BANKING REGULATION ACT, 1949
(1) This Act may be called the Banking 1[Regulation] Act, 1949.
2[(2) It extends to the whole of India 3[***].]
(3) It shall come into force on such date4 as the Central Government may, by notification in the Official Gazette, appoint in this behalf.
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1. Subs. by Act 23 of 1965, sec. 11, for "Companies" (w.e.f. 1-3-1966).
2. Subs. by Act 20 of 1950, sec. 2, for sub-section (2) (w.e.f. 18-3-1950).
3. The words "except the State of Jammu and Kashmir" omitted by Act 62 of 1956, sec. 2 and Sch. (w.e.f.1-11-1956).
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The provisions of this Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the 1[Companies Act, 1956 (1 of 1956)], and any other law for the time being in force.
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1. Subs. by Act 95 of 1956, sec. 14 and Sch., for "Indian Companies Act, 1913 (7 of 1913)” (w.e.f. 14-1-1957).
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Nothing in this Act shall apply to—
(a) a primary agricultural credit society;
(b) a co-operative land mortgage bank; and
(c) any other co-operative society, except in the manner and to the extent specified in Part V.]
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1. Subs. by Act 23 of 1965, sec. 12, for section 3 (w.e.f. 1-3-1966).
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(1) The Central Government, if on a representation made by the Reserve Bank in this behalf is satisfied that it is expedient so to do, may by notification in the Official Gazette suspend for such period, not exceeding sixty days, as may be specified in the notification, the operation of all or any of the provisions of this Act, either generally or in relation to any specified banking company.
(2) In a case of special emergency, the Governor of the Reserve Bank, or in his absence a Deputy Governor of the Reserve Bank nominated by him in this behalf may, by order in writing, exercise the powers of the Central Government under sub-section (1) so however that the period of suspension shall not exceed thirty days, and where the Governor or the Deputy Governor, as the case may be, does so, he shall report the matter to the Central Government forthwith, and the order shall, as soon as
1[In this Act], unless there is anything repugnant in the subject or context,—
2[(a) “approved securities” means—
(i) securities in which a trustee may invest money under clause (a), clause (b), clause (bb), clause (c) or clause (d) of section 20 of the Indian Trusts Act, 1882 (2 of 1882);
(ii) such of the securities authorised by the Central Government under clause (f) of section 20 of the Indian Trusts Act, 1882 (2 of 1882), as may be prescribed;]
(b) “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise;
(c) “banking company” means any company which tr
(1) In addition to the business of banking, a banking company may engage in any one or more of the following forms of business, namely:—
(a) the borrowing, raising, or taking up of money; the lending or advancing of money either upon or without security; the drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hoondees, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, scrips and other instruments and securities whether transferable or negotiable or not; the granting and issuing of letters of credit, traveller’s cheques and circular notes; the buying, selling and dealing in bullion and specie; the buying and selling of foreign exchange including foreign bank notes; the acquiring, holding, issuing on commission, underwriting and dealing in stock, funds, shares, debentures,
(1) No company other than a banking company shall use as part of its name 2[or in connection with its business] any of the words “bank”, “banker” or “banking” and no company shall carry on the business of banking in India unless it uses as part of its name at least one of such words.
(2) No firm, individual or group of individuals shall, for the purpose of carrying on any business, use as part of its or his name any of the words “bank”, “banking” or “banking company”.
(3) Nothing in this section shall apply to—
(a) a subsidiary of a banking company formed for one or more of the purposes mentioned in sub-section (1) of section 19, whose name indicates that it is a subsidiary of that banking company;
(b) any association of banks formed for the pr
Notwithstanding anything contained in section 6 or in any contract, no banking company shall directly or indirectly deal in the buying or selling or bartering of goods, except in connection with the realisation of security given to or held by it, or engage in any trade, or buy, sell or barter goods for others otherwise than in connection with bills of exchange received for collection or negotiation or with such of its business as is referred to in clause (i) of sub-section (1) of section 6:
1[Provided that this section shall not apply to any such business as is specified in pursuance of clause (o) of sub-section (1) of section 6.]
Explanation.—For the purposes of this section, “goods” means every kind of movable property, other than actionable claims, stocks, shares, money, bullion and specie, and all instruments referred to in clause (
Notwithstanding anything contained in section 6, no banking company shall hold any immovable property howsoever acquired, except such as is required for its own use, for any period exceeding seven years from the acquisition thereof or from the commencement of this Act, whichever is later or any extension of such period as in this section provided, and such property shall be disposed of within such period or extended period, as the case may be:
Provided that the banking company may, within the period of seven years as aforesaid deal or trade in any such property for the purpose of facilitating the disposal thereof:
Provided further that the Reserve Bank may in any particular case extend the aforesaid period of seven years by such period not exceeding five years where it is satisfied that such extension would be in the interests of the
(1) No banking company—
(a) shall employ or be managed by a managing agent; or
(b) shall employ or continue the employment of any person—
(i) who is, or at any time has been, adjudicated insolvent, or has suspended payment or has compounded with his creditors,or who is, or has been, convicted by a criminal court of an offence involving moral turpitude; or
(ii) whose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company:
2[Provided that nothing contained in this sub-clause shall apply to the payment by a banking company of—
(a) any bonus in pursuance of a settlement or award arrived at or made
(1) Notwithstanding anything contained in any other law for the time being in force, every banking company,—
(a) in existence on the commencement of section 3 of the Banking Laws (Amendment) Act, 1968 (58 of 1968), or
(b) which comes into existence thereafter,
shall comply with the requirements of this section:
Provided that nothing contained in this sub-section shall apply to a banking company referred to in clause (a) for a period of three months from such commencement.
(2) Not less than fifty-one per cent. of the total number of members of the Board of directors of a banking company shall consist of persons, who—
(a) shall have special knowledge or pra
2[(1) Notwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company in existence on the commencement of the Banking Regulation (Amendment) Act, 1994 (20 of 1994), or which comes into existence thereafter shall have one of its directors, who may be appointed on a whole-time or a part-time basis, as chairman of its Board of directors, and where he is appointed on a whole-time basis, as chairman of its Board of directors, he shall be entrusted with the management of the whole of the affairs of the banking company:
Provided that the chairman shall exercise his powers subject to the superintendence, control and direction of the Board of directors.
(1A) Where a chairman is appointed on a part-time basis,—
(i) such appointment
(1) Where the office, of the 2[chairman of the Board of directors appointed on a whole-time basis or a managing director] of a banking company is vacant, the Reserve Bank may, if it is of opinion that the continuation of such vacancy is likely to adversely affect the interests of the banking company, appoint a person eligible under sub-section (4) of section 10B to be so appointed, to be the 2[chairman of the Board of directors appointed on a whole-time basis or a managing director] of the banking company and where the person so appointed is not a director of such banking company, he shall, so long as he holds the office of the 2[chairman of the Board of directors appointed on a whole-time basis or a managing director], be deemed to be director of the banking company.
(2) The 2[chairman of the Board of directors appointed on a whole-time basis or a managing director] so appointed b
2[Chairman of the Board of directors who is appointed on a whole-time basis or a managing director] of a banking company (by whomsoever appointed) and a director of a banking company (appointed by the Reserve Bank under section 10A) shall not be required to hold qualification shares in the banking company.]
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1. Subs. by Act 1 of 1984, sec. 19, for section 10C (w.e.f. 15-2-1984). Earlier section 10C inserted by Act 58 of 1968, sec. 3 (w.e.f. 1-2-1969).
2. Subs. by Act 20 of 1994, sec. 4, for “A chairman” (w.r.e.f. 31-1-1994).
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Any appointment or removal of a 2[director, chairman of the Board of directors who is appointed on a whole-time basis or a managing director] in pursuance of section 10A or section 10B 3[or section 10BB] shall have effect and any such person shall not be entitled to claim any compensation for the loss or termination of office, notwithstanding anything contained in any law or in any contract, memorandum or articles of association.]
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1. Ins. by Act 58 of 1968, sec. 3 (w.e.f. 1-2-1969).
2. Subs. by Act 20 of 1994, sec. 5, for “director or chairman” (w.r.e.f. 31-1-1994).
3. Ins. by Act 1 of 1984, sec. 20 (w.e.f. 15-2-1984).
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Section 10(d) of the Banking Regulation Act, 1949, forms part of the broader legal framework regulating the management and employment practices within banking companies. It aims to restrict certain employment practices to ensure the integrity and proper functioning of banking institutions, aligning with the overarching regulatory objectives of the Act.
Section 10(d) prohibits banking companies from employing or continuing the employment of any person whose remuneration or part thereof takes the form of commission. This restriction is intended to prevent conflicts of interest and ensure transparency in banking operations.
