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THE RESERVE BANK OF INDIA ACT, 1934

Title : THE RESERVE BANK OF INDIA ACT, 1934

Year : 1934



The Bank shall undertake to accept monies for account of 1*[2* the Central Government 3 [***] and to make payments up to the amount standing to the credit of 4*[its account], and to carry out 5 [its exchange], remittance and other banking operations, including the management of the public debt 6*[of the Union].
7 [***]

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1. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for certain words.

2. The words " the Secretary of State" omitted by the A.O. 1950.

3. The words "and the Governments of Part A States" omitted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

4. Substituted by Act 37 of 1956, section104, for "their account respectively" (w.e.f. 1-11-1956).

5. Substituted by Act 37 of 1956, section104, for "their exchange" (w.e.f. 1-11-1956).

6. Inserted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

7. Section 20A (Transaction of business for British Military Administration, Burma) which was temporarily Inserted by Ordinance 19 of 1945 has been omitted owing to the repeal of the Ordinance by Act 11 of 1947, section 27 (w.e.f. 1-4-1947).

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(1) The 1*[Central Government] 2[***] shall entrust the Bank, on such conditions as may be agreed upon, with all 3*[its] money, remittance, exchange and banking transaction in India, and, in particular, shall deposit free of interest all 4*[its] cash balances with the Bank:

Provided
that nothing in this sub-section shall prevent the 4* [Central Government] 5[***] from carrying on money transactions at places where the Bank has no branches or agencies, and the 4* [Central Government] 2 [***] may hold at such places such balances as 6 [it] may require.

(2) The 4*[Central Government] 7 [***] shall entrust the Bank, on such conditions as may be agreed upon, with the management of the public debt and with the issue of any new loans.

(3) In the event of any failure to reach agreement on the conditions referred to in this section the 4*[Central Government] shall decide what the conditions shall be.

8*[(4) Any agreement made under this section shall be laid, as soon as may be after it is made, before Parliament.]

9[***]

21A - 10* Bank to transact Government business of States on agreement

(1) The Bank may by agreement with the Government of any 11 [***] State 12[***] undertake-

(a) All its money, remittance, exchange and banking transactions in India, including in particular, the deposit, free of interest, of all its cash balances with the Bank; and

(b) The management of the public debt of, and the issue of any new loans by, that State.

(2) Any Agreement made under this section shall be laid, as soon as may be after it is made, before Parliament.]

21B -13* Effect of agreements made between the Bank and certain States before the 1st November, 1956

(1) Any agreement made under section 21 or section 21A between the Bank and the Government of a State specified in the Explanation below and in force immediately before the 1st day of November, 1956, shall, as from that day have effect as if it were an agreement made on that day under section 21A between the Bank and the Government of the corresponding State subject to such modifications, if any, being of a character not affecting the general operation of the agreement, as may be agreed upon between the Bank and the Government of the corresponding State, or in default of such agreement, as may be made therein by order of the Central Government.

Explanation.-In this sub-section "corresponding State" means,-

(a) In relation to the agreement between the Bank and the State of Andhra, the State of Andhra Pradesh;

(b) In relation to the agreement between the Bank and any other Part A State as it existed before the 1st day of November, 1956, the State with the same name; and

(c) In relation to the agreement between the Bank and the Part B State of Mysore or Travancore-Cochin as it existed before the 1st day of November, 1956, the State of Mysore of Kerala respectively.

(2) Any agreement made under section 21A between the Bank and the Government of the Part B State of Hyderabad, Madhya Bharat or Saurashtra shall be deemed to have terminated on the 31st day of October, 1956.]

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1. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

2. The words "and the State Governments" omitted by Act 37 of 1956, section 104, (w.e.f. 1-11-1956).

3. Substituted by Act 37 of 1956, section 104, for "their" (w.e.f. 1-11-1956).

4. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

5. The words "or any State Government" omitted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

6. Substituted by Act 37 of 1956, section 104, for "they" (w.e.f. 1-11-1956).

7. The words "and each State Government" omitted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

8. Substituted by Act 37 of 1956, section 104, for sub-section (4) (w.e.f. 1-11-1956).

9. Sub-section (5) Inserted by Act 32 of 1951, section 11 (w.e.f. 1-11-1951) and omitted by Act 37 of 1956, section 10 (w.e.f. 1-11-1956).

10. Inserted by Act 32 of 1951, section 12 (w.e.f. 1-11-1951).

11. The words "Part B" omitted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

12. The words "(including the autonomous State of Meghalaya)" Inserted by Act 54 of 1969, section 75 and omitted by Act 81 of 1971, section 72 (w.e.f. 21-1-1972).

13. Inserted by Act 37 of 1956, section 104 (w.e.f. 1-11-1956).

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(1) The Bank shall have the sole right to issue bank notes in 1* [India], and may, for a period which shall be fixed by the 2*[Central Government] on the recommendation of the Central Board, issue currency notes of the Government of India supplied to it by the 2*[Central Government], and the provisions of this Act applicable to bank notes shall, unless a contrary intention appears, apply to all currency notes of the Government of India issued either by the 2*[Central Government] or by the Bank in like manner as if such currency notes were bank notes, and references in this Act to bank notes shall be construed accordingly.

(2) On and from the date on which this Chapter comes into force the 2*[Central Government] shall not issue any currency notes.

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1. Substituted by Act 32 of 1951, section 2, for "the States" (w.e.f. 1-11-1951).

2. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

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(1) The issue of bank notes shall be conducted by the Bank in an Issue Department which shall be separated and kept wholly distinct from the Banking Department, and the assets of the Issue Department shall not be subject to any liability other than the liabilities of the Issue Department as hereinafter defined in section 34.

(2) The Issue Department shall not issue bank notes to the Banking Department or to any other person except in exchange for other bank notes or for such coin, bullion or securities as are permitted by this Act to form part of the Reserve.

1[***]

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1. Sub-section (3) Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section13 (w.e.f. 1-4-1947).

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(1) Subject to the provisions of sub-section (2) bank notes shall be of the denominational value to two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees, as the Central Government may, on the recommendation of the Central Board, specify in this behalf.

(2) The Central Government may, on the recommendation of the Central Board, direct the non-issue or the discontinuance of issue of bank notes of such denominational values as it may specify in this behalf.]

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1. Substituted by Act 58 of 1968, section 25, for section 24. (w.e.f. 1-2-1969).

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The design, form the material of bank notes shall be such as may be approved by the1*[Central Government] after consideration of the recommendations made by the Central Board.

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1. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

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(1) Subject to the provisions of subsection (2), every bank note shall be legal tender at any place in 1*[India] in payment, or on account for the amount expressed therein, and shall be guaranteed by the 2*[Central Government].

(2) On recommendation of the Central Board the 2*[Central Government] may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender 3*[save at such office or agency of the Bank and to such extent as may be specified in the notification].

4 [***]

26A -5* Certain bank notes to cease to be legal tender

Notwithstanding anything contained in section 26, no bank note of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees issued before the 13th day of January, 1946, shall be legal tender in payment or on account for the amount expressed therein.

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1. Substituted by Act 32 of 1951, section 2, for "the States" (w.e.f. 1-11-1951).

2. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

3. Substituted by Act 32 of 1951, section 13, for "save at an office or agency of the Bank" (w.e.f. 1-11-1951).

4. Sub-section (3) Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 14 (w.e.f. 1-4-1947).

5. Inserted by Act 62 of 1956, section 2 and Schedule (w.e.f. 1-11-1956).

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The Bank shall not re-issue bank notes which are torn, defaced or excessively spoiled.



1 [***] Notwithstanding anything contained in any enactment or rule of law to the contrary, no person shall of right be entitled to recover from the 2*[Central Government] or the Bank, the value of any lost, stolen, mutilated or imperfect currency note of the Government of India or bank note:

Provided that the Bank may, with the previous sanction of the 2* [Central Government], prescribed the circumstances in and the conditions and limitations subject to which the value of such currency notes or bank notes may be refunded as of grace and the rules made under this proviso shall be laid on the table 3[***] of 4* [Parliament].

5 [***]

28A - 6*Issue of special bank notes and special one rupee notes in certain cases
 
(1) For the purpose of controlling the circulation of bank notes without India, the Bank may, notwithstanding anything contained in any other provision of this Act, issue bank notes of such design, form and material as may be approved under sub-section (3) (hereinafter in this section referred to as special bank notes) of the denominational values of five rupees, ten rupees and one hundred rupees.

(2) For the purpose of controlling the circulation of Government of India one rupee notes without India, the Central Government may, notwithstanding anything contained in any other provision of this Act or in the Currency Ordinance, 1940, (Ord. 4 of 1940) issue Government of India notes of the denominational value of one rupee of such design, form and material as may be adopted under sub-section (3) (hereinafter in this section referred to as special one rupee notes).

(3) The design, form and material of the special bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Governor and of the special one rupee notes shall be such as the Central Government may think fit to adopt.

(4) Neither the special bank notes not the special one rupee notes shall be legal tender in India.

