33. Staff of Corporation.—(1) The Corporation may appoint such number of officers and employees
as it considers necessary or desirable for the efficient performance of its functions and determine the
terms and conditions of their appointment and service.
(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the Corporation to
utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such
terms and conditions as may be agreed upon between the Corporation and the Reserve Bank.
34. Returns from insured banks.—(1) Notwithstanding anything contained in 1
[the Banking
Regulation Act, 1949 (10 of 1949)] or any other law for the time being in force the Corporation may at
any time direct an insured bank 2
[or a credit institution] to furnish to it, within such time as may be
specified by the Corporation, such statements and information relating to the deposits in that bank 2
[or the
credit facilities granted by that credit institution, as the case may be,] as the Corporation may consider
necessary or expedient to obtain for the purposes of this Act.
(2) The Corporation may, if it considers it expedient and after consulting the Reserve Bank, publish
any information obtained by it under this section in such consolidated form as it may think fit.
35. Corporation to have access to records.—(1) The Corporation shall have free access to all such
records of an insured bank 2
[or a credit institution] perusal where of may appear to the Corporation to the
necessary for the discharge of its functions under this Act.
(2) The Corporation may require any insured bank 2
[or credit institution] to furnish to it copies of any
of the records referred to in sub-section (1) and the bank 2
[or the credit institution] shall be bound to
comply with the requisition.
36. Inspection of insured banks by Reserve Bank.—(1) The Corporation may for any of the
purposes of this Act request the Reserve Bank to cause an inspection of the books and accounts or an
investigation of the affairs of an insured bank 2
[or a credit institution] to be made and on such request the
Reserve Bank shall cause such inspection or investigation to be made by one or more of its officers 3
[or
through such other person or agency as the Reserve Bank may determine.]
(2) The provisions of sub-section (2) and sub-section (3) of section 35 of 4
[the Banking Regulation
Act, 1949 (10 of 1949)] shall apply to an inspection or investigation under sub-section (1) as they apply to
an inspection under that section.
(3) When an inspection or investigation has been made under this section, the Reserve Bank shall
furnish a copy of its report to the Corporation and 5
[neither the bank nor the credit institution, as the case
may be, inspected or investigated, nor any other bank or credit institution] shall be entitled to be furnished
with a copy of such report.
(4) Notwithstanding anything contained in any law for the time being in force, no court, Tribunal or
other authority shall compel the production or disclosure of a report under this section or of information
or material gathered during the course of an inspection or investigation under this section.
37. Corporation to furnish information to Reserve Bank.—The Corporation shall, one a request in
writing from the Reserve Bank, furnish to it within such time as may be specified by the Reserve Bank,
such statement and information relating to the business or affairs of the Corporation or of an insured bank
as the Reserve Bank may consider necessary or expedient.
1. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Ins. by Act 56 of 1968, s. 12 (w.e.f. 1-7-1971).
4. Subs. by s. 2, ibid., for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).
5. Subs. by Act 21 of 1978, s. 8, for certain words (w.e.f. 15-7-1978).
21
38. Reserve Bank to furnish information to Corporation.—The Reserve Bank shall, on a request
in writing from the Corporation, furnish to it any report or information relating to an insured bank
1
[or a
credit institution] made or obtained by it under or in pursuance of the Reserve Bank of India Act, 1934 or
2
[the Banking Regulation Act, 1949 (10 of 1949).]
39. Declaration of fidelity and secrecy.—3
[(1)] Every director, auditor, officer or other employee of
the Corporation or an employee of the Reserve Bank whose services are utilised by the Corporation under
sub-section (2) of section 33 shall, before entering upon his duties, make a declaration of fidelity and
secrecy in the form set out in the First Schedule to this Act.
1
[(2) The Corporation shall observe, except as otherwise required by law, the practices and usages
customary among the bankers, and, in particular, it shall not divulge any information relating to an
insured bank or its customers or a credit institution or its customers except in circumstances in which it is,
in accordance with law or practices or usages customary among bankers, necessary or appropriate for the
Corporation to divulge such information.]