Note: This commentary synthesizes legal insights from various sources, emphasizing the importance of Section 10(d) within the broader regulatory landscape of banking employment practices.
(1) Notwithstanding anything contained in 1[section 149 of the Companies Act, 1956 (1 of 1956)], no banking company in existence on the commencement of this Act, shall, after the expiry of three years from such commencement or of such further period not exceeding one year as the Reserve Bank, having regard to the interests of the depositors of the company, may think fit in any particular case to allow, carry on business 2[in India], and no other banking company shall after the commencement of this Act, commence or carry on business 2[in India] 3[unless it complies with such of the requirements of this section as are applicable to it].
4[(2) In the case of a banking company incorporated outside India—
(a) the aggregate value of its paid-up capital and reserves shall not be less than fifteen lakhs of rupees and if it has a place or pl
(1) No banking company shall carry on business in India, unless it satisfies the following conditions, namely:—
(i) that the subscribed capital of the company is not less than one-half of the authorised capital, and the paid-up capital is not less than one-half of the subscribed capital and that, if the capital is increased, it complies with the conditions prescribed in this clause within such period not exceeding two years as the Reserve Bank may allow;
(ii) that the capital of the company consists of ordinary shares only or of ordinary shares or equity shares and such preferential shares as may have been issued prior to the 1st day of July, 1944:
Provided that nothing contained in this sub-section shall apply to any banking company incorporated before the 15th day of January, 1937.
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(1) The Reserve Bank may, by order, require any banking company to call a general meeting of the shareholders of the company within such time, not less than two months from the date of the order, as may be specified in the order or within such further time as the Reserve Bank may allow in this behalf, to elect in accordance with the voting rights permissible under this Act fresh directors, and the banking company shall be bound to comply with the order.
(2) Every director elected under sub-section (1) shall hold office until the date up to which his predecessor would have held office, if the election had not been held.
(3) Any election duly held under this section shall not be called in question in any court.]
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Notwithstanding anything to the contrary contained in 1[sections 76 and 79 of the Companies Act, 1956 (1 of 1956)], no banking company shall pay out directly or indirectly by way of commission, brokerage, discount or remuneration in any form in respect of any shares issued by it, any amount exceeding in the aggregate two and one-half per cent. of the paid-up value of the said shares.
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1. Subs. by Act 95 of 1956, sec. 14 and Sch. 1, for "sections 105 and 105A of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957).
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No banking company shall create any charge upon any unpaid capital of the company, and any such charge shall be invalid.
(1) Notwithstanding anything contained in section 6, no banking company shall create a floating charge on the undertaking or any property of the company or any part thereof, unless the creation of such floating charge is certified in writing by the Reserve Bank as not being detrimental to the interests of the depositors of such company.
(2) Any such charge created without obtaining the certificate of the Reserve Bank shall be invalid.
(3) Any banking company aggrieved by the refusal of a certificate under sub-section (1) may, within ninety days from the date on which such refusal is communicated to it, appeal to the Central Government.
(4) The decision of the Central Government where an appeal has been preferred to it under sub-section (3) or of the Reserve Bank where no such appeal has been
1[(1)] No banking company shall pay any dividend on its shares until all its capitalised expenses (including preliminary expenses, organisation expenses, share-selling commission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off.
2[(2) Notwithstanding anything to the contrary contained in sub-section (1) or in the Companies Act, 1956 (1 of 1956), a banking company may pay dividends on its shares without writing off—
(i) the depreciation, if any, in the value of its investments in approved securities in any case where such depreciation has not actually been capitalised or otherwise accounted for as a loss;
(ii) the depreciation, if any, in the value of its investments in shares, debentures or bonds
2[(1) No banking company incorporated in India shall have as a director in its Board of directors any person who is a director of any other banking company.
(1A) No banking company referred to in sub-section (1) shall have in its Board of directors, more than three directors who are directors of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent. of the total voting rights of all the shareholders to that banking company.]
(2) If immediately before the commencement of the Banking Companies (Amendment) Act, 1956 (95 of 1956), any person holding office as a director of a banking company is also a director of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent. of the total voting rights of all the shareholders of the banking company, he shall
(1) Every banking company incorporated in India shall create a reserve fund and 2[***] shall, out of the balance of profit of each year as disclosed in the profit and loss account prepared under section 29 and before any dividend is declared, transfer to the reserve fund a sum equivalent to not less than twenty per cent of such profit.
3[(1A) Notwithstanding anything contained in sub-section (1), the Central Government may, on the recommendation of the Reserve Bank and having regard to the adequacy of the paid-up capital and reserves of a banking company in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not apply to the banking company for such period as may be specified in the order:
Provided that no such order shall be made unless, at the time it is made, the amount in the
(1) Every banking company, not being a scheduled bank, shall maintain in India by way of cash reserve with itself or by way of balance in a current account with the Reserve Bank, or by way of net balance in current accounts or in one or more of the aforesaid ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight and shall submit to the Reserve Bank before the twentieth day of every month a return showing the amount so held on alternate Fridays during a month with particulars of its demand and time liabilities in India on such Fridays or if any such Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), at the close of business on the preceding working day.
Explanation.—In this section, and in section 24,—
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1[(1) A banking company shall not form any subsidiary company except a subsidiary company formed for one or more of the following purposes, namely:—
(a) the undertaking of any business which, under clauses (a) to (o) of sub-section (1) of section 6, is permissible for a banking company to undertake, or
(b) with the previous permission in writing of the Reserve Bank, the carrying on of the business of banking exclusively outside India, or
(c) the undertaking of such other business, which the Reserve Bank may, with the prior approval of the Central Government, consider to be conducive to the spread of banking in India or to be other wise useful or necessary in the public interest.
Explanation.—For the purposes of section 8, a banking company s
(1) Notwithstanding anything to the contrary contained in section 77 of the Companies Act, 1956 (1 of 1956), no banking company shall,—
(a) grant any loans or advances on the security of its own shares, or—
(b) enter into any commitment for granting any loan or advance to or on behalf of—
(i) any of its directors,
(ii) any firm in which any of its directors is interested as partner, manager, employee or guarantor, or
(iii) any company [not being a subsidiary of the banking company or a company registered under section 25 of the Companies Act, 1956 (1 of 1956), or a Government company] of which 2[or the subsidiary or the holding company of which] any of the directors of the banking company is a d
(1) Notwithstanding anything to the contrary contained in section 293 of the Companies Act, 1956 (1 of 1956), a banking company shall not, except with the prior approval of the Reserve Bank, remit in whole or in part any debt due to it by—
(a) any of its directors, or
(b) any firm or company in which any of its directors is interested as director, partner, managing agent or guarantor, or
(c) any individual if any of its directors is his partner or guarantor.
(2) Any remission made in contravention of the provisions of sub-section (1) shall be void and of no effect.]
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1. Ins. by Act
(1) Where the Reserve Bank is satisfied that it is necessary or expedient in the public interest 1[or in the interests of depositors] 2[ or banking policy] so to do, it may determine the policy in relation to advances to be followed by banking companies generally or by any banking company in particular, and when the policy has been so determined, all banking companies or the banking company concerned, as the case may be, shall be bound to follow the policy as so determined.
(2) Without prejudice to the generality of the power vested in the Reserve Bank under sub-section (1) the Reserve Bank may give directions to banking companies, either generally or to any banking company or group of banking companies in particular, 3[as to—
(a) the purposes for which advances may or may not be made,
(b)
Notwithstanding anything contained in the Usurious Loans Act, 1918 (10 of 1918), or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be re-opened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive.]
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1. Ins. by Act 1 of 1984, sec. 24 (w.e.f. 15-2-1984).
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1[(1) Save as hereinafter provided, no company shall carry on banking business in India unless it holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued subject to such conditions as the Reserve Bank may think fit to impose.]
(2) Every banking company in existence on the commencement of this Act, before the expiry of six months from such commencement, and every other company before commencing banking business 2[in India], shall apply in writing to the Reserve Bank for a licence under this section:
Provided that in the case of a banking company in existence on the commencement of this Act, nothing in sub-section (1) shall be deemed to prohibit the company from carrying on banking business until it is granted a licence in pursuance of 3[this section] or is by notice in writing informed by the Reserve
(1) Without obtaining the prior permissions of the Reserve Bank-
(a) no banking company shall open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India; and
(b) no banking company incorporated in India shall open a new place of business outsideIndia or change, otherwise than within the same city, town or village in any country or area outside India, the location of an existing place of business situated in that country or area:
PROVIDED that nothing in this sub-section shall apply to the opening for a period not exceeding one month of a temporary place of business within a city, town or village or the environs thereof within which the banking company already has a place of business, for
1 [***]
2 [(2A) A scheduled bank, in addition to the average daily balance which it is, or may be, required to maintain under section 42 of the Reserve Bank of India Act, 1934 (2 of 1934) and every other banking company, in addition to the cash reserve which it is required to maintain under section 18, shall maintain in India, assets, the value of which shall not be less than such percentage not exceeding forty per cent. of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight as the Reserve Bank may, by notification in the Official Gazette, specify from time to time and such assets shall be maintained, in such form and manner, as may be specified in such notification.]