(5) The special one rupee note shall be deemed to be included in the expression "rupee coin" for all the purposes of this Act except section 39, but shall be deemed not to be a currency note for any of the purposes of this Act.

(6) Where a special bank note is on its face expressed to be payable at a specified office or branch of the Bank, the obligation imposed by section 39 shall be only on the specified "office or branch and, further, shall be subject to such regulations as may be made under this section.

(7) The Bank may, with the previous sanction of the Central Government, make regulations to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this section, and, in particular, the manner in which, and the conditions or limitations subject to which-

(i) Bank notes and one rupee notes in circulation in any country outside India may be replaced by special notes issued under this section;

(ii) Any such special notes may be exchanged for any other bank notes or one rupee notes.]

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1. The brackets and figure "(1)" Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 15 (w.e.f. 1-4-1947).

2. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

3. The words " of both Houses" omitted by the A.O. 1948.

4. Substituted by the A.O. 1950, for "Central Legislature".

5. Sub-section (2) Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 15 (w.e.f. 1-4-1947).

6. Inserted by Act 14 of 1959, section 2 (w.e.f. 1-5-1959).

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The Bank shall not be liable to the payment of any stamp duty under the Indian Stamp Act, 1899 (2 of 1899) in respect of bank notes 1 [***] issued by it.

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1. The words "or Burma notes" Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 16(w.e.f.1-4-1947).

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(1) If in the opinion of the 1*[Central Government] the Bank fails to carry out any of the obligations imposed on it by or under this Act 2 [***] 3* [the Central Government] may, by notification in the Gazette of India, declare the Central Board to be superseded, and thereafter the general superintendence and direction of the affairs of the Bank shall be entrusted to such agency as the 1*[Central Government] may determine, and such agency may exercise the powers and do all acts and things which may be exercised or done by the Central Board under this Act.

(2) When action is taken under this section the 1* [Central Government] shall cause a full report of the circumstances leading to such action and of the action taken to be laid before 4* [Parliament] at the earliest possible opportunity and in any case within three months from the issue of the notification superseding the Board.

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1. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

2. The words "or by or under the law of Burma" Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 17 (w.e.f. 1-4-1947).

3. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "he".

4. Substituted by the A.O. 1950, for "the Central Legislature".

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1*[(1)] No person in 2*[India] other than the Bank, or, as expressly authorized by this Act the 3*[Central Government] shall draw, accept, make or issue any bill of exchange, hundi, promissory note or engagement for the payment of money payable to bearer on demand, or borrow, owe or take up any sum or sums of money on the bills, hundis or notes payable to bearer on demand of any such person:

Provided that cheques or drafts, including hundis, payable to bearer on demand or otherwise may be drawn on a person's account with a banker, shroff or agent.

4*[(2) Notwithstanding anything contained in the Negotiable Instruments Act, 1881, (26 of 1881) no person in 2*[India] other than the Bank or, as expressly authorised by this Act, the Central Government shall make or issue any promissory note expressed to be payable to the bearer of the instrument.]

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1. Section 31 re-numbered as sub-section (1) of that section by Act 23 of 1946., section 2 (w.e.f. 16-11-1946).

2. Substituted by Act 32 of 1951, section 2, for "the States" (w.e.f. 1-11-1951).

3. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

4. Inserted by Act 23 of 1996, section 2 (w.e.f. 16-11-1946).

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[Rep. by the Reserve Bank of India (Amendment) Act, 1974 (51 of 1974), section 9 w.e.f. 13-12-1974).]



(1) The assets of the Issue Department shall consist of gold coin, gold bullion, 1*[foreign securities], rupee coin and rupee securities to such aggregate amount as is not less than the total of the liabilities of the Issue Department as hereinafter defined.

2*[(2) The aggregate value of the gold coin, gold bullion and foreign securities held as assets and the aggregate value of the gold coin and gold bullion so held shall not at any time be less than two hundred crores of rupees and one hundred and fifteen crores of rupees, respectively.]

3*[(3) The remainder of the assets shall be held in rupee coin, Government of India rupee securities of any maturity, promissory notes drawn by the National Bank for any loans or advances under clause (4E) of section 17 and such bills of exchange and promissory notes payable in India as are eligible for purchase by the Bank under sub-clause (a) or sub-clause (b) or sub-clause (bb) of clause (2) of section 17 or under clause (1) of section 18.]

4 [***]

(4) For the purposes of this section, gold coin the gold bullion shall be valuated at 5*[6*[a price not exceeding the international market price for the lime being obtaining]], rupee coin shall be valued at its face value, and securities shall be valued 7*[at rates not exceeding the market rates] for the time being obtaining.

(5) Of the gold coin and gold bullion held as assets, not less than seventeen-twentieths shall be held in 8*[India], and all gold coin and gold bullion held as assets shall be held in the custody of the Bank or its agencies:

Provided
that gold belonging to the Bank which is in any other bank or in any mint or treasury or in transit may be reckoned as part of the assets.

9*[(6) For the purposes of this section, the foreign securities which may be held as part of the assets shall be-

(i) Securities of the following kinds payable in the currency of any foreign country which is a member of the International Monetary Fund, namely:-

(a) Balances with the bank which is the principal currency authority of that foreign country and any other balances or securities in foreign currency maintained with or issued by the International Monetary Fund, the International Bank for Reconstruction and Development, the International Development Association or the International Finance Corporation 10*[or Asian Development Bank] or the Bank for International Settlements or 11*[any banking or financial institution 12*[approved] by the Central Government] in this behalf provided that they are repayable within a 13* [period of ten years]:

(b) Bills of exchange bearing two or more good signatures and drawn on and payable at any place in that foreign country and having a maturity not exceeding ninety days; and

(c) Government securities of that foreign country maturing 14*[within ten years];

(ii) Any drawing rights representing a liability of the International Monetary Fund.

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1. Substituted by Act 62 of 1948, section 7 and Schedule, for "Sterling securities" (w.e.f. 1-1-1949).

2. Substituted by Act 48 of 1957, section 2, for sub-section (2) (w.r.e.f. 31-10-1957).

3. Substituted by Act 61 of 1981, section 61 and Schedule II, for sub-section (3) (w.e.f. 12-7-1982).

4. The proviso omitted by Ordinance 3 of 1941, section 2.

5. Substituted by Act 58 of 1968, sec 26 , for "2.88 grains" (w.e.f. 1-2-1969).

6. Substituted by Act 8 of 1991, section 2, for "0.118489 grammes of fine gold per rupee".

7. Substituted by Act 58 of 1968, section 26, for " at the market rate" (w.e.f. 1-2-1969).

8. Substituted by Act 32 of 1951, section 2, for "the States" (w.e.f. 1-11-1951).

9. Substituted by Act 51 of 1974, section 10, for sub-section (6) (w.e.f. 13-12-1974).

10. Inserted by Act 24 of 1978, section 6 (w.e.f. 21-7-1978).

11. Substituted by Act 24 of 1978, section 6, for certain words (w.e.f. 21-7-1978).

12. Substituted by Act 1 of 1984, section 4, for "notified" (w.e.f. 15-2-1984).

13. Substituted by Act 24 of 1978, section 6, for "period of five years" (w.e.f. 21-7-1978).

14. Substituted by Act 24 of 1978, section 6, for "within five years" (w.e.f. 21-7-1978).

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(1) The Liabilities of the Issue Department shall be an amount equal to the total of the amount of the currency notes of the Government of India and bank notes for the time being in circulation.

1 [***]

2 [***]

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1. Sub-section (2) omitted by Act 55 of 1963, sec 2 (w.e.f. 1-2-1964).

2. Sub-section (3) Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937 and omitted by Act 11 of 1947, section 19 (w.e.f. 1-4-1947).

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[Rep. by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).]



[Rep. by Act 55 a/1963, section 3 (w.e.f. 1-2-1964).]
                                       


Notwithstanding anything contained in the foregoing provisions, the Bank may, with the previous sanction of the Central Government, for periods not exceeding six months in the first instance, which may, with the like sanction, be extended from time to time by period not exceeding three months at a time, hold as assets foreign securities of less amount in value than that required by sub-section (2) of section 33:

2 [***]

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1. Substituted by Act 38 of 1956, section 4, for section 37 (w.e.f. 6-10-1956).

2. Proviso omitted by Act 48 of 1957, section 3 (w.e.f. 31-10-1957).

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The 1*[Central Government] shall undertake not 2[***] to put into circulation any rupees, except through the Bank, 3 [***] and the Bank shall undertake not to dispose of rupee coin other-wise than for the purposes of circulation 4 [***].

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1. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

2. The words "to re-issue any rupee coin delivered under section 36 nor" omitted by Act 55 of 1963, section 4 (w.e.f. 1-2-1964).

3. The words "and as provided in that section" omitted by Ordinance 4 of 1940, section 3.

4. The words "or by delivery to the Central Government under that section" omitted by Act 55 of 1963, section 4 (w.e.f. 1-2-1964).

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(1) The Bank shall issue rupee coin on demand in exchange for bank notes and currency notes of the Government of India and shall issue currency notes or bank notes on demand in exchange for coin which is legal tender under the Indian Coinage Act, 1906 (3 of 1906).

