The Banking Regulation Act,1949 (Bare Act)/ Universal Law Publishing

THE BANKING REGULATION ACT, 194^
PART I
PRELIMINARY
1. Short title, extent and commencement 5 2. Application of other laws not barred 5 3. Act to apply to co-operative societies in certain cases 6 4. Power to suspend operation of Act 6 5. Interpretation ^ 5A. Act to override memorandum, articles, etc. . 10

BUSINESS OF BANKING COMPANIES
6. Forms of business in which banking companies may engage . 10 7. Use of words "bank", "banker", "banking" or "banking company" 12 8. Prohibition of trading ,13 9. Disposal of non-banking assets ^ 13 10. Prohibition of employment of managing agents and restrictions on certain forms of employment . . . 13 lOA. Board of directors to include persons with professional . or other experience • • " 103. Banking company to be managed by whole time chairman . . 17 lOBB. Power of Reserve Bank to appoint chairman of the board of direcors appointed on a whole-time basis or a managing director of a banking company . . . 20 IOC. Chairman and certain directors not to be required to hold qualification shares . . . 21
lOD. Provisions of sections lOA and lOB to override all other laws, contracts, etc. . . . 21 11. Requirement as to minimum paid-up capital and reserves . . 21 12. Regulation of paid-up capital, subscribed capital and authorised capital and voting rights of shareholders 23 \2t\. Election of new directors 24
13. Restriction on commission, brokerage, discount, etc. on sale of shares ^ 25 14. Prohibition of charge on unpaid capital 25 14A. Prohibition of floating charge on assets 25

Restrictions as to payment of dividend
Prohibition of common directors
Reserve Fund
Cash reserve
Restriction on nature of subsidiary companies
Restrictions on loans and advances
Restrictions on power to remit debts
Power of Reserve Bank to control advances by banking companies
Rates of interest charged by banking companies not to be subject to scrutiny by courts Licensing of banking companies Restrictions on opening of new, and transfer of existing, places of business Maintenance of a percentage of assets
Assets in India
Return of unclaimed deposits Monthly returns and power to call for other rehirns
and information
Power to publish information
Accounts and balance-sheet
Audit
Submission of returns Copies of balance-sheets and accounts to be sent to registrar Display of audited balance-sheet by companies incorporated outside India Accounting provisions of this Act not retrospective Production of documents of confidential nature
Inspection Power of the Reserve Bank to give directions Amendments of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Reserve Bank Further powers and functions of Reserve Banks Certain provisions of the Act not to apply to certain banking companies ' \
PART llA QONTROL over MANAGEMENT Power of Reserve Bank to remove managerial and other persons from office Power of Reserve Bank to appoint additional directors.

36AC. Part IIA to override other laws 52
PART IIB
PROHIBITION OF CERTAIN ACTIVITIES IN RELATION TO
BANKING COMPANIES
36AD. Punishments for certain activities in relation to banking companies . . . 52
PART lie
ACQUISITION OF THE UNDERTAKINGS OF BANKING
COMPANIES IN CERTAIN CASES
36AE. Power of Central Government to acquire undertakings of banking companies in certain cases . . . 53
36AF. Power of the Central Government to make scheme . . . 55
36AG. Compensation to be given to shareholders of the acquired bank . 56
36AH. Constitution of the Tribunal . . . 57
36A1. Tribunal to have powers of a civil court . . . . 57
36AJ. Procedure of the Tribunal . . . 58
PART 111
SUSPENSION OF BUSINESS AND WINDING UP OF
BANKING COMPANIES
36B. High Court defined . . . 58
37. Suspension of business . . . 58
38. Winding up by High Court . . . 59
38A. Court liquidator . • > . . 60
39. Reserve Bank to be official liquidator . . . 60
39A. Application of Companies Act to liquidators . . . 61
40. Stay of proceedings . . . 61
41. Preliminary report by official liquidator . . . 61
41A. Notice to preferential claimants and secured and
unsecured creditors . . . 61
42. Power to dispense with meetings of creditors, etc. . . . 62
43. Booked depositors' credits to be deemed proved . . . 62 43A. Preferential payments to depositors . . . 63 44. Powers of High Court in voluntary winding up . . . 65 44A. Procedure for amalgamation of banking companies . . . 65
44B. Restriction on compromise or arrangement between banking company and creditors . . . 67
45. Power of Reserve "Bank to apply to Central Government for suspension of business by a banking company and to prepare scheme of reconstitution of amalgamation . . . 67
PART UIA
SPECIAL PROVISIONS FOR SPEEDY DISPOSAL OF
WINDING UP PROCEEDINGS
45A. Part III A to override other laws
y
45B. Power of High Court to decide all claims in respect of banking companies
45C. Transfer of pending proceedings
45D. Settlement of list of debtors
45E. Special provisions to make calls on contributories
45F. Documents of banking company to be evidence
45G. Public examination of directors and auditors
45H. Special provisions for assessing damages against delinquent directors, etc.
451. Duty of directors and officers of banking company to assist in the realisation of property 45J. Special provisions for punishing offences in relation to banking companies being wound up
45K. Power of High Court to enforce schemes of arrangements, etc.
45L. Public examination of directors and auditors, etc., in respect of a banking company under schemes of arrangement. 45M. Special provisions for banking companies working under schemes of arrangement at the commencement of the Amendment Act
45N. Appeals
450. Special period of limitation 45P. Reserve Bank to tender advice in winding up proceedings .
45Q. Power to inspect
45R. Power to call for returns dnd information 45S. Chief Presidency Magistrate and District Magistrate to assist official liquidator in taking charge of property of banking company being wound up 45T. Enforcement of orders and decisions of High Court
45U. Power of High Court to make rules 45V. References to directors, etc., shall be construed as including references to past directors, etc. 45W. Part II not to apply to banking companies being wound up.
45X. Validation of certain proceedings
part lllB PROVISIONS "kELATING TO CERTAIN OPERATIONS OF BANKING COMPANIES
45Y. Power of Central Government to make rules for the preservation of records
45Z. Return of paid instruments to customers