3 [***]
4 [(3) For the purpose of ensuring compliance with the pro
1[(1) The assets in India of every banking company at the close of business on the last Friday of every quarter or, if that Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), at the close of the business on the preceding working day, shall not be less than seventy-five per cent. of its demand and time liabilities in India.
(2) Every banking company shall, within one month from the end of every quarter, submit to the Reserve Bank a return in the prescribed form and manner of the assets and liabilities referred to in sub-section (1) as at the close of business on the last Friday of the previous quarter, or, if that Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881) at the close of business on the preceding working day:]
2[Provided that every regional rural bank shall also f
Every banking company shall, within thirty days after the close of each calendar year, submit a return in the prescribed form and manner to the Reserve Bank as at the end of such calendar year of all accounts 1[in India] which have not been operated upon for ten years 2[***]:
Provided that in the case of money deposited for a fixed period the said term of ten years shall be reckoned from the date of the expiry of such fixed period:
3[Provided further that every regional rural bank shall also furnish a copy of the said return to the National Bank.]
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1. Subs. by Act 20 of 1950, sec. 3, for “in the States” (w.e.f. 18-3-1950).
2. Certa
(1) Every banking company shall, before the close of the month succeeding that to which it relates, submit to the Reserve Bank a return in the prescribed form and manner showing its assets and liabilities 1[in India] as at the close of business on the last Friday of every month or if that Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), at the close of business on the preceding working day.
2[(2) The Reserve Bank may at any time direct a banking company to furnish it within such time as may be specified by the Reserve Bank, with such statements and information relating to the business or affairs of the banking company (including any business or affairs with which such banking company is concerned) as the Reserve Bank may consider necessary or expedient to obtain for the purposes of this Act, and without prejudice to the generality of the foregoi
The Reserve Bank or the National Bank, or both, if they consider it in the public interest so to do, may 2[publish—
(a) any information obtained by them under this Act in such consolidated form as they think fit;
(b) in such manner as they may consider proper, any credit information disclosed under the Credit Information Companies (Regulation) Act, 2005.]
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1. Subs. by Act 61 of 1981, sec. 61 and Second Sch., Pt. II, for section 28 (w.e.f. 1-5-1982).
2. Subs. by Act 30 of 2005, sec. 34 and Sch., Pt. II, for “publish any information obtained by them under this Act in such consolidated form as they think fit.”
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(1) At the expiration of each calendar year 1[or at the expiration of a period of twelve months ending with such date2 as the Central Government may, by notification in the Official Gazette, specify in this behalf,] every banking company incorporated 3[in India], in respect of all business transacted by it, and every banking company incorporated 4[outside India], in respect of all business transacted through its branches 3[in India], shall prepare with reference to 5[that year or period, as the case may be,] a balance-sheet and profit and loss account as on the last working day of 6[that year or the period, as the case may be,] in the Forms set out in the Third Schedule or as near thereto as circumstances admit:
7[Provided that with a view to facilitating the transition from one period, of accounting to another period of accounting under this sub-section, the Central Government ma
1[(1) The balance-sheet and profit and loss account prepared in accordance with section 29 shall be audited by a person duly qualified under any law for the time being in force to be an auditor of companies.]
2[(1A) Notwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company shall, before appointing, re-appointing or removing any auditor or auditors, obtain the previous approval of the Reserve Bank.
(1B) Without prejudice to anything contained in the Companies Act, 1956 (1 of 1956), or any other law for the time being in force, where the Reserve Bank is of opinion that it is necessary in the public interest or in the interest of the banking company or its depositors so to do, 3[it may at any time by order direct that a special audit of the banking company’s accounts,
The accounts and balance-sheet referred to in section 29 together with the auditor’s report shall be published in the prescribed manner and three copies thereof shall be furnished as returns to the Reserve Bank within three months from the end of the period to which they refer:
Provided that the Reserve Bank may in any case extend the said period of three months for the furnishing of such returns by a further period not exceeding three months:
1[Provided further that a regional rural bank shall furnish such returns also to the National Bank.]
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1. Ins. by Act 61 of 1981, sec. 61 and Sch. II, Pt. II (w.e.f. 1-5-1982).
1[(1) Where a banking company in any year furnishes its accounts and balance-sheet in accordance with the provisions of section 31, it shall at the same time send to the registrar three copies of such accounts and balance-sheet and of the auditor’s report, and where such copies are so sent, it shall not be necessary to file with the registrar, in the case of a public company, copies of the accounts and balance-sheet and of the auditor’s report, and, in the case of a private company, copies of the balance-sheet and of the auditor’s report as required by sub-section (1) of section 220 of the Companies Act, 1956 (1 of 1956); and the copies so sent shall be chargeable with the same fee and shall be dealt with in all respects as if they were filed in accordance with that section.]
(2) When in pursuance of sub-section (2) of section 27 the Reserve Bank requires any additional statement
Every banking company incorporated 1[outside India] shall, not later than the first Monday in August of any year in which it carries on business, display in a conspicuous place in its principal office and in every branch office 2[in India] a copy of its last audited balance-sheet and profit and loss account prepared under section 29, and shall keep the copy so displayed until replaced by a copy of the subsequent balance-sheet and profit and loss account so prepared, and every such banking company shall display in like manner copies of its complete audited balance-sheet and profit and loss account relating to its banking business as soon as they are available, and shall keep the copies so displayed until copies of such subsequent accounts are available.
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1. Subs. by Act 20 of 19
Nothing in this Act shall apply to the preparation of accounts by a banking company and the audit and submission thereof in respect of any accounting year which has expired prior to the commencement of this Act, and notwithstanding the other provisions of this Act, such accounts shall be prepared, audited and submitted in accordance with the law in force immediately before the commencement of this Act.
(1) Notwith-standing anything contained in section 11 of the Industrial Disputes Act, 1947
(14 of 1947), or any other law for the time being in force, no banking company shall, in any proceeding under the said Act or in any appeal or other proceeding arising therefrom or connected therewith, be compelled by any authority before which such proceeding is pending to produce, or give inspection of, any of its books of account or other document or furnish or disclose any statement or information, when the banking company claims that such document, statement or information is of a confidential nature and that the production or inspection of such document or the furnishing or disclosure of such statement or information would involve disclosure of information relating to—
(a) any reserves not shown as such in its published
(1) Notwithstanding anything to the contrary contained in 1[section 235 of the Companies Act, 1956 (1 of 1956)], the Reserve Bank at any time may, and on being directed so to do by the Central Government shall, cause an inspection to be made by one or more of its officers of any banking company and its books and accounts; and the Reserve Bank shall supply to the banking company a copy of its report on such inspection.
2[(1A) (a) Notwithstanding anything to the contrary contained in any law for the time being in force and without prejudice to the provisions of sub-section (1), the Reserve Bank, at any time, may also cause a scrutiny to be made by any one or more of its officers, of the affairs of any banking company and its books and accounts; and
(b) A copy of the report of the scrutiny shall be furnished to the banking company if the b
(1) Where the Reserve Bank is satisfied that—
(a) in the 2[public interest]; or
3[(aa) in the interest of banking policy; or]
(b) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or
(c) to secure the proper management of any banking company generally,
it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions.