(2) The Bank shall, in exchange for currency notes or bank notes of 1* [two] rupees or upwards, supply currency notes or bank notes of lower value or other coins which are legal tender under the Indian Coinage Act, 1906 (3 of 1906), in such quantities as may, in the opinion of the Bank, be required for circulation; and the 2*[Central Government] shall supply such coins to the Bank on demand. If the 2*[Central Government] at any time fails to supply such coins, the Bank shall be released from its obligations to supply them to the public.

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1. Substituted by Act 62 of 1948, section 7 and Schedule, for "five" (w.e.f. 1-1-1949).

2. Substituted by the India and Burma (Burma Monetary Arrangements) Order, 1937, for "Governor-General in Council".

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The Bank shall sell to or buy from any authorized person who makes a demand in that behalf at its office in Bombay, Calcutta, Delhi or Madras 2*[or at such or its branches as the Central Government may, by order determine], foreign exchange at such rates of exchange and on such conditions as the Central Government may from time to time by general or special order determine, having regard so far as rates of exchange are concerned to its obligations to the International Monetary Fund:

Provided that no person shall be entitled to demand to buy or sell foreign exchange of a value less than two lakhs of rupees.

Explanation,-In the section "authorized person" means a person who is entitled by or under the 3*[Foreign Exchange Regulation Act, 1973 (46 of 1973)] to buy, or as the case may be, sell, the foreign exchange to which his demand relates.]

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1. Substituted by Act 23 of 1947, section 4, for sections 40 and 41 (w.e.f. 18-4-1947).

2. Inserted by Act 54 of 1953, section 5 (w.e.f. 30-12-1953).

3. Substituted by Act 1 of 1984, section 5, for "Foreign Exchange Regulation Act, 1947 (7 of 1947)" (w.e.f. 15-2-1984).

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Rep. By Act 23 of 1947, s. 4 (w.e.f. 18-4-1947).

41A - 1*Obligation to provide remittance between India and Burma Repealed

[Rep. by Act 11 of 1947, section 22 (w.e.f. 1-4-1947).]]


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1. Inserted by the India and Burma (Burma Monetary Arrangements) Order, 1937.

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1*[(1) Every bank included in the Second Schedule shall maintain with the Bank an average daily balance the amount of which shall not be less than 40*[such per cent. of the total of the demand and time liabilities in India of such bank as shown in the return referred to in sub-section (2), as the Bank may from time to time, having regard to the needs of securing the monetary stability in the country, notify in the Gazette of India]

41[***]

Explanation.-For the purposes of this section,-

(a) "Average daily balance" shall mean the average of the balances held at the close of business of each day 5*[of a fortnight];

6*[(b) "Fortnight" shall mean the period from Saturday to the second following Friday, both days inclusive;]

7*[(c) "Liabilities" shall not include-

(i) The paid-up capital or the reserves or any credit balance in the profit and loss account of the bank;

(ii) The amount of any loan taken from the Bank 8[***] 9*[or from the Exam Bank] 10*[or from the Reconstruction Bank] 11*[or from the National Housing Bank or from the 12*[National Bank] 13*[or from the Small Industries Bank] 14[***];

(iii) In the case of a State co-operative bank, also any loan taken by such bank from a State Government 15*[or from the National Cooperative Development Corporation established under the National Co-operative Development Corporation Act, 1962 (26 of 1962)] and any deposit of money with such bank representing the reserve fund or any part thereof 16 [***] maintained with it by any co-operative society within its area of operation;

17*(iv) In the case of a State co-operative bank, which has granted an advance against any balance maintained with it, such balance to the extent of the amount outstanding in respect of such advance;

15*[(v) In the case a Regional Rural Bank, also any loan taken by such bank from its Sponsor Bank;]

17*[(d) The aggregate of the liabilities" of a Scheduled bank which is not a State co-operative bank, to,-

(i) The State Bank;

(ii) A subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);

15*[(iiia) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980)];

(iv) A banking company as defined in clause (c) section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(v) A co-operative bank; or

(vi) Any other financial institution notified by the Central Government in this behalf,shall be reduced by the aggregate of the liabilities of all such banks and institutions to the scheduled bank;

(e) The aggregate of the "liabilities" of a scheduled bank which is a State co-operative bank, to,-

(i) The State Bank;

(ii) A subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);

1*[(iiia) A corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);]

(iv) A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); or

(v) Any other financial institution notified by the Central Government in, this behalf,shall be reduced by the aggregate of the liabilities of all such banks and institutions to the State co-operative bank.]

(1A) Notwithstanding anything contained in sub-section (1), the Bank may, by notification in the Gazette of India, direct that every scheduled bank shall, with effect from such date as may be specified in the notification, maintain with the Bank, in addition to the balance prescribed by or under sub-section (1), an additional average daily balance the amount of which shall not be less than the 18*[rate specified in the notification, such additional balance being calculated with reference to the excess of the total of the demand and time liabilities of the bank as shown in the return referred to in sub-section (2) over the total of its demand and time liabilities] at the close of business on the date specified in the notification as shown by such return so however, that the additional balance shall, in no case, be more than such excess:

19*[Provided that the Bank may, by a separate notification in the Gazette of India, specify different dates in respect of a Bank subsequently included in the Second Schedule].

4[***]

4[***]

15*[1C) The Bank may, for the purposes of this section, specify from time to time with reference to any transaction or class of transactions that such transaction or transactions shall be regarded as liability in India of a scheduled bank, and if any question arises as to whether any transaction or class of transactions shall be regarded, for the purposes of this section, as liability in India of a scheduled bank, the decision of the Bank thereon shall be final.]

21*[(2) Every scheduled bank shall send to the Bank a return signed by two responsible officers of such bank showing-

(a) The amount of its demand and time liabilities and the amount of its borrowings from banks in India, 22*[classifying them into demand and time liabilities],

23 [***]

(b) The total amount of legal tender notes and coins held by it in India,

(c) The balance held by it at the Bank in India,

(d) The balances held by it at other banks in current account and the money at call and short notice in India,

(e) The investments (at book value) in Central and State Government securities including treasury bills and treasury deposit receipts,

(f) The amount of advances in India,

(g) The inland bills purchased and discounted in India 24*[and foreign bills purchased and discounted].

25*[at the close of business on each alternate Friday, and every such return shall be sent not later than seven days after the date to which it relates:]

26*[Provided that the Bank may, by notification in the Gazette of India, delete or modify or add to any of the particulars specified in the foregoing clauses:

Provided further that] 15*[such alternate] Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), for one or more offices of a scheduled bank the return shall give the preceding working day's figures in respect of such office or offices, but shall nevertheless be deemed to relate to that Friday:

27*[Provided also that where the Bank is satisfied that the furnishing of a fortnightly return under this sub-section is impracticable in the case of any scheduled bank by reason of the geographical position of the bank and its branches, the Bank may allow such bank-

(i) To furnish a provisional return for the fortnight within the period aforesaid to be followed by a final return not later than twenty days after the date to which it relates, or

(ii) To furnish in lieu of a fortnightly return a monthly return to be sent not later than twenty days after the end of the month to which it relates giving the details specified in this sub-section in respect of such bank at the close of business for the month.]]

15*[(2A) Where the last Friday of a month is not an alternate Friday for the purpose of sub-section(2), every scheduled bank shall send to the Bank, a special return giving the details specified in sub-section (2) as at the close of business on such last Friday or where such last Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), as at the close of business on the preceding working day and such return shall be sent not later than seven days after the date to which it relates.]

28*[(3) If the average daily balance held at the Bank by a scheduled bank during any 5*[fortnight] is below the minimum prescribed by or under sub-section (1) or sub-section (1A), such scheduled bank shall be liable to pay to the Bank in respect of that 5*[fortnight] penal interest at a rate of three per cent, above the bank rate on the amount by which such balance with the Bank falls short of the prescribed minimum, and if during the next succeeding 5*[fortnight], such average daily balance is still below the prescribed minimum, the rates of penal interest shall be increased to a rate of five per cent, above the bank rate in respect of that 5*[fortnight] and each subsequent 5*[fortnight] during which the default continues on the amount by which such balance at the Bank falls short of the prescribed minimum.]

29*[(3A) When under the provisions of sub-section (3) penal interest at the increased rate of five per cent, above the bank rate has become payable by a scheduled bank, 30*[if thereafter the average daily balance held at the Bank during the next succeeding 5*[fortnight] is still below the prescribed minimum, -

(a) Every director, manager or secretary of the scheduled bank, who is knowingly and willfully a party to the default, shall be punishable with fine which may extend to five hundred rupees and with a further fine which may extend to five hundred rupees for each subsequent 5 [fortnight] during which the default continues, and

(b) The Bank may prohibit the scheduled bank from receiving after the said 5 [fortnight] any fresh deposit,]and, if default is made by the scheduled bank in complying with the prohibition referred to in clause (b), every director and officer of the scheduled bank who is knowingly and willfully a party to such default or who through negligence or otherwise contributes to such default shall in respect of each such default be punishable with fine which may extend to five hundred rupees and with a further fine which may extend to five hundred rupees for each day after the first on which a deposit received in contravention of such prohibition is retained by the scheduled bank.