45ZA. Nomination for payment of depositors' money.
45ZB. Notice of claims of other persons regarding deposits
not receivable
45ZC. Nomination for return of articles kept in safe custody / with banking company
45ZD. Notice of claims of other persons regarding articles
not receivable
45ZE. Release of contents of safety lockers 45ZF. Notice of claims of other persons regarding safety lockers
not receivable
PART IV
MISCELLANEOUS .
46. Penalties
46A. Chairman, director, etc., to be public servants for the purposes of Chapter IX of the Indian Penal Code
47. Cognizance of offences ^
47A. Power of Reserve Bank to impose penalty
48. Application of fines 49. Special provisions for private banking companies
49A. Restriction on acceptance of deposits withdrawable by cheque
49B. Change of name by a banking company
49C. Alteration of memorandum of a banking company
50. Certain claims for compensation barred 51. Application of certain provisions to the State Bank of India and other notified banks
52. Power of Central Government to make rules
53. Power to exempt in certain cases
54. Protection of action taken under Act
55. Amendment of Act 2 of 1934
55A. Power to remove difficulties
PART V
APPLICATION OF THE ACT TO CO-OPERATIVE BANKS
56. Act to apply to co-operative societies subject to modifications
THE FIRST SCHEDULE—Amendments
THE SECOND SCHEDULE [Repenled]
THE THIRD SCHEDULE
FORM A.—Form of Balance Sheet
FORM B.—Form of Profit and Loss Account
THE FOURTH SCHEDULE—List of Debtors
THE FIFTH SCHEDULE—Principles of Compensation

THE BANKING REGULATION (COMPANIES) RULES, 1949
1. Short title, extent and commencement 2. Interpretation 2A. Application of rules to State Bank of India, subsidiary banks, corresponding New Banks and Regional Rural Banks
3. Submission of returns
4. List of Officers
5. [Omitted]
5A. Determination of the Directors who are to cease
to hold office
6. Deposits 7. Withdrawals of Deposits
8. Changes in Deposits 9. Maturing of Security Deposits
10. Interest on Deposits
IDA. [Omitted] 11. Licensing of Banking Companies 12. Opening of New Places of Business
13. List of Offices
13A. Return under sections 18 and 24 14. Publication of approved currencies and securities
14A. Return under sections 25 and 27
14B. Return under section 26 15. Manner of publication of accounts and balance-sheet
15A.
15B. Manner of holding inquiries
16. Power to exempt in certain cases FORM I—[Om/»cd] FORM II— [Format of certificate of deposits specified in subsection (2) of section 11 of the Banking Regulation Act. 1949See rules 6 and 8] FORM III—Form of application for a licence to commence banking business by a company incorporated in India and desiring to commence banking business FORM IV—Form of application for a licence to carry on banking business by a company incorporated in India and in existence on the commencement
of the Act form V— Form of application for a licence to commence/ carry on banking business in India by a banking company incorporated outside India FORM VI—Form of application for permission to open a new place of business or change the location (Otherwise than withm the same city, town or village) of an existing place of business imder section 23 of the Act