(1) In the case of a banking company—
(a) no amendment of any provision relating to 2[the maximum permissible number of directors or] the 3[appointment or re-appointment or termination of appointment or remuneration of a chairman, a] 4[managing director or any other director, whole-time or otherwise] or of a manager or a chief executive officer by whatever name called, whether that provision be contained in the company’s memorandum or articles of association, or in an agreement entered into by it, or in any resolution passed by the company in general meeting or by its Board of directors shall have effect unless approved by the Reserve Bank;
5[(b) no appointment or re-appointment or termination of appointment of a chairman, a managing or whole-time director, manager or chief executive officer by whatever name called, shall have effe
(1) The Reserve Bank may—
(a) caution or prohibit banking companies or any banking company in particular against entering into any particular transaction or class of transactions, and generally give advice to any banking company;
(b) on a request by the companies concerned and subject to the provision of section 1[44A], assist, as intermediary or otherwise, in proposals for the amalgamation of such banking companies;
(c) give assistance to any banking company by means of the grant of a loan or advance to it under clause (3) of sub-section (1) of section 18 of the Reserve Bank of India Act, 1934 (2 of 1934);
2[(d) 3[at any time, if it is satisfied that in the public interest or in the interest of banking policy or for preventing the affairs
(1) The provisions of section 11, sub-section (1) of section 12, and sections 17, 18, 24 and 25 shall not apply to a banking company—
(a) which, whether before or after the commencement of the Banking Companies (Amendment) Act, 1959 (33 of 1959), has been refused a licence under section 22, or prohibited from accepting fresh deposits by a compromise, arrangement or scheme sanctioned by a court or by any order made in any proceeding relating to such compromise, arrangement or scheme, or prohibited from accepting deposits by virtue of any alteration made in its memorandum; or
(b) whose licence has been cancelled under section 22, whether before or after the commencement of the Banking Companies (Amendment) Act, 1959 (33 of 1959).
(2) Where the Reserve Bank is satisfied that any such bank
(1) Where the Reserve Bank is satisfied that in the public interest or for preventing the affairs of a banking company being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of any banking company it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, 2[any chairman, director,] chief executive officer (by whatever name called) or other officer or employee of the banking company.
(2) No order under sub-section (1) shall be made 3[unless the chairman, director] or chief executive officer or other officer or employee concerned has been given a reasonable opportunity of making a representation to the Reserve Bank against the proposed order:
Provided that if, in th
1 [36AAA. Supersession of Board of directors of amulti-State co-operative bank
(1) Where the Reserve Bank is satisfied that in the publicinterest or for preventing the affairs of a multi-State co-operative bank beingconducted in a manner detrimental to the interest of the depositors of themulti-State co-operative bank or for securing the proper management of themulti-State co-operative bank, it is necessary so to do, the Reserve Bank may,for reasons to be recorded in writing, by order, supersede the Board ofdirectors of such multi-State co-operative bank for a period not exceeding fiveyears as may be specified in the order, which may be extended from time totime, so, however, that total period shall not exceed five years.
(2) The Reserve Bank may, on supersession of the Board ofdirectors of the multi-State co-operative bank under sub-sec
1 [36AAB. Order of winding up of multi-Stateco-operative bank to be final in certain cases
Where a multi-State co-operative bank, being an eligibleco-operative bank, has been registered under section 13A of the DepositInsurance and Credit Guarantee Corporation Act, 1961, as an insured bank, andsubsequently-
(a) in pursuance of a scheme prepared with the previousapproval of the Reserve Bank under section 18 of the Multi-State Co-operativeSocieties Act, 2002, an order sanctioning a scheme of compromise andarrangement or reorganisation or reconstruction has been made; or
(b) on requisition by the Reserve Bank, an order for windingup of the multi-State co-operative bank has been made under section 87 of theMulti-State Co-operative Societies Act, 2002; or
&nbs
1[36AAC. Reimbursement to Deposit Insurance Corporation by liquidator or transferee bank
Where a multi-State co-operative bank, being an insured bank within the meaning of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, is wound up and the Deposit Insurance Corporation has become liable to the depositors' of the insured bank under subsection (1) or subsection (2) of section 16 of the Act, the Deposit Insurance Corporation shall be reimbursed by the liquidator or such other person in the circumstances, to the extent and in the manner provided in section 21 of the Act.
__________________
1. Inserted by Act 24 of 2004.
(1) If the Reserve Bank is of 2[opinion that in the interest of banking policy or in the public interest or] in the interests of the banking company or its depositors it is necessary so to do, it may, from time to time by order in writing, appoint, with effect from such date as may be specified in the order, one or more persons to hold office as additional directors of the banking company:]
3[***]
(2) Any person appointed as additional director in pursuance of this section—
(a) shall hold office during the pleasure of the Reserve Bank and subject thereto for a period not exceeding three years or such further periods not exceeding three years at a time as the Reserve Bank may specify;
(b) shall not incur any obligation or liability by reason on
(1) No person shall—
(a) obstruct any person from lawfully entering or leaving any office or place of business of a banking company or from carrying on any business there, or
(b) hold, within the office or place of business of any banking company, any demonstration which is violent or which prevents, or is calculated to prevent, the transaction of normal business by the banking company, or
(c) act in any manner calculated to undermine the confidence of the depositors in the banking company.anking company."
(2) Whoever contravenes any provision of sub-section (1) without any reasonable excuse shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
&
(1) If, upon receipt of a report from the Reserve Bank, the Central Government is satisfied that a banking company—
(a) has, on more than one occasion, failed to comply with the directions given to it in writing under section 21 or section 35A, in so far as such directions relate to banking policy, or
(b) is being managed in a manner detrimental to the interests of its depositors, and that—
(i) in the interests of the depositors of such banking company, or
(ii) in the interest of banking policy, or
(iii) for the better provision of credit generally or of credit to any particular section of the community or in any particular area,
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(1) The Central Government may, after consultation with the Reserve Bank, make a scheme for carrying out the purposes of this Part in relation to any acquired bank.
(2) In particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely:—
(a) the corporation, or the company incorporated for the purpose, to which the undertaking including the property, assets and liabilities of the acquired bank may be transferred, and the capital, constitution, name and office thereof;
(b) the constitution of the first Board of management (by whatever name called) of the transferee bank, and all such matters in connection therewith or incidental thereto as the Central Government may consider to be necessary or expedien
(1) Every person who, immediately before the appointed day, is registered as a holder of shares in the acquired bank or, when the acquired bank is a banking company incorporated outside India, the acquired bank, shall be given by the Central Government, or the transferee bank, as the case may be, such compensation in respect of the transfer of the undertaking of the acquired bank as is determined in accordance with the principles contained in the Fifth Schedule.
(2) Nothing contained in sub-section (1) shall affect the rights inter se between the holder of any share in the acquired bank and any other person who may have any interest in such shares and such other person shall be entitled to enforce his interest against the compensation awarded to the holder of such share, but not against the Central Government, or the transferee bank.
(3
(1) The Central Government may, for the purpose of this Part, constitute a Tribunal which shall consist of a Chairman and two other members.
(2) The Chairman shall be a person who is, or has been, a Judge of a High Court or of the Supreme Court, and, of the two other members, one shall be a person, who, in the opinion of the Central Government, has had experience of commercial banking and the other shall be a person who is a chartered accountant within the meaning of the Chartered Accountants’ Act, 1949 (38 of 1949).
(3) If, for any reason, a vacancy occurs in the office of the Chairman or any other member of the Tribunal, the Central Government may fill the vacancy by appointing another person thereto in accordance with the provisions of sub-section (2), and any proceeding may be continued before the Tribunal, so constituted, from the
(1) The Tribunal shall have the powers of a civil court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents.
(2) Notwithstanding anything contained in sub-section (1), or in any other law for the time being in force, the Tribunal shall not compel the Central Government or the Reserve Bank,—
(a) to produce any books of account or other docu
(1) The Tribunal shall have power to regulate its own procedure.
(2) The Tribunal may hold the whole or any part of its inquiry in camera.
(3) Any clerical or arithmetical error in any order of the Tribunal or any error arising therein from any accidental slip or omission may, at any time, be corrected by the Tribunal either of its own motion or on the application of any of the parties.]
-------------------------
1. Section 36AJ ins. by Act 58 of 1968, sec. 15 (w.e.f. 1-2-1969).
--------------------------
Any appointment or removal of a director, chief executive officer or other officer or employee in pursuance of section 36AA or section 36AB shall have effect notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956) or any other law for the time being in force or in any contract or any other instrument.]
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1. Section 36AC ins. by Act 55 of 1963, sec. 18 (w.e.f. 1-2-1964).
---------------
1[(1) Where the Reserve Bank is satisfied, in consultation with the Central Government, that in the public interest or for preventing the affairs of any banking company being conducted in a manner detrimental to the interest of the depositors or any banking company or for securing the proper management of any banking company, it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing, by order, supersede the Board of Directors of such banking company for a period not exceeding six months as may be specified in the order:
Provided that the period of supersession of the Board of Directors may be extended from time to time, so, however, that the total period shall not exceed twelve months.
(2) The Reserve Bank may, on supersession of the Board of Directors of the banking company under sub-section (1) appoint in co
In this Part and in Part IIIA “High Court”, in relation to a banking company, means the High Court exercising jurisdiction in the place where the registered office of the banking company is situated or, in the case of a banking company incorporated outside India, where its principal place of business in India is situated.]
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1. Ins. by Act 52 of 1953, sec. 3 (w.e.f. 30-12-1953).