Explanation.-In this sub-section "officer" includes a 31[***] manager, secretary, branch manager, and branch secretary.]

(4) Any scheduled bank failing to comply with the provisions of sub-section (2) 32*[shall be liable to pay to the Bank] a penalty of one hundred rupees for each day during which the failure continues.

18*[(5) (a) The penalties imposed by sub-sections (3) and (4) shall be payable within a period of fourteen days from the date on which a notice issued by the Bank demanding the payment of the same is served on the scheduled bank, and in the event of failure of the scheduled bank to pay the same within such period, may be levied by a direction of the principal civil court having jurisdiction in the area where an office of the defaulting bank is situated, such direction to be mode only upon an application made in this behalf to the court by the Bank;

(b) When the court makes a direction under clause (a), it shall issue a certificate specifying the sum payable by the scheduled bank and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a suit;

(c) Notwithstanding anything contained in this section, if the Bank is satisfied that the defaulting bank and sufficient cause for its failure to comply with the provisions of sub-section (1), (1A) or (2), it may not demand the payment of the penal interest of the penalty, as the case may be.]

33*[(6) The Bank shall, save as hereinafter provided, by notification in the Gazette of India,-

(a) Direct the inclusion in the Second Schedule of any bank not already so included which carries on the business of banking 34*[in India] and which-

(i) Has a paid-up capital and reserve of an aggregate value of not less than five lakhs or rupees, and

(ii) Satisfies and Bank that its affairs are not being conducted in a manner detrimental to the interests of its depositors, and

(iii) 35*[is a State co-operative bank or a company] as defined 36*[section 3 of the Companies Act, 1956 (1 of 1956), or an institution notified by the Central Government in this behalf] or a corporation or a company incorporated by or under any law in force in any place 37*[outside India];

(b) Direct the exclusion from that Schedule of any scheduled bank,-

(i) The aggregate value of whose paid-up capital and reserves becomes at any time less than five lakhs of rupees, or

(ii) Which is, in the opinion of the Bank after making an inspection under section 35 of the Banking Regulation Act, 1949 (10 of 1949), conducting its affairs to the detriment of the interests of its depositors, or

(iii) Which goes into liquidation or otherwise ceases to carry on banking business:

Provided that the Bank may, on application of the scheduled bank concerned and subject to such conditions, if any, as it may impose, defer the making of a direction under sub-clause (i) or sub-clause (ii) of clause (b) for such period as the Bank consider reasonable to give the scheduled bank an opportunity of increasing the aggregate value of its paid-up capital and reserves to not less than five lakhs of rupees or, as the case may be, of removing the defects in the conduct of its affairs;

(c) Alter the description in that Schedule whenever any scheduled bank changes its name.

Explanation.-In this sub-section the expression "value" means the real or exchangeable value and not the nominal value which may be shown in the boods of the bank concerned; and if any dispute arises in computing the aggregate value of the paid-up capital and reserves of a bank, a determination thereof by the Bank shall be final for the purposes of this sub-section.]

38* [(6A) In considering whether a State co-operative bank or a regional rural bank should be included in or excluded from the Second Schedule, it shall be competent for the Bank to act on a certificate from the National Bank on the question whether or not a State co-operative bank or a regional rural bank, as the case may be, satisfies the requirements as to paid-up capital and reserves or whether its affairs are not being conducted in a manner detrimental to the interests of its depositors.]

39*[(7) The Bank may, for such period and subject to such conditions as may be specified, grant to any scheduled bank such exemptions from the provisions of this section as it thinks fit with reference to all or any of its offices or with reference to the whole or any part of its assets and liabilities.]

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1. Sub-sections (1), (1A) and (IB) Substituted by Act 38 of 1956, section 5, for sub-section (1) (w.e.f. 6-10-1956).

2. Substituted by Act 35 of 1962, section 4, for "five per cent, of demand liabilities" (w.e.f. 15-9-1962).

3. Substituted by Act 35 of 1962, section 4, for the proviso.

4. Substituted by Act 9 of 1991, section 2, for "fifteen per cent." (w.e.f. 25-1-1991).

4. Omitted by Reserve Bank of India (Amendment) Act, 2006 (26 of 2006), w.e.f 1st April, 2007. Prior to omission it was read as under:

"20 [(1AA) Notwithstanding anything contained in sub-section (1) or sub-section (1A), it shall not be necessary for any scheduled bank to maintain with the Bank any balance which shall be more than fifteen per cent, of the total of its demand and time liabilities as shown in the return referred to in sub-section (2).]

(1B) Where any scheduled bank maintains, in pursuance of a notification issued under the proviso to sub-section (1) or under sub-section (1A), any balance with the Bank the amount of which is not less man that required to be maintained by such notification, the Bank may pay to the scheduled bank interest at such rate or rates as may be determined by the Bank from time to time on the amount by which such balance actually maintained is in excess of the balance which the scheduled bank would have to maintain, if no such notification was issued:

Provided that no interest shall be payable on any such amount actually maintained as is in excess of the balance required to he maintained by or under sub-section (1) or under sub¬section (1A):]
 
21*[Provided further that where the Bank does not, under sub-section (5), demand the payment of the penalty imposed by sub-section (3), it may pay interest at such rate or rates as may be determined by the Bank from time to time on the amount actually maintained with it by the scheduled bank, notwithstanding that such amount is less than the balance required to be maintained in pursuance of a notification issued under the proviso to sub-section (1) or under sub-section (1-A).]"

5. Substituted by Act 1 of 1984, section 6, for "of a week" (w.e.f. 29-3-1985).

6. Substituted by Act 1 of 1984, section 6, for clause (b) (w.e.f. 29-3-1985).

7. Substituted by Act 23 of 1965, section 6, for clause (c) (w.e.f. 1-3-1966).

8. The words "or from the Development Bank" omitted by Act 53 of 2003, section 12 and Schedule, Pt. I.

9. Inserted by Act 28 of 1981, section 40 and Schedule II (w.e.f. 1-1-1982).

10 Inserted by Act 62 of 1984, section 71 and Schedule Ill (w.e.f. 20-3-1985).

11. Inserted by Act 53 of 1987, section 56 and the Second Schedule (w.e.f. 9-7-1988).

12. Substituted by Act 61 of 1981, section 61 and Schedule II, for "Agricultural Refinance and Development Corporation" (w.e.f. 1-5-1982).

13. Inserted by Act 39 of 1989, section 53 and ScheduleII (w.e.f. 7-3-1990).

14. Certain words omitted by Act 51 of 1974, section 11 (w.e.f. 13-12-1947).

15. Inserted by Act 1 of 1984, section 6 (w.e.f. 29-3-1985).

16. The words "required to be"omitted by Act 51 of 1974, section 11 (w.e.f. 13-12-1974).

17. Inserted by Act 51 of 1974, section 11 (w.e.f. 13-12-1974).

18. Substituted by Act 35 of 1962, section 4, for certain words (w.e.f. 15-9-1962).

19. Inserted by Act 1 of 1984, section 6 (w.e.f. 29-3-1985). Earlier the proviso was omitted by Act 35 of 1962, section 4 (w.e.f. 15-9-1962).

20. Inserted by Act 35 of 1962, section 4 (w.e.f. 15-9-1962).

21. Substituted by Act 32 of 1951, section 16, for sub-section (2) (w.e.f. 1-11-1951).

22. Substituted by Act 51 of 1974, section 11, for certain words (w.e.f. 13-12-1974).

23. Clause (aa) omitted by Act 51 of 1974, section 11 (w.e.f. 13-12-1974). Earlier clause (a) was Inserted by Act 54 of 1953, section 6 (w.e.f. 30-12-1953).

24. Inserted by Act 54 of 1953, section 6 (w.e.f. 30-12-1953).

25. Substituted by Act 1 of 1984, section 6, for certain words (w.e.f. 29-3-1985).

26. Substituted by Act 51 of 1974, section 11, for "Provided that" (w.e.f. 13-12-1974).

27. Substituted by Act 1 of 1984, section 6, for the third proviso (w.e.f. 29-3-1985).

28. Substituted by Act 38 of 1956, section 5, for sub-section (3) (w.e.f. 6-10-1956).

29. Inserted by Act 38 of 1940, sec, 2.

30. Substituted by Act 38 of 1956, sec, 5, for certain words (w.e.f. 6-10-1956).

31. The words "managing agent," omitted by Act 32 of 1951, sec, 16 (w.e.f. 1-11-1951).

32. Substituted by Act 32 of 1951, section 16, for certain words (w.e.f. 1-11-1951).

33. Substituted by Act 10 of 1949, sec, 55 and Schedule I, for sub-section (6) (w.e.f. 16-3-1949).

34. Substituted by Act 32 of 1951, sec, 16, for "in any State of India" (w.e.f. 1-11-1951).

35. Substituted by Act 23 of 1965, sec, 6, for "is a company" (w.e.f. 1-3-1966).

36. Substituted by Act 19 of 1957, sec, 4, for "clause (2) of section 2 of the Indian Companies Act, 1913 (7 of 1913)".

37. Substituted by Act 32 of 1951, sec, 16, for "outside the States of India" (w.e.f. 1-11-1951).

38. Inserted by Act 61 of 1981, section 61 and Schedule II (w.e.f. 1-5-1982).

39. Inserted by Act 32 of 1951, section 16 (w.e.f. 1-11-1951).

40. Substituted by Reserve Bank of India (Amendment) Act, 2006 (26 of 2006) w.e.f. 1st April, 2007 for the following:

2*[three per cent. of the total of the demand and time liabilities] in India of such bank as shown in the return referred to in sub-section(2):

41. Omitted by Reserve Bank of India (Amendment) Act, 2006 (26 of 2006) w.e.f. 1st April, 2007. Prior to omission it was read as under:

3*[Provided that the Bank may, by notification in the Gazette of India, increase the said rate to such higher rate as may be specified in the notification so however that the rate shall' not be more than fifteen per cent, of the total of the demand and time liabilities.]"
 