4
[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit
Information Companies (Regulation) Act, 2005.]
40. Indemnity of directors.—(1) Every director of the Board shall be indemnified by the
Corporation against all losses and expenses incurred by him in, or in relation to, the discharge of his
duties except such as are caused by his own willful act or default.
(2) A director of the Board shall not be responsible for any other director or for any other officer or
other employee of the Corporation, or for any loss or expenses resulting to the Corporation from the
insufficiency or deficiency of value of or title to any property or security acquired or taken on behalf of
the Corporation or the insolvency or wrongful act of any debtor or any person under obligation to the
Corporation or anything done in good faith in the execution of the duties of his office or in relation
thereto.
41. Defects in appointments not to invalidate acts, etc.—(1) No act or proceeding of the Board or
of any committee of the Corporation shall be questioned on the ground merely of the existence of any
vacancy or defect in the constitution of the Board or committee.
(2) No act done by any person acting in good faith as a director of the Board shall be deemed to be
invalid merely on the ground that he was disqualified to be a director or that there was any other defect in
his appointment.
42. Protection of action taken under this act.—No suit other legal proceeding shall lie against the
Corporation or the Reserve Bank or any director of the Board or any officer of the Corporation or the
Reserve Bank or 5
[or any other person or agency authorised by the Corporation or the Reserve Bank] to
discharge any functions under this Act 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 this Act.
43. Companies Act, 1956 and Insurance Act, 1938 not to apply.—Nothing in the Companies Act,
1956 (1 of 1956) or the Insurance Act, 1938 (4 of 1938), shall apply to the Corporation.
6
[43A. 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 of the Special Economic Zones Act, 2005 (28 of 2005);
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).
3. Section 39 re-numbered as sub-section (1) thereof by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
4. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).
5. Subs. by 56 of 1968, s. 13, for “or any other person authorised by the Corporation” (w.e.f. 1-7-1971).
6. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020).
22
(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.]
44. Liquidation of Corporation.—(1) The Corporation shall not be placed in liquidation save by
order of the Central Government and in such manner as that Government may direct.
(2) On the liquidation of the Corporation—
(a) the outstanding assets of the Corporation in so far as they relate to the Deposit Insurance Fund
shall be distributed among the insured banks in such manner and in such proportion as may be
determined by the Central Government having regard to the amounts of premium paid by them during
any prescribed period or the deposits of the said banks as on the date of liquidation of the Corporation
or other relevant circumstances;
(b) the remaining outstanding assets of the Corporation shall be transferred to the Reserve Bank.
45. Power of Central Government to give directions.—In the discharge of its functions under this
Act, the Corporation shall be guided by such directions in matters of policy involving public interest as
the Central Government may after consulting the Reserve Bank give to it in writing, and if any question
arises whether the directions relates to a matter of policy involving public interest, the decision of the
Central Government thereon shall be final.
46. Dispute as to amount of premium.—Any dispute as to the amount of premium due from any
insured bank shall be decided by the Central Government and the decision of that Government shall final.
47. Penalties.—(1) Whoever in any return, balance-sheet or other document or in any information
required or furnished by or under or for the purposes of any provision of this Act, willfully makes a
statement which is false in any material particular, knowing it to be false, or willfully omits to make a
material statement, shall be punishable with imprisonment for a term which may extend to three years and
shall also be liable to fine.
1
[(2) If any person fails to produce any book, account or other document or to furnish any statement
or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be
liable to penalty which may extend to one lakh fifty thousand rupees in respect of each failure, and in the
case of a continuing failure, with an additional penalty which may extend to seven thousand five hundred
rupees for every day during which the failure continues after the first such failure.
(3) For the purpose of adjudging the penalty under sub-section (2), the Corporation shall serve notice
on the person 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 person.
