In force · As amended up to 2026-08
2. Explanation omitted by Act 58 of 1968, s. 18 (w.e.f. 1-2-1969).
3. Ins. by Act 1 of 1984, s. 40 (w.e.f. 15-2-1984).
4. Ins. by Act 50 of 2019, s. 33 and Sch. II (w.e.f. 1-10-2020).
2. With this object in view, a Bill to amend the law relating to Banking Companies was introduced in the Legislative Assembly in November, 1944, and was subsequently circulated for eliciting public opinion through the Provincial Governments. In the ensuing Budget Session of the Assembly the Bill was referred to a Select Committee which was due to meet in October, 1945, but it lapsed before its consideration by the Committee. A fresh Bill with certain modification which suggested themselves on consideration of the opinions and criticisms received on the 1944 Bill was introduced in the Legislative Assembly in March, 1946 and was referred to a Select Committee in April 1946. The report of the Select Committee was presented to the Assembly on the 17th February, 1947. As it was the original intention of the Government that the Bill should be taken up for disposal by the Constituent Assembly (Legislative) in the form in which it emerged from the Select Committee and that the changes necessitated in the Bill as a result of the passing of the Indian Independence Act, 1947, and other developments should be moved in the House as separate amendments, a motion for the continuation of that Bill was adopted on the 17th November, 1947. In view however of a fairly large number of amendments, Government considered that the passage of the measure would be facilitated if the Bill as reported upon by the Select Committee were withdrawn and a fresh Bill incorporating all the amendments were introduced and referred to a Select Committee. The Bill was accordingly withdrawn on the 30th January, 1948. The present Bill is the result of long and detailed consideration by expert Committees, the Reserve Bank, the public including the representatives of banks, the Government and the Legislature. The main features of the Bill are as follows:--
(i) a comprehensive definition of banking so as to bring within the scope of the legislation all institutions which receive deposits, repayable on demand or otherwise, for lending or investment;
(ii) prohibiting non-banking companies from accepting deposits repayable on demand:
(iii) prohibition of trading with a view to eliminating non-banking risk:
(iv) prescription of minimum capital standards;
(v) limiting the payment of dividends;
(vi) inclusion in the scope of the legislation of banks incorporated or registered outside the Provinces of India;
(vii) introduction of a comprehensive system of licensing of banks and their branches;
(viii) prescription of a special form of balance-sheet and conferring of powers on the Reserve Bank to call for periodical returns
(ix) inspection of the books and accounts of a bank by Reserve Bank;
(x) empowering the Central Government to take action against banks conducting their affairs in a manner detrimental to the interest of the depositors;
- (xi) provision for bringing the Reserve Bank of India into closer to with banking companies;
- (xii) provision of an expeditious procedure for liquidation;
- (xiii) bringing the Imperial Bank of India within the purview of some of the provisions of the Bill;
- (xiv) widening the powers of the Reserve Bank of India so as to enable it to come to the aid of
- banking companies in times of emergency;
2. The word "companies" omitted by Act 23 of 1965, s. 10 (w.e.f. 1-3-1966).
3. Subs. by s. 11, ibid. , for "Companies" (w.e.f. 1-3-1966).
4. Subs. by Act 20 of 1950, s. 2, for sub-section (2) (w.e.f. 18-3-1950).
5. The words "except the State of Jammu and Kashmir" omitted by Act 62 of 1956, s. 2 and Sch. (w.e.f. 1-11-1956).
- (xv) provision for the extension of the Act to acceding States.
Brief explanatory notes on the several clauses are given in the annexed notes on clauses.
NEW DELHI; The 12 th March , 1948.
R. K. SHANMUKHAM CHETTY.
2. Explanation omitted by Act 58 of 1968, s. 18 (w.e.f. 1-2-1969).
3. Ins. by Act 1 of 1984, s. 40 (w.e.f. 15-2-1984).
4. Ins. by Act 50 of 2019, s. 33 and Sch. II (w.e.f. 1-10-2020).
5. Added by Act 52 of 1953, s. 11 (w.e.f. 30-12-1953). 6. Sub-section (3) omitted by Act 1 of 1984, s. 41 (w.e.f. 15-2-1984).
7. Ins. by Act 52 of 1953, s. 11 (w.e.f. 30-12-1953).
8. Ins. by Act 1 of 1984, s. 41 (w.e.f. 15-2-1984).
of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]
2. Sub-clause (iii) renumbered as sub-clause (iv) by s. 42, ibid . (w.e.f. 15-2-1984).
2. Every such list shall contain the following particulars:—
(a) names and addresses of the debtors;
(b) amount of debt due to the banking company by each debtor;
(c) rate of interest, if any, and the date up to which such interest has been calculated in the case of each debtor;
(d) description of papers, writings, and documents, if any, relating to each debt;
- (e) relief or reliefs claimed against each debtor.
2. If the acquired bank is not incorporated in India, the assets or, as the case may be, the liabilities of the bank shall be, for the purposes of Part I and Part II, and subject to the other provisions therein, the assets and liabilities of the offices of the bank situated in India.
COMPENSATION PAYABLE TO SHAREHOLDERS
Source: India Code