46. Penalties.—(1) Whoever in any return, balance-sheet or other document 1
[or in any information
required or furnished] by or under or for the purposes of any provision of this Act, wilfully makes a
statement which is false in any material particular, knowing it to be false, or wilfully omits to make a
material statement, shall be punishable with imprisonment for a term which may extend to three years
and 2
[or with fine, which may extend to one crore rupees or with both].
(2) If any person fails to produce any book, account or other document or to furnish any statement
or information which under sub-section (2) of section 35 it is his duty to produce or furnish, or to
answer any question relating to the business of a banking company which he is asked by 3
[an officer
making an inspection or scrutiny under that section], he shall be punishable with a fine which may
extend to 4
[twenty lakh rupees] in respect of each offence, and if he persists in such refusal, to a further
fine which may extend to 5
[fifty thousand rupees] for every day during which the offence continues.
(3) If any deposits are received by a banking company in contravention of an order under clause (a)
of sub-section (4) of section 35, every director or other officer of the banking company, unless he
proves that the contravention took place without his knowledge or that he exercised all due diligence to
1. Subs. by Act 95 of 1956, s. 9, for “required” (w.e.f. 14-1-1957).
2. Subs. by Act 4 of 2013, s. 11, for “and shall also be liable to fine” (w.e.f. 18-1-2013).
3. Subs. by Act 1 of 1984, s. 38, for “an officer making an inspection under that section” (w.e.f. 15-2-1984).
4. Subs. by Act 4 of 2013, s. 11, for “two thousand rupees” (w.e.f. 18-1-2013).
5. Subs. by s. 11, ibid., for “one hundred rupees” (w.e.f. 18-1-2013).
71
prevent it, shall be deemed to be guilty of such contravention and shall be punishable with a fine which
may extend to twice the amount of the deposits so received.
1
[(4) If any other provision of this Act is contravened or if any default is made in—
(i) complying with any requirement of this Act or of any order, rule or direction made or
condition imposed thereunder, or
(ii) carrying out the terms of, or the obligations under, a scheme sanctioned under
sub-section (7) of section 45,
by any person, such person shall be punishable with fine which may extend to 2
[
3
[one crore rupees] or
twice the amount involved in such contravention or default where such amount is quantifiable,
whichever is more, and where a contravention or default is a continuing one, with a further fine which
may extend to 4
[one lakh rupees]] for every day, during which the contravention or default continues.]
5
[(5) Where a contravention or default has been committed by a company, every person who, at the
time the contravention or default was committed, was in charge of, and was responsible to, the
company for the conduct of the business of the company, as well as the company, shall be deemed to be
guilty of the contravention or default and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act if he proves that the contravention or default was committed without
his knowledge or that he exercised all due diligence to prevent the contravention or default.
(6) Notwithstanding anything contained in sub-section (5), where a contravention or default has
been committed by a company, and it is proved that the same was committed with the consent or
connivance of, or is attributable to any gross negligence on the part of, any director, manager, secretary
or other officer of the company, such director manager, secretary or other officer shall also be deemed
to be guilty of that contravention or default and shall be liable to be proceeded against and punished
accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.]
6
[46A. Chairman, director, etc., to be public servants for the purposes of Chapter IX of the
Indian Penal Code.—7
[Every chairman who is appointed on a whole-time basis, managing director,
director, auditor], liquidator, manager and any other employee of a banking company shall be deemed
to be a public servant for the purposes of Chapter IX of the Indian Penal Code (45 of 1860).]
47. Cognizance of offences.—No Court shall take cognizance of any offence punishable under
8
[sub-section (5) of section 36AA or] section 46 except upon complaint in writing made by an officer
of
1. Subs. by Act 1 of 1984, s. 38, for sub-section (4) (w.e.f. 15-2-1984).
2. Subs. by Act 20 of 1994, s. 8, for certain words (w.e.f. 31-1-1994).
3. Subs. by Act 4 of 2013, s. 11, for “fifty thousand rupees” (w.e.f. 18-1-2013).
4. Subs. by s. 11, ibid., for “two thousand and five hundred rupees” (w.e.f. 18-1-2013).
5. Subs. by Act 55 of 1963, s. 25, for sub-section (4) (w.e.f. 1-2-1964).
6. Ins. by Act 95 of 1956, s. 10 (w.e.f. 14-1-1957).
7. Subs. by Act 20 of 1994, s. 9, for “Every chairman, director, auditor” (w.e.f. 31-1-1994).
8. Ins. by Act 55 of 1963, s. 26 (w.e.f. 1-2-1964).
72
1
[the Reserve Bank or, as the case may be, the National Bank] generally or specially authorized in
writing in this behalf by 2
[the Reserve Bank or, as the case may be, the National Bank], and 2
[no court
other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court
superior thereto] shall try any such offence.