(4) Any penalty imposed by the Corporation under this section shall be payable within a period of
fourteen days from the date on which notice issued by the Corporation demanding payment of the sum is
served on the person and in the event of failure of the person to pay the sum within such period, may be
levied on an order or direction made by the principal civil court having jurisdiction in the area where the
person is situated:
Provided that no order or direction shall be made except on an application made to the court by the
Corporation or any officer authorised by it in this behalf.
(5) The court which makes an order or direction under sub-section (4) shall issue a certificate
specifying the sum payable by the person 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.
(6) No complaint shall be filed against any person in any court of law in respect of any contravention
or default in respect of which any penalty has been imposed by the Corporation under sub-section (2).
1. Subs. by Act 18 of 2023, s. 2 and Schedule for sub-section (2) (w.e.f. 22-01-2024).
23
(7) Where any complaint has been filed against any person in any court in respect of any
contravention or default of the nature referred to in sub-section (1), then, no proceedings for the
imposition of any penalty on the person shall be initiated under sub-section (2).]
48. Offences by companies.—(1) Where an offence has been committed by a company, every person
who at the time the offence 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
offence 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 offence was committed without his knowledge or
that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been
committed by a company and it is proved that the offence has been 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 offence 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 1
[a co-operative society or] a firm or other
association of individuals; and
(b) “director” in relation to a firm, means a partner in the firm 1
[and in relation to a co-operative
society includes any member of a committee of management or other managing body (by whatever
name called) to which the management of the affairs of the bank is entrusted].
2
[49. Cognizance and trial of offences.—(1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), no Court shall take cognizance of any offence punishable under
this Act except upon a complaint, in writing, made by an officer of the Corporation, generally or specially
authorised in writing in this behalf by the Board, and no court, inferior to the Court of a Metropolitan
Magistrate or a Judicial Magistrate of the first class, shall try any such offence.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), a
Magistrate may, if he sees reason so to do, dispense with the personal attendance of the officer of the
Corporation filing the complaint, but the Magistrate may, in his discretion, at any stage of the proceeding,
direct the personal attendance of the complainant.]
50. Regulation.—(1) The Board may, with the previous approval of the Reserve Bank, 3
[by
notification in the Official Gazette,] make regulations not inconsistent with this Act to provide for all
matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of
this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such regulations may
provide for—
(a) the times and places of the meetings of the Board or of any committee constituted under this
Act and the procedure to be followed at such meetings including the quorum necessary for the
transaction of business;
(b) the number of directors constituting an Executive Committee, and the functions that such
committee shall discharge;
(c) the functions which any other committee may discharge under this Act;
(d) the fees and allowances that may be paid to the members of a committee other than directors
of the Board;
1. Ins. by Act 56 of 1968, s. 14 (w.e.f. 1-7-1971).
2. Subs. by Act 21 of 1978, s. 8, for section 49 (w.e.f. 15-7-1978).
3. Ins. by Act 66 of 1988, s. 26 (w.e.f. 30-12-1988).
24
(e) the fees and allowances that may be paid to the directors of the Board;
(f) the periods for which, the times at which and the manner in which premium may be paid by an
insured bank;
(g) the interest which may be charged from an insured bank where it makes default in payment of
premium;
(h) the manner in which and the time within which the amounts referred to in section 21 may be
paid;
(i) the form and the manner in which the balance-sheet and the accounts of the Corporation shall
be prepared or maintained; and
(j) any other matter which is to be, or may be prescribed.
(3) Any regulation which may be made by the Board under this Act may be made by the Reserve
Bank within three months of the establishment of the Corporation; and any regulation so made may be
altered or rescinded by the Board in the exercise of its powers under this Act.
1
[(4) Every regulation shall, as soon as may be after it is made under this Act by the Board, be
forwarded to the Central Government and that Government shall cause a copy of the same to be laid
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 making any
modification in the regulation, or both Houses agree that the regulation should not be made, the regulation
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 regulation.]
51. [Amendment of Certain Enactments.]—Rep. by the Repealing and Amending Act, 1964
(52 of 1964), s. 2 and First Schedule (w.e.f. 15-7-1978).