the interests of its depositors; and| |||||(iii) is a company as defined in clause (2) of section 2 of the Indian Companies| |||||Act, 1913 (7 of 1913) or a corporation or a company incorporated by or under any| |||||law in force in any place outside the Provinces of India;| |||||(b) direct the exclusion from that Schedule of any scheduled bank—| |||||(i) the aggregate value of whose paid-up capital and reserves becomes at any| |||||time less than five lakhs of rupees, or| |||||(ii) which is, in the opinion of the Bank after making an inspection under| |||||section 35 of the Banking Companies Act, 1949, conducting its affairs to the| |||||detriment of the interests of its depositors, or| |||||(iii) which goes into liquidation or otherwise ceases to carry on banking| |||||business:| |Year|No.|Short|title|Amendments| |---|---|---|---|---| |1|2|3||4| |||||Provided that the Bank may, on application of the scheduled bank concerned and<br>subject to such conditions, if any, as it may impose, defer the making of a direction<br>under sub-clause (i) or sub-clauses (ii) of clause (b) for such period as the bank<br>considers reasonable to give the scheduled bank and opportunity of increasing the<br>aggregate value of its paid-up capital and reserves to not less than five lakhs of rupees<br>or, as the case may be, of removing the defects in the conduct of its affairs;<br>(c) alter the description is that Schedule whenever any scheduled bank changes its| |||||name.| |||||Explanation.—In this sub-section, the expression 'value' means the real or| |||||exchangeable value and not the nominal value which may be shown in the books of the| |||||163 bank concerned; and if any dispute arises in computing the aggregate value of the| |||||paid up capital and reserves of a bank, a determination thereof by the Bank shall be| |||||final forthe purposes ofthis sub-section.| THE SECOND SCHEDULE .—[ Repeals ] Rep. by the Repealing and Amending Act , 1957 (36 of 1957), s. 52 and I Sch. ( w.e.f. 17-9-1957). (v) where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable having regard to the financial position of the issuing concern, the dividend paid by it during the preceding five years and other relevant factors; (d) the amount of advances (including loans, cash, credits, overdrafts, bills purchased and discounted), and other debts, whether secured or unsecured, to the extent to which they are reasonably considered recoverable, having regard to the value of the security, if any, the operations 1. Ins. by Act 58 of 1968, s. 22 (w.e.f. 1-2-1969). on the account, the reported worth and respectability of the borrower, the prospects of realisation and other relevant considerations; (e) the value of any land or buildings; (f) the total amount of premia paid, in respect of all leasehold properties, reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease; (g) the written down value as per books, or the realisable value, as may be considered reasonable, of all furniture, fixture and fittings; ||current year) (previous year)| |---|---| |A. (i) Bills purchased and discounted|| |(ii) Cash credits, overdrafts and loans repayable on demand|| |(iii) Term loans|| |TOTAL :<br>B. (i) Secured by tangible assets|____________ ____________<br>____________ ____________| |(ii) Covered by Bank/Government Guarantees|| |(iii) Unsecured<br>TOTAL :|| ||____________ ____________<br> ____________ ____________| C. I. Advances in India (i) Priority sectors (ii) Public sector (iii) Banks (iv) Others ____________ ____________ TOTAL : II. Advances Outside India (i) Due from banks (ii) Due from others (a) Bills purchased and discounted (b) Syndicated loans (c) Others ____________ ____________ TOTAL : ________ ___________ ____________ ____________ GRAND TOTAL : (C.I. & C.II) ____________ ____________ SCHEDULE 10—FIXED ASSETS As on 31-3— As on 31-3— (current year) (previous year) I. Premises At cost as on 31st March of the preceding year Additions during the year Deductions during the year Depreciation to date II. Other Fixed Assets (including furniture and fixtures) At cost as on 31st March of the preceding year Additions during the year Deductions during the year Depreciation to date TOTAL : (I and II) ____________ ____________ ____________ ____________ SCHEDULE 11—OTHER ASSETS As on 31-3— As on 31-3— (current year) (previous year) I. Inter-office adjustment (net) - II. Interest accrued 1. Cls. (k) and (m) omitted by Act 33 of 1959, s. 2 (w.e.f. 1-10-1959). 2. Subs. by Act 1 of 1984, s. 13, for cl. (l) (w.e.f. 15-2-1984). 3. Ins. by Act 39 of 1989, s. 53 and II Sch. (w.e.f. 25-10-1989). 4. Ins. by Act 58 of 1968, s. 2 (w.e.f. 1-2-1969). 5. Ins. by Act 1 of 1984, s. 13 (w.e.f. 15-2-1984). 6. Cl. (nb) re-lettered as cl. (nd) by Act 1 of 1984, s. 13 (w.e.f. 15-2-1984). 7. Cl. (nc) re-lettered as cl. (ne) by s. 13, ibid . (w.e.f. 15-2-1984). 8. Subs. by Act 16 of 2025, s. 3, for "five lakhs of rupees" (w.e.f. 1-8-2025). 9. Ins. by Act 33 of 1959, s. 2 (w.e.f. 1-10-1959). 10. Sub-clause (l) omitted by the A.O. 1950. 11. Ins. by Act 33 of 1959, s. 3 (w.e.f. 1-10-1959). it, or in any resolution passed by the banking company in general meeting or by its Board of Directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of the Banking Companies (Amendment) Act, 1959 (33 of 1959); and (b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.] 1. Sub-clause (iii) omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021). 2. Subs. by Act 1 of 1984, s. 42, for clause (f) (w.e.f. 15-2-1984). 3. The words "or co-operative land mortgage bank" omitted by Act 39 of 2020, s. 4 (w.e.f. 1-4-2021). 1. Interest and discount. . . . 2. Commission, exchange and brokerage . . . . . . . . . 3. Subsidies and donations. . . 1. The official liquidator shall from time to time submit list of debtors to the High Court, each list being verified by an affidavit.