3
[47A. Power of Reserve Bank to impose penalty.—(1) Notwithstanding anything contained in
section 46, if a contravention or default of the nature referred to in 4
[sub-section (2) or sub-section (3)
or sub-section (4)] of section 46, as the case may be, is made by a banking company, then, the Reserve
Bank may impose on such banking company—
5
[(a) where the contravention or default is of the nature referred to in sub-section (3) of section 46,
a penalty not exceeding twenty lakh rupees in respect of each offence if the contravention or default
persists, a further penalty not exceeding fifty thousand rupees for everyday, after the first day, during
which the contravention or deafult continues;
(b) where the contravention is of the nature referred to in sub-section (3) of section 46, a penalty not
exceeding twice the amount of the deposits in respect of which such contravention was made;
(c) where the contravention or default is of the nature referred to in sub-section (4) of section 46, a
penalty not exceeding one crore rupees or twice the amount involved in such contravention or default
where such amount is quantifiable, whichever is more, and where such contravention or default is a
continuing one, a further penalty which may extend to one lakh rupees for everyday, after the first day,
during which the contravention or default continues.]
6
[(2) For the purpose of adjudging the penalty under sub-section (1), the Reserve Bank shall serve
notice on the banking company requiring it to show cause why the amount specified in the notice
should not be imposed and a reasonable opportunity of being heard shall also be given to such banking
company.]
(4) No complaint shall be filed against any banking company in any court of law in respect of any
contravention or default in respect of which any penalty has been imposed by the Reserve Bank under
this section.
(5) Any penalty imposed by the Reserve Bank under this section shall be payable within a period of
fourteen days from the date on which notice issued by the Reserve Bank demanding payment of the
sum is served on the banking company and in the event of failure of the banking company to pay the
sum within such period, may be levied on a direction made by the principal civil court having
jurisdiction in the area where the registered office of the banking company is situated; or, in the case of
a banking company incorporated outside India, where its principal place of business in India is situated:
Provided that no such direction shall be made except on an application made to the court by the
Reserve Bank or any officer authorised by that Bank in this behalf.
(6) The court which makes a direction under sub-section (5) shall issue a certificate specifying the
sum payable by the banking company and every such certificate shall be enforceable in the same
manner as if it were a decree made by the court in a civil suit.
(7) Where any complaint has been filed against any banking company in any court in respect of the
contravention or default of the nature referred to in sub-section (3) or, as the case may be, sub- section
(4) of section 46, then, no proceedings for the imposition of any penalty on the banking company shall
be taken under this section.]
48. Application of fines.—A Court imposing any fine under this Act may direct that the whole or
any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards
the rewarding of the person on whose information the fine is recovered.
1. Subs. by Act 61 of 1981, s. 61 and Sch. II, for “the Reserve Bank” (w.e.f. 12-7-1984).
2. Subs. by Act 1 of 1984 s. 39, for certain words (w.e.f. 15-2-1984).
3. Ins. by Act 58 of 1968, s. 17 (w.e.f. 1-2-1969).
4. Subs. by Act 4 of 2013, s. 12, for “sub-section (3) or sub-section (4)” (w.e.f. 18-1-2013).
5. Subs. by s. 12, ibid., for sub-clauses (a) and (b) (w.e.f. 18-1-2013).
6. Subs. by Act 20 of 1994, s. 10, for sub-sections (2) and (3) (w.e.f. 31-1-1994).
73
49. Special provisions for private banking companies.—The exemptions, whether express or
implied, in favour of a private company in 1
[sections 90, 165, 182, 204 and 255, clauses (a) and (b) of
sub-section (1) of section 293 and sections 300, 388A and 416 of the Companies Act, 1956
(1 of 1956)], shall not operate in favour of a private company which is a banking company.
2
[49A. Restriction on acceptance of deposits withdrawable by cheque.—No person other than a
banking company, the Reserve Bank, the State Bank of India or any other 3
[banking institution, firm or
other person notified by the Central Government in this behalf on the recommendation of the Reserve
Bank] shall accept from the public deposits of money withdrawable by cheque:
Provided that nothing contained in this section shall apply to any savings bank scheme run by the
Government.