2. Section 36A renumbered as section 36B by Act 33 of 1959, sec. 24 (w.e.f. 1-10-1959).
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(1) The 1[High Court] may on the application of a banking company which is temporarily unable to meet its obligations make an order (a copy of which it shall cause to be forwarded to the Reserve Bank) staying the commencement or continuance of all actions and proceedings against the company for a fixed period of time on such terms and conditions as it shall think fit and proper, and may from time to time extend the period so however that the total period of moratorium shall not exceed six months.
(2) No such application shall be maintainable unless it is accompanied by a report of the Reserve Bank indicating that in the opinion of the Reserve Bank the banking company will be able to pay its debts if the application is granted:
Provided that the 1[High Court] may, for sufficient reasons, grant relief under this section even if the applic
(1) Notwithstanding anything contained in section 391, section 392, section 433 and section 583 of the Companies Act, 1956 (1 of 1956), but without prejudice to its powers under sub-section (1) of section 37 of this Act, the High Court shall order the winding up of a banking company—
(a) if the banking company is unable to pay its debts; or
(b) if an application for its winding up has been made by the Reserve Bank under section 37 or this section.
(2) The Reserve Bank shall make an application under this section for the winding up of a banking company if it is directed so to do by an order under clause (b) of sub-section (4) of section 35.
(3) The Reserve Bank may make an application under this section for the winding up of a banking company—
(1) There shall be attached to every High Court a Court liquidator to be appointed by the Central Government for the purpose of conducting all proceedings for the winding up of banking companies and performing such other duties in reference thereto as the High Court may impose.
2[***]
(4) Where having regard to the number of banking companies wound up and other circumstances of the case, the Central Government is of opinion that it is not necessary or expedient to attach for the time being a Court liquidator to a High Court, it may, from time to time, by notification in the Official Gazette, direct that this section shall not have effect in relation to that High Court.]
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1. Ins. by Act 52 o
2[(1)] Notwithstanding anything contained in section 38A of this Act or in section 448 or section 449 of the Companies Act, 1956 (1 of 1956), where in any proceeding for the winding up by the High Court of a banking company, an application is made by the Reserve Bank in this behalf, the Reserve Bank, the State Bank of India or any other bank notified by the Central Government in this behalf or any individual, as stated in such application shall be appointed as the official liquidator of the banking company in such proceeding and the liquidator, if any, functioning in such proceeding shall vacate office upon such appointment.]
3[(2) Subject to such directions as may be made by the High Court, the remuneration of the official liquidator appointed under this section, the cost and expenses of this establishment and the cost and expenses of the winding up shall be met out of the asse
(1) All the provisions of the Companies Act, 1956 (1 of 1956), relating to a liquidator, in so far as they are not inconsistent with this Act, shall apply to or in relation to a liquidator appointed under section 38A or section 39.
(2) Any reference to the “official liquidator” in this Part and Part IIIA shall be construed as including a reference to any liquidator of a banking company.]
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1. Ins. by 33 of 1959, sec. 28 (w.e.f. 1-10-1959).
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Notwithstanding anything to the contrary contained in 1[section 466 of the Companies Act, 1956 (1 of 1956)], the 2[High Court] shall not make any order staying the proceedings in relation to the winding up of a banking company, unless the 2[High Court] is satisfied that an arrangement has been made whereby the company can pay its depositors in full as their claims accrue.
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1. Subs. by Act 95 of 1956, sec. 14 and Sch., for "section 173 of the Indian Companies Act, 1913 (7 of 1913)" (w.e.f. 14-1-1957).
2. Subs. by Act 52 of 1953, sec. 4, for "Court" (w.e.f. 30-12-1953).
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Notwithstanding anything to the contrary contained in section 455 of the Companies Act, 1956 (1 of 1956), where a winding up order has been made in respect of a banking company whether before or after the commencement of the Banking Companies (Second Amendment) Act, 1960 (37 of 1960), the official liquidator shall submit a preliminary report to the High Court within two months from the date of the winding up order or where the winding up order has been made before such commencement, within two months from such commencement, giving the information required by that section so far as it is available to him and also stating the amount of assets of the banking company in cash which are in his custody or under his control on the date of the report and the amount of its assets which are likely to be collected in cash before the expiry of that period of two months in order that such assets may be applied speedily towards the making
(1) Within fifteen days from the date of the winding up order of a banking company or where the winding up order has been made before the commencement of the Banking Companies (Second Amendment) Act, 1960 (37 of 1960), within one month from such commencement, the official liquidator shall, for the purpose of making an estimate of the debts and liabilities of the banking company (other that its liabilities and obligations to its depositors), by notice served in such manner as the Reserve Bank may direct, call upon—
(a) every claimant entitled to preferential payment under section 530 of the Companies Act, 1956 (1 of 1956), and
(b) every secured and every unsecured creditor,
to send to the official liquidator within one month from the date of the service of the notice a statement of the amo
Notwithstanding anything to the contrary contained in 1[2[section 460] of the Companies Act, 1956 (1 of 1956)], the 3[High Court] may, in the proceedings for winding up a banking company, dispense with any meetings of creditors or contributories 4[***] if it considers that no object will be secured thereby sufficient to justify the delay and expense.
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1. Subs. by Act 95 of 1956, sec. 14 and Sch., for ‘‘sections 178A and 183 of the Indian Companies Act, 1913 (7 of 1913)’’ (w.e.f. 14-1-1957).
2. Subs. by Act 1 of 1984, sec. 33, for ‘‘sections 460, 464 and 465’’ (w.e.f. 15-2-1984).
3. Subs. by Act 52 of 1953, sec. 4, for ‘‘Court’’ (w.e.f. 30-12-1953).
4.
In any proceeding for the winding up of a banking company, every depositor of the banking company shall be deemed to have filed his claim for the amount shown in the books of the banking company as standing to his credit and, notwithstanding anything to the contrary contained in 2[section 474 of the Companies Act, 1956 (1 of 1956)], the High Court shall presume such claims to have been proved, unless the official liquidator shows that there is reason for doubting its correctness.]
---------------------------------------------
1. Subs. by Act 52 of 1953, sec. 8, for section 43 (w.e.f. 30-12-1953).
2. Subs. by Act 95 of 1956, sec. 14 and Sch., for ‘‘section 191 of the Indian Companies Act, 1913 (7 of 1913)’’ (w.e.f. 14-1-1957).
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(1) In every proceeding for the winding up of a banking company where a winding up order has been made, whether before or after the commencement of the Banking Companies (Second Amendment) Act, 1960, (37 of 1960) within three months from the date of the winding up order or where the winding up order has been made before such commencement, within three months therefrom, the preferential payments referred to in section 530 of the Companies Act, 1956 (1 of 1956), in respect of which statements of claims have been sent within one month from the date of the service of the notice referred to in section 41A, shall be made by the official liquidator or adequate provision for such payments shall be made by him.
(2) After the preferential payments as aforesaid have been made or adequate provision has been made in respect thereof, there shall be paid within the aforesaid period of three m
(1) Notwithstanding anything to the contrary contained in section 484 of the Companies Act, 1956 (1 of 1956), no banking company may be voluntarily wound up unless the Reserve Bank certifies in writing that the company is able to pay in full all its debts to its creditors as they accrue.
(2) The High Court may, in any case where a banking company is being wound up voluntarily, make an order that the voluntary winding up shall continue, but subject to the supervision of the court.
(3) Without prejudice to the provisions contained in sections 441 and 521 of the Companies Act, 1956 (1 of 1956), the High Court may of its own motion and shall on the application of the Reserve Bank, order the winding up of a banking company by the High Court in any of the following cases, namely:—
(a) where the
(1) Notwith-standing anything contained in any law for the time being in force, no banking company shall be amalgamated with another banking company, unless a scheme containing the terms of such amalgamation has been placed in draft before the shareholders of each of the banking companies concerned separately, and approved by a resolution passed by a majority in number representing two-thirds in value of the shareholders of each of the said companies, present either in person or by proxy at a meeting called for the purpose.
(2) Notice of every such meeting as is referred to in sub-section (1) shall be given to every shareholder of each of the banking companies concerned in accordance with the relevant articles of association indicating the time, place and object of the meeting, and shall also be published atleast once a week for three consecutive weeks in not less than two newspa
3[(1)] Notwithstanding anything contained in any law for the time being in force, no 4[High Court] shall sanction a compromise or arrangement between a banking company and its creditors or any class of them or between such company and its members or any class of them 5[or sanction any modification in any such compromise or arrangement unless the compromise or arrangement or modification, as the case may be,] is certified by the Reserve Bank 6[in writing as not being incapable of being worked and as not being detrimental to the interests of the depositors of such banking company].]