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The Bank shall cause to be published each 2*[fortnight] a consolidated statement showing the aggregate liabilities and assets of all the scheduled banks together, based on the returns and information received under this Act or any other law for the time being in force.]

43A - 3*Protection of action taken in good faith

(1) No suit or other legal proceeding shall lie against the Bank or any of its officers for anything which is in good faith done or intended to be done in pursuance of section 42 or section 43 4*[or in pursuance of the provisions of Chapter IIIA].

(2) No suit or other legal proceeding shall lie against the Bank or any of its officers for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of section 42 or section 43 4*[or in pursuance of the provisions of Chapter IIIA].]

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1. Substituted by Act 51 of 1974, section 12, for section 43 (w.e.f. 13-12-1974).

2. Substituted by Act 1 of 1984, section 7, for "week" (w.e.f. 29-3-1985).

3. Inserted by Act 54 of 1953, section 7 (w.e.f. 30-12-1953).

4. Inserted by Act 35 of 1962, section 5 (w.e.f. 15-9-1962).

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[Rep. by the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965), section 7 (w.e.f. 1-3-1966).]



(1) Unless otherwise directed by the Central Government with reference to any place, the Bank may, having regard to public interest, convenience of banking, banking development and such other factors which in its opinion are relevant in this regard, appoint the National Bank, or the State Bank, or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), as its agent at all places, or at any place in India for such purposes as the Bank may specify.

(2) When any bank is appointed by the Bank as its agent under sub-section (1) to receive on behalf of the Bank any payment required to be made into the Bank, or any bill, hundies or other securities required to be delivered into the Bank, under any law or rule, regulations or other instructions having the force of law, the same may be paid or delivered into the bank so appointed as the agent of the Bank.]

45A - Definitions

In this Chapter, unless the context otherwise requires,-

(a) "Banking company' means a banking company as defined in section 5 of the 2*[Banking Regulation Act, 1949] (10 of 1949) and includes the State Bank of India,3*[any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), any corresponding new bank constituted by section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), and any other financial institution notified by the Central Government in this behalf];

(b) "Borrower" means any person to whom any credit limit has been sanctioned by any banking company, whether availed of or not, and includes-

(i) In the case of a company or corporation, its subsidiaries;

(ii) In the case of a Hindu undivided family, any member thereof or any firm in which such member is a partner;

(iii) In the case of a firm, any partner thereof or any other firm in which such partner is a partner; and

(iv) In the case of an individual, any firm in which such individual is a partner;

(c) "Credit information" means any information relating to-

(i) The amounts and the nature of loans or advances and other credit facilities granted by a banking company to any borrower or class of borrowers;

(ii) The nature of security taken from any borrower 4*[or class of borrowers] for credit facilities 5*[granted to him or to such class];

(iii) The guarantee furnished by a banking company for any of its customers 4*[or any class of its customers];

4*[(iv) The means, antecedents, history of financial transactions and the creditworthiness of any borrower or class of borrowers;

(v) Any other information which the Bank may consider to be relevant for the more orderly regulation of credit or credit policy.]

45B - Power of Bank to collect credit information

The Bank may-

(a) Collect, in such manner as it may think fit, credit information from banking companies; and

(b) Furnish such information to any banking company in accordance with the provisions of section 45D.

45C - Power to call for returns containing credit information

(1) For the purpose of enabling the Bank to discharge its functions under this Chapter, it may at any time direct any banking company to submit to it such statements relating to such credit information and in such form and within such time as may be specified by the Bank from time to time.

(2) A banking company shall, notwithstanding anything to the contrary contained in any law for the time being in force on in any instrument regulating the constitution thereof or in any agreement executed by it, relating to the secrecy of its dealings with its constituents, be bound to comply with any direction issued under sub-section (1).

45D - Procedure for furnishing credit information to banking companies

(1) A banking company may, in connection with any financial arrangement entered into or proposed to be entered into by it, with any person, make an application to the Bank in such form as the Bank may specify requesting it to furnish the applicant with such credit information as may be specified in the application.

(2) On receipt of an application under sub-section (1), the Bank shall, as soon as may be, furnish the applicant with such credit information relating to the matters specified in the application, as may be in its possession:

Provided that the information so furnished shall not disclose the names of the banking companies which have submitted such information to the Bank.

(3) The Bank may in respect of each application levy such fees, not exceeding twenty-five rupees, as it may deem fit for furnishing credit information.

45E - Disclosure of information prohibited

(1) Any credit information contained in any statement submitted by a banking company under section 45C or furnished by the Bank to any banking company under section 45D, shall be treated as confidential and shall not, except for the purposes of this Chapter, be published or otherwise disclosed.

(2) Nothing in this section shall apply to-

(a) The disclosure by any banking company, with the previous permission of the Bank, of any information furnished to the Bank under section 45C;

(b) The publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under section 45C, in such consolidated form as it may think fit without disclosing the name of any banking company or its borrowers;

6*[(c) the disclosure or publication by the banking company or by the Bank of any credit information to any other banking company or in accordance with the practice and usage customary among bankers or as permitted or required under any other law;

7*(d) the disclosures of any credit information under the Credit Information Companies (Regulation) Act, 2005.

Provided that any credit information received by a banking company under this clause shall not be published except in accordance with the practice and usage customary among bankers or as permitted or required under any other law.]

(3) Notwithstanding anything contained in any law for the time being in force, no court, tribunal or other authority shall compel the Bank or any banking company to produce or to give inspection of any statement submitted by that banking company under section 45C or to disclose any credit information furnished by the Bank to that banking company under section 45 D.

45F - Certain claims for compensation barred

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 of this Chapter.

45G - Penalties (Repealed)

[Rep. by the Reserve Bank of India (Amendment) Act, 1974 (51 of l974), section 15 (w.e.f. 13-12-1974).]

45H - Chapter IIIB not to apply in certain cases

The provisions of this Chapter shall not apply to the State Bank or a banking company as defined in section 5 of the 8*[Banking Regulation Act, 1949] (10 of 1949) or 9*[a corresponding new bank as defined in clause (da) of section 5 of the Act or a subsidiary bank as defined in State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959)] or 10*[a Regional Rural Bank or a co-operative bank or a primary agricultural credit society or a primary credit society]:

Provided that for the purposes of this Chapter, the 11*[Tamil Nadu Industrial Investment Corporation Limited] shall not be deemed to be a banking company.

45I - Definitions

In this Chapter, unless the context otherwise requires,-

12* [(a) "Business of a non-banking financial institution" means carrying on the business of a financial institution referred to in clause (c) and includes business of a non-banking financial company referred to in clause (f);]

13*[(aa)] "Company" means a company as defined in section 3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of section 591 of that Act;

(b) "Corporation" means a corporation incorporated by an Act of any legislature;

14*[(bb) "Deposit" includes and shall be deemed always to have include any receipt of money by way of deposit or loan or in any other form, but does not include,-

(i) Amounts raised by way of share capital; (ii) amounts contributed as capital by partners of a firm;

(iii) Amounts received from a scheduled bank or a co-operative bank or any other banking company as defined in clause (c) of section 5 of a Banking Regulation Act, 1949 (10 of 1949);

(iv) Any amount received from,-

15*[***]

(b) A State Financial Corporation,

(c) Any financial institution specified in or under section 6A of the Industrial Development Bank of India Act, 1964 (18 of 1964), or

(d) Any other institution that may be specified by the Bank in this behalf;

(v) Amounts received in the ordinary course of business, by way of-

(a) Security deposit,

(b) Dealership deposit,

(c) Earnest money, or

(d) Advance against orders for goods, properties or services;

(vi) Any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money lending which is for the time being in force in any State; and

(vii) Any amount received by way of subscriptions in respect of a chit.

Explanation I.-"Chit" has the meaning assigned to it in clause (b) of section 2 of the Chit Funds Act, 1982 (40 of 1982).

