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THE RESERVE BANK OF INDIA ACT, 1934

Title : THE RESERVE BANK OF INDIA ACT, 1934

Year : 1934



The 1*[Central Government] shall transfer to the Bank rupee securities to the value of five crores of rupees to be allocated by the Bank to the Reserve Fund.

46A - 2*Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund.

The Bank shall contribute every year such sums of money as it may consider necessary and feasible to do so, to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established and maintained by the National Bank under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981.]

46B (Omitted)

3*[Omitted]

46C - 4*National Industrial Credit (Long Term Operations) Fund

(1) The Bank shall establish and maintain a Fund to be known as the National Industrial Credit (Long Term Operations) Fund to which shall be credited-

(a) An initial sum of ten crores of rupees by the Bank;

(b) Such further sums of money as the Bank may contribute every year:

Provided that the annual contribution during each of the five years commencing with the year ending on the 30th day of June, 1965 shall not be less than five crores of rupees:

Provided further that the Central Government may, if the circumstances so require, authorise the Bank to reduce the said sum of five crores of rupees in any year.

(2) The amount in the said fund shall be applied by the Bank only to the following objects, namely:-

5 [***]

6*[(c) The making to the Exim Bank 7*[or the Reconstruction Bank 8*[or the Small Industries Bank], as the case may be] of loans and advances for the purposes of any business of the Exim Bank 7*[or the Reconstruction Bank 8*[or the Small Industries Bank], as the case may be];

(d) The purchasing of bonds and debentures issued by the Exim Bank 7*[or the Reconstruction Bank, 9*[or the Small Industries Bank], as the case may be.]

46D -10*National Housing Credit (Long Term Operations) Fund

(1) The Bank shall establish and maintain a Fund to be known as the National Housing Credit (Long Term Operations) Fund to which shall be credited every year such sums of money as it may consider necessary.

(2) The amount in the said Fund shall be applied by the Bank only to the following objects namely:-

(a) The making to the National Housing Bank of loans and advances for the purpose of any business of the National Housing Bank;

(b) The purchasing of bonds and debentures issued by the National Housing Bank.]

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

2. Substituted by Act 61 of 1981, section 61 and Schedule II, for sections 46A and 46B (w.e.f. 12-7-1982).

3.Section 46-B omitted by National Bank for Agriculture & Rural Development Act, 1981 [61 of 1981] (w.e.f. 12-7-1982).

4. Inserted by Act 18 of 1964, section 38 and Sch,, II (w.e.f. 1-7-1964).

5. Clauses "(a) the making to the Development Bank of loans and advances for the purpose of the purchase of, or subscription to, stocks, shares, bonds or debentures issued by the Industrial Finance Corporation of India, a State Financial Corporation or any other financial institution which may be notified by the Central Government in this behalf, or for the purposes of any other business of the Development Bank; (b) the purchasing of bonds and debentures issued by the Development Bank." omitted by Act 53 of 2003, section 12 and Schedule, Ft. I.

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

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

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

9. The proviso and sub-section (2) omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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

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After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation fund 2*[and for all other matters for which] provision is to be made by or under this Act or which are usually provided for by bankers, the balance, of the profits shall be paid to the Central Government.

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1. Substituted by Act 62 of 1948, section 7 and Schedule, for section 47 (w.e.f. 1-1-1949).

2. Substituted by Act 24 of 1955, section 8, for "and such other contingencies as".

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(1) Notwithstanding anything contained in the 1*[Income-tax Act, 1961 (43 of 1961)] or any other enactment for the time being in force relating to income-tax or super-tax, the bank shall not be liable to pay income-tax or super-tax on any of its income, profits or gains.

2 [***]

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1. Substituted by Act 24 of 1978, section 8, for "Indian Income-tax Act, 1922" (w.e.f. 21-7-1978).

2. The proviso and sub-section (2) omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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The Bank shall make public from time to time the standard rate at which it is prepared to buy or re-discount bills of exchange or other commercial paper eligible for purchase under this Act.



(1) Not less than two auditors shall be appointed, and their remuneration fixed, by the Central Government.

(2) The auditors shall hold office for such term not exceeding one year as the Central Government may fix while appointing them, and shall be eligible for re-appointment.

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1. Substituted by Act 62 of 1948, section 7 and Schedule, for section 50 (w.e.f. 1-1-1949).

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Without prejudice to anything contained in section 50, the 1*[Central Government] may at any time appoint the 2*[Comptroller and Auditor-General]3[***] to examine and report upon the accounts of the Bank.

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

2. Substituted by Act 32 of 1951, section 18, for "Auditor General" (w.e.f. 1-11-1951).

3. The words "or such auditors as it thinks fit" omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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(1) Every auditor shall be supplied with a copy of the annual balance-sheet, and it shall be his duty to examine the same, together with the accounts and vouchers relating thereto; and every auditor shall have a list delivered to him of all books kept by the Bank, and shall at all reasonable time have access to the books, accounts and other documents of the Bank, and may at the expense of the Bank 1 [***] employ accountants or other person to assist him in investigating such accounts, and may, in relation to such accounts, examine any Director or officer of the Bank.