49B. Change of name by a banking company.—Notwithstanding anything contained in section
21 of the Companies Act, 1956 (1 of 1956), the Central Government shall not signify its approval to the
change of name of any banking company unless the Reserve Bank certifies in writing that it has no
objection to such change.
49C. Alteration of memorandum of a banking company.—Notwithstanding anything contained
in the Companies Act, 1956 (1 of 1956), no application for the confirmation of the alteration of the
memorandum of a banking company shall be maintainable unless the Reserve Bank certifies that there
is no objection to such alteration.]
50. 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 4
[contained in sections 10, 12A, 16, 35A, 35B, 5
[36, 43A and 45] or by reason of the
compliance by a banking company with any order or direction given to it under this Act].
6
[51. Application on of certain provisions to the State Bank of India and other notified
banks.—7
[(1)] Without prejudice to the provisions of the State Bank of India Act, 1955 (23 of 1955), or
any other enactment, the provisions of sections 10, 13 to 15, 17, 8
[19 to 21A, 23 to 28, 29 [excluding
sub-section (3)], 9
[29A] 10[sub-sections (1B), (1C) and (2) of section 30, 31], 34, 35, 35A, 11[35AA,
35AB,] 36 [excluding clause (d) of sub-section (1)], 45Y to 45ZF, 46 to 48] 50, 52 and 53 shall also
apply, so far as may be, to and in relation to the State Bank of India 12[or any corresponding new bank
or a Regional Rural Bank or any subsidiary bank] as they apply to and in relation to banking
companies:
13[Provided that—
(a) nothing contained in clause (c) of sub-section (1) of section 10 shall apply to the chairman
of the State Bank of India or to a 14[managing director] of any subsidiary bank in so far as the said
clause precludes him from being a director of, or holding an office in, any institution approved by
the Reserve Bank;
1. The words, figures and letters “sections 17, 77, 83B, 86H, 91B and 91D and sub-section (5) of section 144 of the Indian
Companies Act, 1913 (7 of 1913)” have successively been amended by Act 95 of 1956, s. 11, Act 33 of 1959, s. 34 and Act
55 of 1963, s. 27 to read as above.
2. Ins. by Act 33 of 1959, s. 35 (w.e.f. 1-10-1959).
3. Subs. by Act 55 of 1963, s. 28, for certain words (w.e.f. 1-2-1964).
4. Subs. by Act 95 of 1956, s. 12, for certain words (w.e.f. 14-1-1957).
5. Subs. by Act 37 of 1960, s. 8, for “and 36” (w.e.f. 19-9-1960).
6. Subs. by Act 79 of 1956, s. 43 and the Second Schedule, for section 51 (w.e.f. 22-10-1956).
7. Section 51 renumbered as sub-section (1) thereof by Act 1 of 1984, s. 40 (w.e.f. 15-2-1984).
8. Subs. by s. 40, ibid., for certain words (w.e.f. 15-2-1984).
9. Ins. by Act 4 of 2013, s. 13 (w.e.f. 18-1-2013).
10. Subs. by Act 66 of 1988, s. 10, for “31” (w.e.f. 30-12-1988).
11. Ins. by Act 30 of 2017, s. 3, (w.e.f. 4-5-2017).
12. Subs. by Act 1 of 1984, s. 40, for certain words (w.e.f. 15-2-1984).
13. Subs. by Act 38 of 1959, s. 64 and the Third Schedule, for the former proviso (w.e.f. 10-9-1959).
14. Subs. by Act 1 of 1984, s. 40, for “general manager” (w.e.f. 15-2-1984).
74
1
[(b) nothing contained in sub-clause (iii) of clause (b) of sub-section (1) of section 20 shall
apply to any bank referred to in sub-section (1), insofar as the said sub-clause (iii) of clause (b)
precludes that bank from entering into any commitment for granting any loan or advance to or on
behalf of a company (not being a Government company) in which not less than forty per cent. of
the paid-up capital is held (whether singly or taken together) by the Central Government or the
Reserve Bank or a corporation owned by that bank; and
(c) nothing contained in section 46 or in section 47A shall apply to,—
(i) an officer of the Central Government or the Reserve Bank, nominated or appointed as
director of the State Bank of India or any corresponding new bank or a Regional Rural Bank or
any subsidiary bank or a company; or
(ii) an officer of the State Bank of India or a corresponding new bank or a Regional Rural
Bank or a subsidiary bank nominated or appointed as director of any of the said banks (not
being the bank of which he is an officer) or of a banking company.]