7[(2) Where an application under 8[section 391 of the Companies Act, 1956 (1 of 1956)], is made in respect of a banking company, the High Court may direct the Reserve Bank to make an inquiry in relation to the affairs of the banking company and the conduct of its directors and when such direction is giv
(1) Notwithstanding anything contained in the foregoing provisions of this Part or in any other law or 2[any agreement or other instrument], for the time being in force, where it appears to the Reserve Bank that there is good reason so to do, the Reserve Bank may apply to the Central Government for an order of moratorium in respect of 3[a banking company].
(2) The Central Government, after considering the application made by the Reserve Bank under sub-section (1), may make an order of moratorium staying the commencement or continuance of all actions and proceedings against the company for a fixed period of time on such terms and conditions as it thinks fit and proper and may from time to time extend the period so however that the total period of moratorium shall not exceed six months.
(3) Except as otherwise provided by any directions g
The provisions of this Part and the rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in the 2[Companies Act, 1956 (1 of 1956)] or the Code of Civil Procedure, 1908 (5 of 1908), or the 3[Code of Criminal Procedure, 1973 (2 of 1974)] or any other law for the time being in force or any instrument having effect by virtue of any such law; but the provisions of any such law or instrument in so far as the same are not varied by, or inconsistent with, the provisions of this Part or rules made thereunder shall apply to all proceedings under this Part.]
---------------------------
1. Part IIIA (containing section 45A) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
&nbs
The High Court shall, save as otherwise expressly provided in section 45C, have exclusive jurisdiction to entertain and decide any claim made by or against a banking company which is being wound up (including claims by or against any of its branches in India) or any application made under 2[section 391 of the Companies Act, 1956 (1 of 1956)] by or in respect of a banking company or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of a banking company, whether such claim or question has arisen or arises or such application has been made or is made before or after the date of the order for the winding up of the banking company or before or after the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953).]
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&nb
(1) Where a winding up order is made or has been made in respect of a banking company, no suit or other legal proceeding, whether civil or criminal, in respect of which the High Court has jurisdiction under this Act and which is pending in any other court immediately before the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953), or the date of the order for the winding up of the banking company, whichever is later, shall be proceeded with except in the manner hereinafter provided.
(2) The official liquidator shall, within three months from the date of the winding up order or the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953), whichever is later, or such further time as the High Court may allow, submit to the High Court a report containing a list of all such pending proceedings together with particulars thereof.
(1) Notwithstanding anything to the contrary contained in any law for the time being in force, the High Court may settle in the manner hereinafter provided a list of debtors of a banking company which is being wound up.
(2) Subject to any rules that may be made under section 52, the official liquidator shall, within six months from the date of the winding up order or the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953), whichever is later, from time to time, file to the High Court lists of debtors containing such particulars as are specified in the Fourth Schedule:
Provided that such lists may, with the leave of the High Court, be filed after the expiry of the said period of six months.
(3) On receipt of any list under sub-section (2), the High Court shall, wherever ne
Notwithstanding that the list of the contributories has not been settled under 2[section 467 of the Companies Act, 1956 (1 of 1956)], the High Court may, if it appears to it necessary or expedient so to do, at any time after making a winding up order, make a call on and order payment thereof by any contributory under sub-section (1) of 3[section 470 of the Companies Act, 1956 (1 of 1956)], if such contributory has been placed on the list of contributories by the official liquidator and has not appeared to dispute his liability.
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1. Part IIIA (containing section 45E) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
2. Subs. by Act 95 of 1956, s
(1) Entries in the books of account or other documents of a banking company which is being wound up shall be admitted in evidence in all 2[legal proceedings]; and all such entries may be proved either by the production of the books of account or other documents of the banking company containing such entries or by the production of a copy of the entries, certified by the official liquidator under his signature and stating that it is a true copy of the original entries and that such original entries are contained in the books of account or other documents of the banking company in his possession.
(2) Notwithstanding anything to the contrary contained in the Indian Evidence Act, 1872 (1 of 1872), all such entries in the books of account or other documents of a banking company shall, as against the directors, 3[officers and other employees] of the banking company in respect of which th
(1) Where an order has been made for the winding up of a banking company, the official liquidator shall submit a report whether in his opinion any loss has been caused to the banking company since its formation by any act or omission (whether or not a fraud has been committed by such act or omission) of any person in the promotion or formation of the banking company or of any director or auditor of the banking company.
(2) If, on consideration of the report submitted under sub-section (1), the High Court is of opinion that any person who has taken part in the promotion or formation of the banking company or has been a director or an auditor of the banking company should be publicly examined, it should hold a public sitting on a date to be appointed for that purpose and direct that such person, director or auditor shall attend thereat and shall be publicly examined as to the promo
(1) Where an application is made to the High Court under 1[section 543 of the Companies Act, 1956 (1 of 1956)], against any promoter, director, manager, liquidator or officer of a banking company for repayment or restoration of any money or property and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part:
Provided that where such an order is made jointly against two or more such persons, they shall be jointly and severally liable to make the repayment or restoration of the money or property.
(2) Where an application is made, to the High Court under 2[section 543 of the Companies Act, 1956 (1 of 1956)], and the High Court has reaso
Every director or other officer of a banking company which is being wound up shall give such assistance to the official liquidator as he may reasonably require in connection with the realisation and distribution of the property of the banking company.]
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1. Part IIIA (containing section 45-I) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
(1) The High Court may, if it thinks fit, take cognizance of and try in a summary way any offence alleged to have been committed by any person who has taken part in the promotion or formation of the banking company which is being wound up or by any director, manager or officer thereof:
Provided that the offence is one punishable under this Act or under the 2[Companies Act, 1956 (1 of 1956)].
(2) When trying any such offence as aforesaid, the High Court may also try any other offence not referred to in sub-section (1) which is an offence with which the accused may, under the 3[Code of Criminal Procedure, 1973 (2 of 1974)], be charged at the same trial.
(3) In any case tried summarily under sub-section (1), the High Court—
(a) need not summon any w
[Rep. by the Banking Companies (Amendment) Act, 1959 (33 of 1959), sec. 31 (w.e.f. 1-10-1959).]
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1. Part IIIA (containing section 45K) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
(1) Where an application for sanction a compromise or arrangement in respect of a banking company is made under 1[section 391 of the Companies Act, 1956 (1 of 1956)], or where such sanction has been given and the High Court is of opinion, whether on a report of the Reserve Bank or otherwise, that any person who has taken part in the promotion or formation of the banking company or has been a director or auditor of the banking company should be publicly examined, it may direct such examination of such person and the provisions of section 45G shall, as far as may be, apply to the banking company as they apply to a banking company which is being wound up.
(2) Where a compromise or arrangement is sanctioned under 2[section 391 of the Companies Act, 1956 (1 of 1956)], in respect of a banking company, the provisions of 3[section 543 of the said Act] and of section 45H of this Act shall,
Where any compromise or arrangement sanctioned in respect of a banking company under 2[section 391 of the Companies Act, 1956 (1 of 1956)] is being worked at the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953) the High Court may, if it so thinks fit, on the application of such banking company,—
(a) excuse any delay in carrying out any of the provisions of the compromise or arrangement; or
(b) allow the banking company to settle the list of its debtors in accordance with the provisions of section 45D and in such a case, the provisions of the said section shall, as far as may be, apply to the banking company as they apply to a banking company which is being wound up as if the order sanctioning the compromise or arrangement were an order for the winding up of the banking company.]
&nb
(1) An Appeal shall lie from any order or decision of the High Court in a civil proceeding under this Act when the amount or value of the subject-matter of the claim exceeds five thousand rupees.
(2) The High Court may by rules provide for an appeal against any order made under section 45J and the conditions subject to which any such appeal would lie.
(3) Subject to the provisions of sub-section (1) and sub-section (2) and notwithstanding anything contained in any other law for the time being in force, every order or decision of the High Court shall be final and binding for all purposes as between the banking company on the one hand, and all persons who are parties thereto and all persons claiming through or under them or any of them, on the other hand.]
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&nb
(1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (9 of 1908) or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of the presentation of the petition for the winding up of the banking company shall be excluded.
(2) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (9 of 1908) or 2[section 543 of the Companies Act, 1956 (1 of 1956)] or in any other law for the time being in force, there shall be no period of limitation for the recovery of arrears of calls from any director of a banking company which is being wound up or for the enforcement by the banking company against any of its directors of any claim based on a contract, express or implied; and in respe
Where in any proceeding for the winding up of a banking company in which any person other than the Reserve Bank has been appointed as the official liquidator and the High Court has directed the official liquidator to obtain the advice of the Reserve Bank on any matter (which it is hereby empowered to do), it shall be lawful for the Reserve Bank to examine the record of any such proceeding and tender such advice on the matter as it may think fit.]