FORM VII—[Fonnnt of list relating to offices in India—See rule 13] . . 148
FORM VIII—Statement of demand and time liabilities and cash< gold and unencumbered approved securities . . . 149 FORM IX— Return of unclaimed deposit accounts in India which have not been operated upon for 10 years or more as on the date of the return . / . , . 152
FORM X— Liabilities an Assets in India of Commercial Banks as on the last Friday of the month of 20 . . 153 FORM XI— [Format of list of debtors under section 45D of the Act— See rule ISA] • • 157
THE BANKING COMPANIES (NOMINATION) RULES, 1985
Rules 4, 1. Short title and commencement . . . 158 2. Nomination in respect of deposits . . . 158 3. Nomination in respect of articles in safe custody . . . 159 4. Nomination in respect of safety lockers . . '. 159 FORM DA 1—Nomination under section 45ZA of the Banking Regulation Act, 1949 and the rule 2(1) of the Banking Companies (Nomination) Rules, 1985, in respect of bank deposits . . 160
FORM DA 2—Cancellation of nomination under section 45ZA of the Banking Regulation Act, 1949 and rule 2(5) of the Banking Companies (Nomination) Rules, 1985, in respect of bank deposit . . . 161
FORM DA 3—Variation of nomination under section 45ZA of the Banking Regulation Act, 1949 and rule 2(6) of the Banking Companies (Nomination) Rules, 1985, in respect of bank deposits . . • 161 FORM SC 1—Nomination under section 45ZC of the Banking Regulation Act, 1949 and rule 3(1) of the Banking Companies (Nomination) Rules, 1985, in respect of articles left in safe custody with banking company . . 162 FORM SC 2—Cancellation of nomination under section 45ZC of the Banking Regulation Act, 1949 and rule 3(4) of the Banking Companies (Nomination) Rules, 1985, in respect of articles left in safe custody with banking
company
FORM SC 3—Variation of nomination under section 45ZC of the Banking Regulation Act, 1949 and rule 3(5) of the Banking Companies (Nomination) Rules, 1985, in respect of articles left in safe custody with banking
company FORM SL 1—Nomination under section 45ZE of the Banking Regulation Act, 1949, and rule 4(1) of the Banking Companies (Nomination) Rules, 1985, by sole hirer in respect of safety locker . . . 164
162
163
FORM SL lA—Nomination under section 45ZE of the Banking Regulation Act, 1949, and rule 4(2) of the Banking Companies (Nomination) Rules, 1985, by joint hirers in respect of safety locker . . . 164
FORM SL 2—Cancellation of nomination under sections 45ZE,and 52 of the Banking Regulation Act, 1949, and rule 4(5) of the Banking Companies (Nomination) Rules, 1985, in respect of safety locker . . 165
FORM SL 3—Variation of nomination under sections 45ZE and 52 of the Banking Regulation Act, 1949, and rule 4(6) the Banking Companies (Nomination) Rules, 1985, by sole hirer in respect of safety locker . . . 165
FORM SL 3A—Variation of nomination under sections 45ZE and 52 i of the Banking Regulation Act, 1949, and rule 4(7) the Banking Companies (Nomination) Rules, 1985, by joint hirers in respect of safety locker . . . 166
THE BANKING COMPANIES (PERIOD OF PRESERVATION OF RECORDS) RULES, 1985
Rules 1. Short title and commencement ■ • • 167 2. . . . 167 2. . . . 167 4. . . . 168
/ THE BANKING REGULATION (CO-OPERATIVE SOCIETIES) RULES, 1966
1. Short title and commencement
2. Definitions
3. Submission of returns
4. List of Officers 5. Form of statement of liabilities and cash reserve and other assets 6. Licensing of co-operative societies 7. Opening of new places of business
8.
9. Other returns 10. Manner of publication of accounts and balance-sheet 11. Manner of holding inquiries 12. Banking Companies Rules, 1949, not to apply FORM I—Statement of demand and time liabilities in India and amount maintained in India in cash, gold and unencumbered securities • • • FORM II [Form of stalemeiit of linbilities and cash reserve and other assets—See ride 5] . . . 178