Explanation II.- Any credit given by a seller to a buyer on the sale of any property (whether movable or immovable) shall not be deemed to be deposit for the purposes of this clause;]

16* [(c) "financial institution" means any non-banking institution which carries on as its business or part of its business any of the following activities, namely:-

(i) The financing, whether by way of making loans or advances or otherwise, of any activity other than its own;

(ii) The acquisition of shares, stock, bonds, debentures or securities issued by a Government or local authority or other marketable securities of a like nature;

(iii) Letting or delivering of any goods to a hirer under a hire-purchase agreement as defined in clause (c) of section 2 of the Hire-Purchase Act, 1972 (26 of 1972);

(iv) The carrying on of any class of insurance business;

(v) Managing, conducting or supervising, as foreman, agent or in any other capacity, of chits or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto;

(vi) Collecting, for any purpose or under any scheme or arrangement by whatever name called, monies in lump sum or otherwise, by way of subscriptions or by sale of units, or other instruments or in any other manner and awarding prizes or gifts, whether in cash or king, or disbursing monies in any other way, to persons from whom monies are collected or to any other person,17*[but does not include any institution, which carries on as its principal business,-

(a) Agricultural operations; or

(aa) Industrial activity; or]

18*[Explanation.-For the purposes of this clause, "industrial activity" means any activity specified in sub-clauses (i) to (xviii) of clause (c) of section 2 of the Industrial Development Bank of India Act, 1964 (18 of 1964);]

(b) The purchase, or sale of any goods (other than securities) or the providing of any services; or

(c) The purchase, construction or sale of immovable property, so, however, that no portion of the income of the institution is derived from the financing of purchases, constructions or sales of immovable property by other persons;]

(d) "Firm" means a firm as defined in the Indian Partnership Act, 1932 (9 of 1932) 19[***];

(e) "Non-banking institution" means a company, corporation, 20*[or co-operative society];

21*[(f) "Non-banking financial company" means-

(i) A financial institution which is a company;

(ii) A non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner;

(iii) Such other non-banking institution or class of such institutions, as the Bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.]

45IA - 22*Requirement of registration and net owned fund

(1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no non-banking financial company shall commence or carry on the business of a non-banking financial institution without-

(a) Obtaining a certificate of registration issued under this Chapter; and

(b) Having the net owned fund of twenty-five lakh rupees or such other amount, not exceeding two hundred lakh rupees, as the Bank may, by notification in the Official Gazette, specify.

(2) Every non-banking financial company shall make an application for registration to the Bank in such form as the Bank may specify:

Provided
that a non-banking financial company in existence on the commencement of the Reserve Bank of India (Amendment) Act, 1997 shall make an application for registration to the Bank before the expiry of six months from such commencement and notwithstanding anything contained in sub-section (1) may continue to carry on the business of a non-banking financial institution until a certificate of registration is issued to it or rejection of application for registration is communicated to it.

(3) Notwithstanding anything contained in sub-section (1), a non-banking financial company in existence on the commencement of the Reserve Bank of India (Amendment) Act, 1997 and having a net owned fund of less than twenty-five lakh rupees may, for the purpose of enabling such company to fulfill the requirement of the net owned fund, continue to carry on the business of a non-banking financial institution-

(i) For a period of there years from such commencement; or

(ii) For such further period as the Bank may, after recording the reasons in writing for so doing, extend,subject to the condition that such company shall, within three months of fulfilling the requirement of the net owned fund, inform the Bank about such fulfillment:

Provided that the period allowed to continue business under this sub-section shall in no case exceed six years in the aggregate.

(4) The Bank, for the purpose of considering the application for registration, may require to be satisfied by an inspection of the books of the non-banking financial company or otherwise that the following conditions are fulfilled:-

(a) That the non-banking financial company is or shall be in a position to pay its present or future depositors in full as and when their claims accrue;

(b) That the affairs of the non-banking financial company are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors;

(c) That the general character of the management or the proposed management of the non-banking financial company shall not be prejudicial to the public interest or the interests of its depositors;

(d) That the non-banking financial company has adequate capital structure and earning prospects;

(e) That the public interest shall be served by the grant of certificate of registration to the non-banking financial company to commence or to carry on the business of India;

(f) That the grant of certificate of registration shall not be prejudicial to the operation and consolidation of the financial sector consistent with monetary stability and economic growth considering such other relevant factors which the Bank may, by notification in the Official Gazette, specify; and

(g) Any other condition, fulfillment of which in the opinion of the Bank, shall be necessary to ensure that the commencement of or carrying on of the business in India by a non-banking financial company shall not be prejudicial to the public interest or in the interests of the depositors.

(5) The Bank may, after being satisfied that the conditions specified in subsection (4) are fulfilled, grant a certificate of registration subject to such conditions which it may consider fit to impose.

(6) The Bank cancel a certificate of registration granted to a non-banking financial company under this section if such company-

(i) Ceases to carry on the business of a non-banking financial institution in India; or

(ii) Has failed to comply with any condition subject to which the certificate of registration had been issued to it; or

(iii) At any time fails to fulfill any of the conditions referred to in clauses (d) to (g) of sub-section (4); or

(iv) Fails-

(a) To comply with any direction issued by the Bank under the provisions of this Chapter; or

(b) To maintain accounts in accordance with the requirements of any law or any direction or order issued by the Bank under the provisions of this Chapter; or

(c) To submit or offer for inspection its books of account and other relevant documents when so demanded by an inspecting authority of the Bank; or

(v) Has been prohibited from accepting deposit by an order made by the Bank under the provisions of this Chapter and such order has been in force for a period of not less than three months:

Provided that before cancelling a certificate of registration on the ground that the non-banking financial company has failed to company with the provisions of clause (ii) or has failed to fulfill any of the conditions referred to in clause (iii) the Bank, unless it is of the opinion that the delay in cancelling the certificate of registration shall be prejudicial to public interest or the interest of the depositors or the non-banking financial company, shall give an opportunity to such company on such term as the Bank may specify for taking necessary steps to comply with such provision or fulfillment of such condition:

Provided further that before making any order of cancellation of certificate of registration, such company shall be given a reasonable opportunity of being heard.

(7) A company aggrieved by the order of rejection of application for registration or, cancellation of certificate of registration may prefer an Appeal, within a period of thirty days from the date on which such order of rejection or cancellation is communicated to it, to the Central Government and the decision of the Central Government where an appeal has been preferred to it, or of the Bank where no appeal has been preferred, shall be final:

Provided that before making any order of rejection of appeal, such company shall be given a reasonable opportunity of being heard.

Explanations
.-For the purposes of this section,-

(I) "Net owned fund" means-

(a) The aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance-sheet of the company after deducting there from-

(i) Accumulated balance of loss; 

(ii) Deferred revenue expenditure; and 

(iii) Other intangible assets; and

(b) Further reduced by the amounts representing-

(1) Investments of such company in shares of-

(i) Its subsidiaries;

(ii) Companies in the same group;

(iii) All other non-banking financial companies; and

(2) The book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with,-

(i) Subsidiaries of such company; and

(ii) Companies in the same group,to the extent such book value exceeds ten per cent, of (a) above.

(II) "subsidiaries" and "companies in the same group" shall have the same meanings assigned to them in the Companies Act, 1956, (1 of 1956).]

45IB - 23* Maintenance of percentage of assets

(1) Every non-banking financial company shall invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than five per cent, or such higher percentage not exceeding twenty-five per cent, as the Bank may, from time to time and by notification in the Official Gazette, specify, of the deposits outstanding at the close of business on the last working day of the second preceding quarter:

Provided that the Bank may specify different percentages of investment in respect of different classes of non-banking financial companies.

(2) For the purpose of ensuring compliance with the provisions of this section, the Bank may require every non-banking financial company to furnish a return to it in such form, in such manner and for such period as may be specified by the Bank.

(3) If the amount invested by a non-banking financial company at the close of business on any day falls below the rate specified under sub-section (1), such company shall be liable to pay to the Bank, in respect of such shortfall, a penal interest at a rate of three per cent, per annum above the bank rate on such amount by which the amount actually invested falls short of the specified percentage, and where the shortfall continues in the subsequent quarters, the rate of penal interest shall be five per cent, per annum above the bank rate on such shortfall for each subsequent quarter.

(4) (a) The penal interest payable under sub-section (3) shall be payable within a period of fourteen days from the date on which a notice issued by the Bank demanding payment of the same is served on the non-banking financial company and, in the event of a failure of the non-banking financial company to pay the same within such period, penalty may be levied by a direction of the principal civil court having jurisdiction in the area where an office of the defaulting non-banking financial company is situated and such direction shall be made only upon an application made in this behalf to the court by the Bank; and

(b) When the court makes a direction under clause (a), it shall issue a certificate specifying the sum payable by the non-banking financial company and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a suit.

(5) Notwithstanding anything contained in this section, if the Bank is satisfied that the defaulting non-banking financial company had sufficient cause for its failure to comply with the provisions of sub-section (1), it may not demand the payment of the penal interest.