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1. Part IIIA (containing section 45P) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
(1) The Reserve Bank shall, on being directed so to do by the Central Government or by the High Court, cause an inspection to be made by one or more of its officers of a banking company which is being wound up and its books and accounts.
(2) On such inspection, the Reserve Bank shall submit its report to the Central Government and the High Court.
(3) If the Central Government, on consideration of the report of the Reserve Bank, is of opinion that there has been a substantial irregularity in the winding up proceedings, it may bring such irregularity to the notice of the High Court for such action as the High Court may think fit.
(4) On receipt of the report of the Reserve Bank under sub-section (2) or on any irregularity being brought to its notice by the Central Government under sub-section (
The Reserve Bank may, at any time by a notice in writing, require the liquidator of a banking company to furnish it, within such time as may be specified in the notice or such further time as the Reserve Bank may allow, any statement or information relating to or connected with the winding up of the banking company; and it shall be the duty of every liquidator to comply with such requirements.
Explanation.—For the purposes of this section and section 45Q, a banking company working under a compromise or arrangement but prohibited from receiving fresh deposits, shall, as far as may be, deemed to be banking company which is being wound up.]
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1. Part IIIA (containing section 45R) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act
(1) For the purpose of enabling the official liquidator or the special officer appointed under sub-section (3) of section 37 to take into his custody or under his control, all property, effects and actionable claims to which a banking company 1[***] is or appears to be entitled, the official liquidator or the special officer, as the case may be, may request in writing the 2[Chief Metropolitan Magistrate orthe Chief Judicial Magistrate], within whose jurisdiction any property, books of accounts or other documents of such banking company may be situate or be found, to take possession thereof, and the 2[Chief Metropolitan Magistrate or the Chief Judicial Magistrate], as the case may be, shall, on such request being made to him,—
3[(a) take possession of such property, books of accounts or other documents, and
(1) All orders made in any civil proceeding by a High Court may be enforced in the same manner in which decrees of such court made in any suit pending therein may be enforced.
(2) Notwithstanding anything to the contrary contained in the Code of Civil
Procedure, 1908 (5 of 1908), a liquidator may apply for the execution of a decree by a court, other than the one which made it on production of a certificate granted under sub-section (6) of section 45D and on his certifying to such other court in writing the amount remaining due or relief remaining unenforced under the decree.
(3) Without prejudice to the provisions of sub-section (1) or sub-section (2), any amount found due to the banking company by an order or decision of the High Court, may, with the leave of the High Court, be recovered 1
The High Court may make rules consistent with this Act and the rules made under section 52 prescribing—
(a) the manner in which inquiries and proceedings under Part III or Part IIIA may be held;
(b) the offences which may be tried summarily;
(c) the authority to which, and the conditions subject to which, appeals may be preferred and the manner in which such appeals may be filed and heard;
(d) any other matter for which provision has to be made for enabling the High Court to effectively exercise its functions under this Act.]
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1. Part IIIA (containing section 45U) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earli
For the removal of doubts it is hereby declared that any reference in this Part to a director, manager, liquidator, officer or auditor of a banking company shall be construed as including a reference to any past or present director, manager, liquidator, officer or auditor of the banking company.]
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1. Part IIIA (containing section 45V) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
Nothing contained in Part II shall apply to a banking company which is being wound up.]
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1. Part IIIA (containing section 45W) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
Notwithstanding anything contained in section 45B or any other provision of this Part or in section 11 of the Banking Companies (Amendment) Act, 1950 (20 of 1950), no proceeding held, judgment delivered or decree or order made before the commencement of the Banking Companies (Amendment) Act, 1953 (52 of 1953), by any court other than the High Court in respect of any matter over which the High Court has jurisdiction under this Act shall be invalid or be deemed ever to have been invalid merely by reason of the fact that such proceeding, judgment, decree or order was held, delivered or made by a court other than the High Court.]
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1. Part IIIA (containing section 45X) subs. by Act 52 of 1953, sec. 10, for Part IIIA (w.e.f. 30-12-1953). Earlier Part IIIA was ins. by Act 20 of 1950, sec. 10 (w.e.f. 18-3-1950).
The Central Government may, after consultation with the Reserve Bank and by notification in the Official Gazette, make rules specifying the periods for which—
(a) a banking company shall preserve its books, accounts and other documents; and
(b) a banking company shall preserve and keep with itself different instruments paid by it.]
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1. Sections 45Y ins. by Act 1 of 1984, sec. 37 (w.e.f. 29-3-1985).
(1) Where a banking company is required by its customer to return to him a paid instrument before the expiry of the period specified by rules made under section 45Y, the banking company shall not return the instrument except after making and keeping in its possession a true copy of all relevant parts of such instrument, such copy being made by a mechanical or other process which in itself ensures the accuracy of the copy.
(2) The banking company shall be entitled to recover from the customer the cost of making such copies of the instrument.
Explanation.—In this section, “customer” includes a Government department and a corporation incorporated by or under any law.]
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1. Sections 45Z ins. by Act 1 of 1984, sec. 37 (w.e.f
(1) Where a deposit is held by a banking company to the credit of one or more persons, the depositor or, as the case may be, all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the banking company.
(2) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made in the prescribed manner purports to confer on any person the right to receive the amount of deposit from the banking company, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, i
Section 45(z)(a) of the Banking Regulation Act, 1949, establishes the legal framework for nomination by depositors in banks, allowing depositors to designate a nominee to receive the deposit amount upon their death. This provision aims to facilitate smooth transfer of funds and reduce legal complications for heirs.
Section 45ZA(2) (noting the likely typographical reference as 45ZA) states that where a deposit is held by a banking company in the credit of one or more persons, the depositor can nominate in the prescribed manner a person to whom the deposit may be paid upon death. The nominated person, upon the death of the depositor(s), becomes entitled to the deposit rights to the exclusion of all others, unless the nomination is varied or canceled in the prescribed manner.
Note: The references are based on the provided sources, primarily focusing on the legal provisions and judicial interpretations related to Section 45ZA of the Banking Regulation Act, 1949.
No notice of the claim of any person, other than hirer or hirers of a locker, shall be receivable by a banking company nor shall the banking company be bound by any such notice even though expressly given to it:
Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to the locker or its contents is produced before the banking company, the banking company shall take due note of such decree, order, certificate or other authority.]
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1. Sections 45ZF ins. by Act 1 of 1984, sec. 37 (w.e.f. 29-3-1985).
No notice of the claim of any person, other than the person or persons in whose name a deposit is held by a banking company, shall be receivable by the banking company, nor shall the banking company be bound by any such notice though even expressly given to it:
Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before a banking company, the banking company shall take due note of such decree, order, certificate or other authority.]
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1. Sections 45ZB ins. by Act 1 of 1984, sec. 37 (w.e.f. 29-3-1985).
(1) Where an individual is the sole hirer of a locker from a banking company, whether such locker is located in the safe deposit vault of such banking company or elsewhere, such individual may nominate one person to whom, in the event of the death of such individual, the banking company may give access to the locker and liberty to remove the contents of the locker.
(2) Where any such locker is hired from a banking company by two or more individuals jointly and under the contract of hire, the locker is to be operated under the joint signatures of two or more of such hirers, such hirers may nominate one or more persons to whom, in the event of the death of such joint hirer or hirers, the banking company may give, jointly with the surviving joint hirer or joint hirers, as the case may be, access to the locker and liberty to remove the contents of such locker.
&nb
No notice of the claim of any person, other than the person or persons in whose name any article is held by a banking company in safe custody, shall be receivable by the banking company, nor shall the banking company be bound by any such notice even though expressly given to it:
Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such article is produced before a banking company, the banking company shall take due note of such decree, order, certificate or other authority.]
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1. Sections 45ZD ins. by Act 1 of 1984, sec. 37 (w.e.f. 29-3-1985).
(1) Where any person leaves any article in safe custody with a banking company, such person may nominate, in the prescribed manner, on person to whom, in the event of the death of the person leaving the article in safe custody, such article may be returned by the banking company.
(2) Where the nominee is a minor, it shall be lawful for the person making the nomination to appoint in the prescribed manner any person to receive the article deposited in the event of his death during the minority of the nominee.
(3) The banking company shall, before returning any articles under this section to the nominee or the person appointed under sub-section (2), prepare, in such manner as may be directed by the Reserve Bank from time to time, an inventory of the said articles which shall be signed by such nominee or person and shall deliver a copy of th
(1) Whoever in any return, balance-sheet or other document 1[or in any information required or furnished] by or under or for the purposes of any provision of this Act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.