FORM IlIA—Form of application for a licence to commence banking business by a Co-operative Society registered in India with the object of commencing banking business as a primary Co-operative Bank . . 179 FORM IIIB—Form of application for a licence to commence banking business by a Co-operative Society registered in India with the object of commencing banking business as a Central Co-operative Bank . , 183 FORM IIIC—Form of application for a licence to commence banking business by a Co-operative Society registered in India with tlie object of commencing banking business as a State Co-operative Bank . . 186 FORM IV— Form of application for a licence to carry on i banking business by a Co-operative Society which was carrying on business as a Co-operative Bank at the commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965), or by a Co-operative Bank which has come into existence as a result of the division of any other Co-operative Society carrying on business as Co-operative Bank or the amalgamation of two or more co-operative societies carrying on banking business or by a primary credit society which becomes a primary Co-operative Bank after such commencement . . 190 FORM V— Form of application for permission to open a new i place of business or change the location (otherwise than within the same city, town or village) of an existing place of business under section 23 of the Act. . 192 FORM VI—[Stntewciit of offices of a Co-operative Bank—See rule 9] . . 196 FORM VII—[Omitted] . . 197 FORM VIII—Return of unclaimed deposit accounts in India which have not been operated upon for ten years or more as oh the date of the return . . . 197 FORM IX—Statement shoyving the assets and liabilities in India as at the clause of business . . 198
THE CO-OPERATIVE BANKS (NOMINATION) RULES, 1985
Rules 1. Short title and commencement . . . 203 2. Notification in respect of deposits . . . 203 3. Nomination in respect of articles in safe custody . . . 204 4. Nomination in respect of safety locker . . . 204 FORM DA 1—Nomination under section 45ZA read with section 56 of the Banking Regulation Act, 1949, and rule 2(1) of the Co-operative Banks (Nomination) Rules, 1985, in respect of the bank deposits . . 205 FORM DA 2—Cancellation of nomination under section 45ZA read with section 56 of the Banking Regulation Act, 1949, and rule 2(5) of the Co-operative Banks (Nomination) Rules, 1985, in respect of the bank deposits . . . 206
FORM DA 3—Variation of nomination under section 45ZA read with section 56 of the Banking Regulation Act, 1949, and rule 2(6) of the Co-operative Banks (Nomination) Rules, 1985, in respect of the bank deposits . . 206
FORM SC 1—Nomination under section 45ZC read with section 56 of the Banking Regulation Act, 1949, and rule 3(1) of the Co-operative Banks (Nomination) Rules, 1985, in respect of articles left in safe custody with Co-operative Bank • • ■ 207 FORM SC 2—Cancellation of nomination under section 45ZC read with section 56 of the Banking Regulation Act, 1949, and rule 3(4) of the Co-operative Banks (Nomination) Rules, 1985, in respect of articles left in the safe custody with Co-operative Bank. . 207 FORM SC 3—Variation of nomination under section 45ZC read with section 56 of the Banking Regulation Act, 1949, and rule 3(5) of the Co-operative Banks (Nomination) Rules, 1985, in respect of articles left in the safe custody with Co-operative Bank • • . 208 FORM SL 1—Nomination under section 45ZE read with secti^on 56 of the Banking Regulation Act, 1949, and rule 4(1) of the Co-operative Banks (Nomination) Rules, 1985, by sole hirer in respect of safety locker • clt FORM SL lA—Nomination under section 45ZE read with sectwn 56 of the Banking Regulation Act, 1949, and rule 4(2) of the Co-operative Banks (Nomination) Rules, 1985, by joint hirer in respect of safety locker " j m FORM SL 2—Cancellation of nomination under sections f ^ read with section 56 of the Banking Regulation Act, 1949, and rule 4(5) of the Co-operative Banks (Nomination) Rules, 1985, in respect of safety locker ■ ■ ■ FORM SL 3--Variation of nomination under sections 45ZE and 52 read with section 56 of the Banking Regulation Act, 1949, and rule 4(6) of the Co-operative Banks (Nomination) Rules, 1985, by sole hirer in respect of safety locker . • FORM SL 3A—Variation of nomination under sections 45ZE 52 read with section 56 of the Banking Regulation Act, 1949, and rule 4(7) of the Co-operative Banks (Nomination) Rules, 1985, by joint hirers in respect of safety locker THE CO-OPERATIVE BANKS (PERIOD OF PRESERVATION