Explanation
.-For the purpose of this section,-

(i) "Approved securities" means securities of any State Government or of the Central Government and such bonds, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by any such Government;

(ii) "Unencumbered approved securities" includes the approved securities lodged by the non-banking financial company with another institution for an advance or any other arrangement to the extent to which such securities have not been drawn against or availed of or encumbered in any manner;

(iii) "Quarter" means the period of three months ending on the last day of March, June, September or December.]

45IC -24* Reserve fund

(1) Every non-banking financial company shall create a reserve fund the transfer therein a sum not less than twenty per cent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.

(2) No appropriation of any sum from the reserve fund shall be made by the non-banking financial company except for the purpose as may be specified by the Bank from time to time and every such appropriation shall be reported to the Bank within twenty-one days from the date of such withdrawal:

Provided that the Bank may, in any particular case and for sufficient cause being shown, extend the period of twenty-one days by such further period as it thinks fit or condone any delay in making such report.

(3) Notwithstanding anything contained in sub-section (1), the Central Government may, on the recommendation of the Bank and having regard to the adequacy of the paid-up capital and reserves of a non-banking financial company in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not be applicable to the non-banking financial company for such period as may be specified in the order:

Provided that no such order shall be made unless the amount in the reserve fund under sub-section (1) together with the amount in the share premium account is not less than the paid-up capital of the non-banking financial company.]

45J - Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of money
 
The Bank may, if it consider necessary in the public interest so to do, by general or special order,-

(a) Regulate or prohibit the issue by any non-banking institution of any prospectus or advertisement soliciting deposits of money from the public, and

(b) Specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued.

45JA - 25* Power of Bank to determine policy and issue directions

(1) If the Bank is satisfied that, in the public interest or to regulate the financial system of the country to its advantage or to prevent the affairs of any non-banking financial company being conducted in manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of the non-banking financial company, it is necessary or expedient so to do, it may determine the policy and give directions to all or any of the non-banking financial companies relating to income recognition, accounting standards, making of proper provision for bad and doubtful debts, capital adequacy based on risk weights for assets and credit conversion factors for off balance-sheet items and also relating to deployment of funds by a non-banking financial company or a class of non-banking financial companies or non-banking financial companies generally, as the case may be, and such non-banking financial companies shall be bound to follow the policy so determined and the direction so issued.

(2) Without prejudice to the generality of the powers vested under subsection (1), the Bank may give directions to non-banking financial companies generally or to a class of non banking financial companies or to any non-banking financial company in particular as to-

(a) The purpose for which advances or other fund based or non-fund based accommodation may not be made; and

(b) The maximum amount of advances of other financial accommodation or investment in shares and other securities which, having regard to the paid-up capital, reserves and deposits of the non-banking financial company and other relevant considerations, may be made by that non-banking financial company to any person or a company or to a group of companies.]

45K - Power of Bank to collect information from non-banking institutions as to deposits and to give directions

(1) The Bank may at any time direct that every non-banking institution shall furnish to the Bank, in such form, at such intervals and within such time, such statements information or particulars relating to or connected with deposits received by the non-banking institution, as may be specified by the Bank by general or special order.

(2) Without prejudice to the generality of the power vested in the Bank under sub-section (1), the statements, information or particulars to be furnished under sub-section (1), may relate to all or any of the following matters, namely, the amount of the deposits, the purposes and periods for which, and the rates of interest and other terms and conditions on which, they are received.

(3) The Bank may, if it considers necessary in the public interest so to do, give directions to non-banking institutions either generally or to any non-banking institution or group of non-banking institutions in particular, in respect of any matters relating to or connected with the receipt of deposits, including the rates of interest payable on such deposits, and the periods for which deposits may be received.

(4) If any non-banking institution fails to comply with any direction given by the Bank under sub-section (3), the Bank may prohibit the acceptance of deposits by that non-banking institution.
26[***]

(6) Every non-banking institution receiving deposits shall, if so required by the Bank and within such time as the Bank may specify, cause to be sent at the cost of the non-banking institution a copy of its annual balance-sheet arid profit and loss account or other annual accounts to every person from whom the non-banking institution holds, as on the last day of the year to which the accounts relate, deposits higher than such sum as may be specified by the Bank.

45L - Power of Bank to call for information from financial institutions and to give directions

(1) If the Bank is satisfied for the purpose of enabling it to regulate the credit system of the country to its advantage it is necessary so to do, it may-

(a) Require financial institutions either generally or any group of financial institutions or financial institution in particular, to furnish to the Bank in such form, at such intervals and within such time, such statements, information or particulars relating to the business of such financial institutions or institution, as may be specified by the Bank by general or special order;

(b) Give to such institutions either generally or to any such institution in particular, directions relating to the conduct of business by them or by it as financial institutions or institution.

(2) Without prejudice to the generality of the power vested in the Bank under clause (a) of sub-section (1), the statements, information or particulars to be furnished by a financial institution may relate to all or any of the following matters, namely, the paid-up capital, reserves or other liabilities, the investments whether in Government securities or otherwise, the persons to whom, and the purposes and periods for which, finance is provided and the terms and conditions, including the rates of interest, on which it is provided.

(3) In issuing directions to any financial institution under clause (b) of subsection (1) the Bank shall have due regard to the conditions in which, and the objects for which, the institution has been established, its statutory responsibilities, if any, and the effect the business of such financial institution is likely to have on trends in the money and capital markets.

45M - Duty of non-banking institutions to furnish statements, etc., required by Bank

It shall be the duty or every non-banking institution to furnish the statements, information or particulars called for, and to comply with any direction given to it, under the provisions of this Chapter.

45MA -27* Powers and duties of auditors

(1) It shall be the duty of an auditor of a non-banking institution to inquire whether or not the non-banking institution has furnished to the Bank such statements, information or particulars relating to or connected with deposits received by it, as are required to be furnished under this Chapter, and the auditor shall, except where he is satisfied on such inquiry that the non-banking institution has furnished such statements, information or particulars, make a report to the Bank giving the aggregate amount of such deposits held by the non-banking institution.

28*[(1A) The Bank may, on being satisfied that it is necessary so to do, in the public interest or in the interest of the depositors or for the purpose of proper assessment of the books of accounts, issue directions to any non-banking financial company or any class of non-banking financial companies or non-banking financial companies generally or to the auditors of such non-banking financial company or companies relating to balance-sheet, profit and loss account, disclosure of liabilities in the books of accounts or any matter relating thereto.]

(2) Where, in the case of 29*[a non-banking financial company], the auditor has made, or intends to make, a report to the Bank under sub-section (1), he shall include in his report under sub-section (2) of section 227 of the Companies Act, 1956 (1 of 1956), the contents of the report which he has made or intends to make, to the Bank.]

28*[(3) Where the bank is of the opinion that it is necessary so to do in the public interest or in the interest of the non-banking financial company or in the interest of depositors of such company it may at any time by order direct that a special audit of the accounts of the non-banking financial company in relation to any such transaction or class of transactions or for such period or periods, as may be specified in the order, shall be conducted and the Bank may appoint an auditor or auditors to conduct such special audit and direct the auditor or the auditors to submit the report to it.

(4) The remuneration of the auditors as may be fixed by the Bank, having regard to the nature and volume of work involved in the audit and the expenses of or incidental to the audit, shall be borne by the non-banking financial company so audited.]

45MB -Power of Bank to prohibit acceptance of deposit and alienation of assets

(1) If any non-banking financial company violates the provisions of any section or fails to comply with any direction or order given by the Bank under any of the provisions of this Chapter, the Bank may prohibit the non-banking financial company from accepting any deposit.

(2) Notwithstanding anything to the contrary contained in any agreement or instruments or any law for the time being in force, the Bank, on being satisfied that it is necessary so to do in the public interest or in the interest of the depositors, may direct, the non-banking financial company against which an order prohibiting from accepting deposit has been issued, not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of the Bank for such period not exceeding six months from the date of the order.]

45MC - 30*Power of Bank to file winding up petition

(1) The Bank, on being satisfied that a non-banking financial company-

(a) Is unable to pay its debt; or

(b) Has by virtue of the provisions of section 45IA become disqualified to carry on the business of a non-banking financial institution; or

(c) Has been prohibited by the Bank from receiving deposit by an order and such order has been in force for a period of not less than three months; or

(d) The continuance of the non-banking financial company is detrimental to the public interest or to the interest of depositors of the company,may file an application for winding up of such non-banking financial company under the Companies Act, 1956 (1 of 1956).

(2) A non-banking financial company shall be deemed to be unable to pay its debt if it has refused or has failed to meet within five working days any lawful demand made at any to its offices or branches and the Bank certifies in writing that such company is unable to pay its debt.

(3) A copy of every application made by the Bank under sub-section (1) shall be sent to the Registrar of Companies.

(4) All the provisions of the Companies Act, 1956 (1 of 1956) relating to winding up of a company shall apply to a winding up proceeding initiated on the application made by the Bank under this provision.]