(2) The auditors shall make a report 2 [***] to the 3 [Central Government] 4 [***] upon the annual balance-sheet and accounts, and in every such report they shall state whether, in their opinion, the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of the Bank's affairs, and, in case they have called for any explanation or information from the Central Board, whether it has been given and whether it is satisfactory 5 [***].

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1. Certain words omitted by Act 24 of 1955, section 9 (w.e.f. 8-5-1955).

2. The words "to the shareholders or" omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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

4. The words "as the case may be" omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

5. Certain words omitted by Act 62 of 1948, section 7 and Schedule, (w.e.f. 1-1-1949).

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(1) The Bank shall prepare and transmit to the 1*[Central Government] a weekly account of the Issue Department and of the Banking Department in 2*[such] form as the 3*[Central Government] may, by notification in the Gazette of India, prescribe. The 1*[Central Government] shall cause these accounts to be 4*[published in the Gazette of India at such intervals and in such modified form as it may deem fit].

(2) The Batik shall also, within two months from the date on which the annual accounts of the Bank are closed, transmit to the 3*[Central Government] a copy of the annual accounts signed by the Governor, the Deputy Governors and the Chief Accounting Officer of the Bank, and certified by the auditors, together with a report by the Central Board on the working of the Bank throughout the year, and the 3*[Central Government] shall cause such accounts and report to be published in the Gazette of India.

5[***]

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1. The words "or such auditors as it thinks fit" omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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

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

4. Substituted by Act 24 of 1978, section 9, for certain words (w.e.f. 21-7-1978).

5. Sub-section (3) omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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The Bank may maintain expert staff to study various aspects of rural credit and development and in particular it may:-

(a) Tender expert guidance and assistance to the National Bank;

(b) Conduct special studies in such areas as it may consider necessary to do so for promoting integrated rural development.]

54A - 2*Delegation of powers

(1) The Governor may, by general or special order, delegate to a Deputy Governor, subjects to such conditions and limitations, if any, as may be specified in the order, such of the powers and functions exercisable by him 3[***] under this Act or under any other law for the time being in force as he may deem necessary for the efficient administration of the functions of the Bank.

(2) The fact that a Deputy Governor exercises any power or does any act or thing in pursuance of this Act shall be conclusive proof of his authority to do so.]

54AA -4* Power of Bank to depute its employees to other institutions

5*[(1) The Bank may, notwithstanding anything contained in any law, or in any agreement, for the time being in force, depute any member of its staff for such period as it may think fit,-

(a) To any institution which is wholly or substantially owned by the Bank;

(b) To the Development Bank, so, however, that no such deputation shall continue after the expiration of thirty months from the commencement of section 5 of the Public Financial Institutions Laws (Amendment) Act, 1975;

(c) To the Unit Trust, so, however, that no such deputation shall continue after the expiration of thirty months from the date notified by the Central Government under sub-section (1) of section 4A of the Unit Trust of India Act, 1963 (52 of 1963);and thereupon the person so deputed shall, during the period of his deputation, render such service to the institution to which he is so deputed as that institution may require.]

(2) Where a person has been deputed to an institution under sub-section (1), he shall not be entitled to claim any salary, emoluments and other terms and conditions of service which he would not have been entitled to claim if he had not been so deputed.

(3) Nothing contained in this section shall empower the Bank to depute any member of its staff to any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled immediately before such deputation.

(4) For the purposes of this section, an institution shall be deemed to be substantially owned by the Bank if in the capital of the institution the Bank has not less than forty per cent, share.

Explanation
.-The word "capital" means, in relation to the Unit Trust, the initial capital of the Trust.]

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1. Substituted by Act 61 of 1981, section 61 and Schedule II, for section 54 (w.e.f. 1-5-1982).

2. Inserted by Act 24 of 1955, section 10 (w.e.f. 8-5-1955).

3. The words "by or" omitted by Act 58 of 1960, section 3 and Schedule II (w.e.f. 26-12-1960).

4. Inserted by Act 58 of 1968, section 28 (w.e.f. 1-2-1969).

5. Substituted by Act 52 of 1975, section 20, for sub-section (1) (w.e.f. 16-2-1976).

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[Rep. by the Reserve Bank (Transfer to Public Ownership) Act, 1948 (62 of 1948), section 7 and Schedule (w.e.f. 1-1-1949).]



[Rep. by the Reserve Bank (Transfer to Public Ownership) Act, 1948 (62 of 1948), section 7 and Schedule (w.e.f. 1-1-1949).]



(1) Nothing in the1*[Companies Act, 1956 (1 of 1956)] shall apply to the Bank and the Bank shall not be placed in liquidation save by order of the 2*[Central Government] and in such manner as3*[it may direct].

4[***]

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1. Substituted by Act 19 of 1957, section 5, for "Indian Companies Act, 1913 (7 of 1913)".

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

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

4. Sub-section (2) omitted by Act 62 of 1948, section 7 and Schedule (w.e.f. 1-1-1949).

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Last updated on September, 2016

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