(2) If any person fails to produce any book, account or other document or to furnish any statement or information which under sub-section (2) of section 35 it is his duty to produce or furnish, or to answer any question relating to the business of a banking company which is asked by 2[an officer making an inspection or scrutiny under that section] he shall be punishable with a fine which may extend to 3[two thousand rupees] in respect of each offence, and if he p
Section 46 of the Banking Regulation Act, 1949, prescribes penalties for contraventions of the Act, including false statements, misrepresentations, and non-compliance with directives issued by the Reserve Bank of India (RBI). It underscores the importance of maintaining integrity in banking operations and empowers RBI to enforce compliance through penalties, including fines and imprisonment. The section also clarifies the liability of bank officials, especially those deemed as public servants, for violations committed in official capacity.
Section 46 delineates penalties for various contraventions related to banking operations, such as wilful false statements, omissions of material facts, and violations of directives or orders issued under the Act. It provides for imprisonment up to three years, fines up to one crore rupees, or both. Subsection (1) specifically penalizes false statements knowingly made in documents or information furnished for the purposes of the Act. Subsections (2) and (4) address failure to produce documents and other violations, respectively. The section also empowers RBI to impose penalties for non-compliance.
In summary, Section 46 of the Banking Regulation Act, 1949, functions as a vital statutory tool to ensure transparency, accountability, and integrity in banking operations. It empowers RBI to impose penalties for violations, especially false statements and non-compliance with directives, with provisions for imprisonment and fines. The section also clarifies the liability of bank officials deemed as public servants, emphasizing the importance of honest conduct in the banking sector. Courts have reaffirmed the statutory force of RBI directives and the necessity of mens rea for criminal liability, ensuring a balanced approach towards enforcement and safeguarding the rights of accused persons.
2[Every chairman who is appointed on a whole-time basis, managing director, director, auditor], liquidator, manager and any other employee of a banking company shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code (45 of 1860).]
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1. Ins. by Act 95 of 1956, sec. 10 (w.e.f. 14-1-1957).
2. Subs. by Act 20 of 1994, sec. 9, for “Every chairman, director, auditor” (w.e.f. 31-1-1994).
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No court shall take a cognizance of any offence punishable under 1[sub-section (5) of section 36AA or] section 46 except upon complaint in writing made by an officer of 2[the Reserve Bank or, as the case may be, the National Bank] generally or specially authorised in writing in this behalf by 2[the Reserve Bank, or as the case may be, the National Bank] and 3[no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court superior thereto] shall try any such offence.
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1. Ins. by Act 55 of 1963, sec. 26 (w.e.f. 1-2-1964).
2. Subs. by Act 61 of 1981, sec. 61 and Second Sch., Pt. II, for “the Reserve Bank” (w.e.f. 1-5-1982).
3.
(1) Notwithstanding anything contained in section 46, if a contravention or default of the nature referred to in sub-section (3) or sub-section (4) of section 46, as the case may be, is made by a banking company, then, the Reserve Bank may impose on such banking company—
(a) where the contravention is of the nature referred to in sub-section (3) of section 46, a penalty not exceeding twice the amount of the deposits in respect of which such contravention was made;
(b) where the contravention or default is of the nature referred to in sub-section (4) of section 46, a penalty not exceeding 2[five lakh rupees or twice the amount involved in such contravention or default where such amount is quantifiable, whichever is more, and where such the contravention or default is a continuing one, a further penalty which may extend to twenty-f
A court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the rewarding of the person on whose information the fine is recovered.
The exemptions, whether express or implied, in favour of a private company in 1[sections 90, 165, 182, 204 and 255, clauses (a) and (b) of sub-section (1) of section 293 and sections 300, 388A and 416 of the Companies Act, 1956 (1 of 1956)], shall not operate in favour of a private company which is a banking company.
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1. The words and figures “sections 17, 77, 83B, 86H, 91B and 91D and sub-section (5) of section 144 of the Indian Companies Act, 1913 (7 of 1913)” have successively been amended by Act 95 of 1956, sec. 11, Act 33 of 1959, sec. 34 and Act 55 of 1963, sec. 27 to read as above.
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No person other than a banking company, the Reserve Bank, the State Bank of India or any other 2[banking institution, firm or other person notified by the Central Government in this behalf on the recommendation of the Reserve Bank] shall accept from the public deposits of money withdrawable by cheque:
Provided that nothing contained in this section shall apply to any savings bank scheme run by the Government.]
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1. Ins. by Act 33 of 1959, sec. 35 (w.e.f. 1-10-1959).
2. Subs. by Act 55 of 1963, sec. 28, for certain words (w.e.f. 1-2-1964).
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Notwithstanding anything contained in section 21 of the Companies Act, 1956 (1 of 1956), the Central Government shall not signify its approval to the change of name of any banking company unless the Reserve Bank certifies in writing that it has no objection to such change.]
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1. Ins. by Act 33 of 1959, sec. 35 (w.e.f. 1-10-1959).
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Notwith-standing anything contained in the Companies Act, 1956 (1 of 1956), no application for the confirmation of the alteration of the memorandum of a banking company shall be maintainable unless the Reserve Bank certifies that there is no objection to such alteration.]
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1. Ins. by Act 33 of 1959, sec. 35 (w.e.f. 1-10-1959).
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No person shall have any right, whether in contract or otherwise, to any compensation for any loss incurred by reason of the operation of any of the provisions 1[contained in sections 10, 12A, 16, 35A, 35B, 2[36, 43A and 45] or by reason of the compliance by a banking company with any order or direction given to it under this Act].
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1. Subs. by Act 95 of 1956, sec. 12, for certain words (w.e.f. 14-1-1957).
2. Subs. by Act 37 of 1960, sec. 8, for “and 36” (w.e.f. 19-9-1960).
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2[(1)] Without prejudice to the provisions of the State Bank of India Act, 1955 (23 of 1955) or any other enactment, the provisions of sections 10, 13 to 15, 17, 3[19 to 21A, 23 to 28, 29] excluding sub-section (3) 4[sub-section (1B), (1C) and (2) of sections 30, 31,] 34, 35, 35A, 36 [excluding clause (a) of sub-section (1)] 45Y to 45ZF, 46 to 48] 50, 52 and 53 shall also apply; so far as may be, to and in relation to the State Bank of India 5[or any corresponding new bank or a Regional Rural Bank or any subsidiary bank] as they apply to and in relation to banking companies:
6[Provided that—
(a) nothing contained in clause (c) of sub-section (1) of section 10 shall apply to the chairman of the State Bank of India or to a 7[managing director] of any subsidiary bank insofar as the said clause precludes him from being a director of, or ho
(1) The Central Government may, after consultation with the Reserve Bank, make rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act and all such rules shall be published in the Official Gazette.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for the details to be included in the returns required by this Act and the manner in which such returns shall be submitted 1[and the form in which the official liquidator may file lists of debtors to the court having jurisdiction under Part III or Part IIIA and the particulars which such lists may contain and any other matter which has to be, or may be, prescribed].
2[***]
1[(4) The Central Government may by ru
1[1] The Central Government may, on the recommendation of the Reserve Bank, declare, by notification in the Official Gazette, that any or all of the provisions of this Act shall not apply to any 2[banking company or institution or to any class of banking companies 3[***]] either generally or for such period as may be specified.
4[(2) 5[A copy of every notification proposed to be issued under sub-section (1) relating to any banking company or institution or any class of banking companies or any branch of a banking company or an institution, as the case may be, functioning or located in any Special Economic Zone established under the Special Economic Zones Act, 2005 (28 of 2005) shall be laid in draft before each House of Parliament], while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before t
(1) No suit or other legal proceeding shall be lie against the Central Government, the Reserve Bank or any officer for anything which is in good faith done or intended to be done in pursuance of this Act.
(2) Save as otherwise expressly provided by or under this Act, no suit or other legal proceeding shall lie against the Central Government, the Reserve Bank or any officer for any damage caused or likely to be caused by anything in good faith done or intended to be done in pursuance of this Act.
The Reserve Bank of India Act, 1934 shall be amended in the manner specified in the fourth column of the First Schedule, and the amendments to section 18 thereof as specified in the said Schedule shall be deemed to have had effect on and from the 20th day of September, 1947.
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, as occasion requires, do anything (not inconsistent with the provisions of this Act) which appears to it to be necessary for the purpose of removing the difficulty:
Provided that no such power shall be exercised after the expiry of a period of three years from the commencement of section 20 of the Banking Laws (Amendment) Act, 1968 (58 of 1968).]
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1. Ins. by Act 58 of 1968, sec. 20 (w.e.f. 1-2-1969).
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