45N - Inspection

31*[(1) The Bank may, at any time, cause an inspection to be made by one or more of its officers or employees or other persons (hereafter in this section referred to as the inspecting authority)-

(i) Of any non-banking institution, including a financial institution, for the purposes of verifying the correctness or completeness of any statement, information or particulars furnished to the Bank or for the purpose of obtaining any information or particulars which the non-banking institution has failed to furnish on being called upon to do so; or

(ii) Of any non-banking institution being a financial institution, if the Bank considers it necessary or expedient to inspect that institution.]

(2) It shall be the duly of every director or member of any committee or other body for the time being vested with the management of the affairs of the non-banking institution or other officer or employee thereof to produce to the inspecting authority all such books, accounts and other documents in his custody or power and to furnish that authority with any statements and information relating to the business of the institution as that authority may require of him, within such time as may be specified by that authority.

(3) The inspecting authority may examine on oath any director or member of any committee or body for the time being vested with the management of the affairs of the non-banking institution or other officer or employee thereof, in relation to its business and may administer an oath accordingly.

45NA - 32*Deposits not to be solicited by unauthorised person

No person shall solicit on behalf of any non-banking institution either by publishing or causing to be published any prospectus or advertisement or in any other manner deposits of money from the public unless-

(a) He has been authorised in writing by the said non-banking institution to do so and specifies the name of the institution which has so authorised him, and

(b) The prospectus or advertisement complies with any order made by the Bank under section 45J and with any other provision of law for the time being in force, applicable to the publication of such prospectus or advertisement.]

45NB - 33*Disclosure of information

(1) Any information relating to a non-banking financial company,-

(i) Contained in any statement or return submitted by such company under the provisions of this chapter; or

(ii) Obtained through audit or inspection or otherwise by the Bank,shall be treated as confidential and shall not, except otherwise provided in this section, be disclosed.

(2) Nothing in this section shall apply to-

(a) The disclosure by any non-banking financial company, with the previous permission of the Bank, of any information furnished to the Bank under sub-section (1);

(b) The publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under sub-section (1) in such consolidated form as it may think fit without disclosing the name of any non-banking financial company or its borrowers;

(c) The disclosure or publication by the non-banking financial company or by the Bank of any such information to any other non-banking financial company or in accordance with the practice and usage customary amongst such companies or as permitted or required under any other law:

Provided that any such information received by a non-banking financial company under this clause shall not be published except in accordance with the practice and usage customary amongst companies or as permitted or required under any other law.

(3) Notwithstanding anything contained in this Act or in any other law for the time being in force, the Bank, if it is satisfied that, in the public interest or in the interest of the depositors or the non-banking financial company or to prevent the affairs of any non-banking financial company being conducted in a manner detrimental to the interest of the depositors, it is expedient so to do, may, either on its own motion or on being requested, furnish or communicate any information relating to the conduct of business by any non-banking financial company to any authority constituted under any law.

(4) Notwithstanding anything contained in any law for the time being in force, no court or tribunal or other authority shall compel the Bank to produce or to give inspection of any statement or other material obtained by the Bank under any provisions of this chapter.]

45NC - 34* Power of Bank to exempt

The Bank, on being satisfied that it is necessary so to do, may declare by notification in the Official Gazette that any or all of the provisions of this Chapter shall not apply to a non-banking institution or a class of non-banking institutions or a non-banking financial company or to any class or non-banking financial companies either generally or for such period as may be specified, subject to such conditions, limitations or restrictions as it may think fit to impose.]

45O - Penalties (Repealed)

[Rep. by the Reserve Bank of India (Amendment )Act, 1974, (51 of 1974). section 22 (w.e.f. 13-12-1974).]

45P - Cognizance of offence (Repealed)

[Rep. by the Reserve Bank of India (Amendment) Act,1974, section22 (w.e.f. 13-12-1974).]

45Q - Chapter IIIB to override other laws

The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.]

45QA - 35* Power of Company Law Board to offer repayment of deposit

(1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and condition of such deposit.

(2) Where a non-banking financial company has failed to repay and deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board constituted under section 10E of the Companies Act, 1956 (1 of 1956), may, if it is satisfied, either on its own motion or on an application of the depositor, that it is necessary so to do to safeguard the interests of the company, the depositors or in the public interest, direct, by order, the non-banking financial company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order:

Provided
that the Company Law Board may, before making any order under this sub-section, give a reasonable opportunity of being heard to the non-banking financial company and the other persons interested in the matter.]

45QB - 36*Nomination by depositors

(1) Where a deposit is held by a non-banking financial institution to the credit of one or more persons, the depositor or, as the case may be, all the depositors together may nominate, in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949), 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 non-banking financial institution.

(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 purports to confer on any person the right to receive the amount of deposit from the non-banking financial institution, 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, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949).

(3) Where the nominee is a minor, it shall be lawful for the depositor making the nomination to appoint, in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949), any person to receive the amount of deposit in the event of his death during the minority of the nominee.

(4) Payment by a non-banking institution in accordance with the provisions of this section shall constitute a full discharge to the non-banking institution of its liability in respect of the deposit:-

Provided
that nothing contained in this sub-section shall effect the right or claim which any person may have against the person to whom any payment is made under this section.

(5) No notice of the claim of any person, other than the person or persons in whose name a deposit is held by a non-banking institution, shall be receivable by the non-banking institution, nor shall the non-banking institution 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 deposit is produced before a non-banking institution, the non-banking institution shall take due note of such decree, order, certificate or other authority.]

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1. Substituted by Act 61 of 1981, section 61 and Schedule II, for section 45 (w.e.f. 12-7-1982).

2. Substituted by Act 51 of 1974, section 3, for "Banking Companies Act, 1949 (w.e.f. 13-12-1974).

3. Substituted by Act 51 of 1974, section 13, for certain words (w.e.f. 13-12-1974).

4. Inserted by Act 51 of 1974, section 13 (w.e.f. 13-12-1974).

5. Substituted by Act 51 of 1974, section 13, for "granted to him; and" (w.e.f. 13-12-1974).

6. Inserted by Act 51 of 1974, section 14.

7. Inserted vide Credit Information Companies (Regulation) Act, 2005

8. Substituted by Act 51 of 1974, section 3, for "Banking Companies Act 1949" (w.e.f. 13-12-1974).

9. Substituted by Act 1 of 1984, section 8, for certain words (w.e.f. 15-2-1984).

10. Substituted by Act 21 of 1976, section 33, for "a co-operative bank" (w.e.f. 26-9-1 975).

11. Substituted by Act 51 of 1974, section 16, for "Madras Industrial Investment Corporation Limited".

12. Inserted by Act 23 of 1997, section 2 (w.r.e.f. 9-1-1997).

13. Clause (a) re-numberred as clause (aa) by Act 23 of 1997, section 2 (w.r.e.f. 9-1-1997).

14. Clause (bb) Inserted by Act 51 of 1974, section 17 (w.e.f. 13-12-1974) and Substituted by Act 1 of 1984, section 9 (w.e.f. 15-2-1984).

15. Item "(a) the Development Bank" omitted by Act 53 of 2003, section 12 and Schedule, Pt. I.

16. Substituted by Act 51 of 1974, section 17, for clause (c) (w.e.f. 13-12-1974).

17. Substituted by Act 23 of 1997, section 2, for certain words (w.r.e.f. 9-1-1997 ).

18. Inserted by Act 23 of 1997, section 2 (w.e.f. 9-1-1997).

19. Certain words omitted by Act 1 of 1984, section 9 (w.e.f. 15-2-1984).

20. Substituted by Act 1 of 1984, section 9, for ", co-operative society or firm" (w.e.f. 15-2-1984).

21. Inserted by Act 23 of 1997, section 2 (w.r.e.f. 9-1-1997).

22. Inserted by Act 23 of 1997, section 3 (w.r.e.f 9-1-1997).

23. Inserted by Act 23 of 1997, section 3 (w.e.f. 9-1-1997).

24. Inserted by Act 23 of 1997, section 3 (w.r.e.f. 9-1-1997).

25. Inserted by Act 23 of 1997, section 4 (w.r.e.f. 9-1-1997).

26. Sub-section (5) omitted by Act 51 of 1974, section 18 (w.e.f. 13-12-1974).

27. Inserted by Act 51 of 1974, section 19 (w.e.f. 13-12-1974).

28. Inserted by Act 23 of 1997, section 5 (w.r.e.f. 9-1-1997).

29. Substituted by Act 23 of 1997, section 5, for "a non-banking institution, being a company" (w.r.e.f. 9-1-1997).

30. Inserted by Act 23 of 1997, section 6 (w.r.e.f. 9-1-1997).

31. Substituted by Act 51 of 1974, section 20, for sub-section (1) (w.e.f. 13-12-1997).

32. Inserted by Act 51 of 1974, section 21 (w.e.f. 13-12-1974).
 
33. Inserted by Act 23 of 1997, section 8 (w.r.e.f. 9-1-1997).

34. Inserted by Act 23 of 1997, section 7 (w.r.e.f. 9-1-1997).

35. Inserted by Act 23 of 1997, section 8 (w.r.e.f. 9-1-1997).

36. Inserted by Act 23 of 1997, section 8 (w.r.e.f. 9-1-1997).

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Last updated on September, 2016

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