2* * * * *
3
[(2) References to a banking company in any rule or direction relating to any provision of this Act
referred to in sub-section (1) shall, except where such rule or direction provides otherwise, be construed
as referring also to the State Bank of India, a corresponding new bank, a Regional Rural Bank and a
subsidiary bank.]
4
[51A. Powers of Reserve Bank not to apply to International Financial Services Centre.—
Notwithstanding anything contained in any other law for the time being in force, the powers exercisable
by the Reserve Bank under this Act,—
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of
section 18 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established
under sub-section (1) of section 4 of the International Financial Services Centres Authority Act,
2019,
in so far as regulation of financial products, financial services and financial institutions that are
permitted in the International Financial Services Centres are concerned.]
52. Power of Central Government to make rules.—(1) The Central Government may, after
consultation with the Reserve Bank, make rules to provide for all matters for which provision is
necessary or expedient for the purpose of giving effect to the provisions of this Act and all such rules
shall be published in the Official Gazette.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for the details to be included in the returns required by this Act and the manner in which such
returns shall be submitted 5
[and the form in which the official liquidator may file lists of debtors to the
Court having jurisdiction under Part III or Part IIIA and the particulars which such lists may contain
and any other matter which has to be, or may be, prescribed].
6* * * * *
7
[(4) The Central Government may by rules made under this section annul, alter or add to, all or any
of the provisions of the Fourth Schedule.]
8
[(5) Every rule made by the Central Government under this Act shall be laid, as soon as may be
after it is made, before each House of Parliament, while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if, before the expiry
of the session immediately following the session or the successive sessions aforesaid both Houses agree
1. Subs. by Act 1 of 1984, s. 40, for clauses (b) and (c) (w.e.f. 15-2-1984).
2. Explanation omitted by Act 58 of 1968, s. 18 (w.e.f. 1-2-1969).
3. Ins. by Act 1 of 1984, s. 40 (w.e.f. 15-2-1984).
7. Ins. by Act 50 of 2019, s. 33 and the Second Schedule (w.e.f. 1-10-2020).
4. Added by Act 52 of 1953, s. 11 (w.e.f. 30-12-1953).
5. Omitted by Act 1 of 1984, s. 41 (w.e.f. 15-2-1984).
6. Ins. by Act 52 of 1953, s. 11 (w.e.f. 30-12-1953).
7. Ins. by Act 1 of 1984, s. 41 (w.e.f. 15-2-1984).
75
in making any modification in the rule or both Houses agree that the rule should not be made, the rule
shall thereafter have effect only in such modified form or be of no effect, as the case may be; so,
however, that any such modification or annulment shall be without prejudice to the validity of anything
previously done under that rule.]
53. Power to exempt in certain cases.—1
[(1)] The Central Government may, on the
recommendation of the Reserve Bank, declare, by notification in the Official Gazette, that any or all of
the provisions of this Act shall not apply to any 2
[banking company or institution or to any class of
banking companies 3***] either generally or for such period as may be specified.
4
[(2) 5
[A copy of every notification proposed to be issued under sub-section (1) relating to any
banking company or institution or any class of banking companies or any branch of a banking company
or an institution, as the case may be, functioning or located in any Special Economic Zone established
under the Special Economic Zones Act, 2005 (28 of 2005) shall be laid in draft before each House of
Parliament], while it is in session, for a total period of thirty days which may be comprised in one
session or in two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue
of the notification or both Houses agree in making any modification in the notification, the notification
shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed
upon by both the Houses.]
54. Protection of action taken under Act.—(1) No suit or other legal proceeding shall be lie
against the Central Government, the Reserve Bank or any officer for anything which is in good faith
done or intended to be done in pursuance of this Act.
(2) Save as otherwise expressly provided by or under this Act, no suit or other legal proceeding
shall lie against the Central Government, the Reserve Bank or any officer for any damage caused or
likely to be caused by anything in good faith done or intended to be done in pursuance of this Act.
55. Amendment of Act 2 of 1934.—The Reserve Bank of India Act, 1934 (2 of 1934), shall be
amended in the manner specified in the fourth column of the First Schedule, and the amendments to
section 18 thereof as specified in the said Schedule shall be deemed to have had effect on and from the
20th day of September, 1947.
6
[55A. Power to remove difficulties.—If any difficulty arises in giving effect to the provisions of
this Act, the Central Government may, by order, as occasion requires, do anything (not inconsistent
with the provisions of this Act) which appears to it to be necessary for the purpose of removing the
difficulty:
Provided that no such power shall be exercised after the expiry of a period of three years from the
commencement of section 20 of the Banking Laws (Amendment) Act, 1968 (58 of 1968).]
7
[