THE BANKING REGULATION ACT, 1949

PART I

SECTIONS
PART I
PRELIMINARY
1. Short title, extent and commencement.
2. Application of other laws not barred.
3. Act not to apply to certain co-operative societies.
4. Power to suspend operation of Act.
5. Interpretation.
5A. Act to override memorandum, articles, etc.

PART II

BUSINESS OF BANKING COMPANIES
6. Form of business in which banking companies may engage.
7. Use of words “bank”, “banker”, “banking” or “banking company”.
8. Prohibition of trading.
9. Disposal of non-banking assets.
10. Prohibition of employment of managing agents and restrictions on certain forms of
employment.
10A. Board of directors to include persons with professional or other experience.
10B. Banking company to be managed by whole time chairman.
10BB. Power of Reserve Bank to appoint chairman of the Board of directors appointed on a
whole-time basis or a managing director of a banking company.
10C. Chairman and certain directors not to be required to hold qualification shares.
10D. Provisions of sections 10A and 10B to override all other laws, contracts, etc.
11. Requirement as to minimum paid-up capital and reserves.
12. Regulation of paid-up capital, subscribed capital and authorised capital and voting rights of
shareholders.
12A. Election of new directors.
12B. Regulation of acquisition of shares or voting rights.
13. Restriction on commission, brokerage, discount, etc., on sale of shares.
14. Prohibition of charge on unpaid capital.
14A. Prohibition of floating charge on assets.
15. Restrictions as to payment of dividend.
16. Prohibition of common directors.
17. Reserve Fund.

18. Cash reserve.
19. Restriction on nature of subsidiary companies.
20. Restrictions on loans and advances.
20A. Restrictions on power to remit debts.
21. Power of Reserve Bank to control advances by banking companies.
21A. Rates of interest charged by banking companies not to be subject to scrutiny by courts.
22. Licensing of banking companies.
23. Restrictions on opening of new, and transfer of existing, places of business.
24. Maintenance of a percentage of assets.
25. Assets in India.
26. Return of unclaimed deposits.
26A. Establishment of Depositor Education and Awareness Fund.
27. Monthly returns and power to call for other returns and information.
28. Power to publish information.
29. Accounts and balance-sheet.
29A. Power in respect of associate enterprises.
30. Audit.
31. Submission of returns.
32. Copies of balance-sheets and accounts to be sent to registrar.
33. Display of audited balance-sheet by companies incorporated outside India.
34. Accounting provision of this Act not retrospective.
34A. Production of documents of confidential nature.
35. Inspection.
35A. Power of the Reserve Bank to give directions.
35B. Amendments of provisions relating to appointments of managing directors, etc., to be subject
to previous approval of the Reserve Bank.
36. Further powers and functions of Reserve Bank.
36A. Certain provisions of the Act not to apply to certain banking companies.

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