Sections Particulars
Chapter I Preliminary
1 Short title, extent and commencement
(1) This Act may be called the Reserve Bank of India Act, 1934. (2) It extends to the whole of India. (3) This section shall come into force at once, and the r...
2 Definitions
In this Act, unless there is anything repugnant in the subject or context,- (a) 1[***] (ai) 1[***] (aii) "the Bank" means the Reserve Bank of India constitute...
Chapter II Incorporation, Capital, Management And Business
3 Establishment and incorporation of Reserve Bank
(1) A bank to be called the Reserve Bank of India shall be constituted for the purposes of taking over the management of the currency from the Central Governm...
4 Capital of the Bank
The capital of the bank shall be five crores of rupees. ...
5 [Repealed by Act No. 62 of 1948, w.e.f. 1st. January, 1949]
6 Offices, branches and agencies
The Bank shall as soon as may be, establish offices in Bombay, Calcutta, Delhi and Madras and may establish branches or agencies in any other place in India o...
7 Management
(1) The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necess...
8 Composition of the Central Board, and term of office of directors
(1) The Central Board shall consist of the following Directors, namely:- (a) a Governor and not more than four Deputy Governors to be appointed by the Central...
9 Local Boards, their constitution and functions
(1) A Local Board shall be constituted for each of the four areas specified in Schedule I and shall consist of five members to be appointed by the Central Gov...
10 Disqualifications of directors and members of Local Boards
(1) No person may be a Director or a member of a Local Board who- (a) is a salaried Government official; or (b) is, or at any time has been, adjudicated an in...
11 Removal from and vacation of office
(1) The Central Government may remove from office the Governor, or a Deputy Governor or any other Director or any member of a Local Board. (2) A Director nomin...
12 Casual vacancies and absences
(1) If the Governor or a Deputy Governor by infirmity or otherwise is rendered incapable of executing his duties or is absent on leave or otherwise in circums...
13 Meetings of the Central Board
(1) Meetings of the Central Board shall be convened by the Governor at least six times in each year and at least once in each quarter. (2) Any four Directors m...
14 General meetings [Repealed]
15 First constitution of the Central Board [Repealed]
16 First constitution of Local Boards [Repealed]
17 Business which the Bank may transact
The Bank shall be authorized to carry on and transact the several kinds of business hereinafter specified, namely:- (1) the accepting of money on deposit witho...
18 Power of direct discount
When, in the opinion of the Bank, a special occasion has arisen making it necessary or expedient that action should be taken under this section for the purpos...
18A Validity of loan or advance not to be questioned
Notwithstanding anything to the contrary contained in any other law for the time being in force- (a) the validity of any loan or advance granted by the Bank in...
19 Business which the bank may not transact
Save as otherwise provided in sections 17,18, 42 and 45, the bank may not- (1) engage in trade or otherwise have a direct interest in any commercial, industri...
Chapter III Central Banking Functions
20 Obligation of the Bank to transact government business
The Bank shall undertake to accept monies for account of the Central Government and to make payments up to the amount standing to the credit of its account, a...
21 Bank to have the right to transact government business in India
(1) The Central Government shall entrust the Bank, on such conditions as may be agreed upon, with all its money, remittance, exchange and banking transactions...
21A Bank to transact government business of States on agreement
(1) The Bank may by agreement with the government of any state undertake- (a) all its money, remittance, exchange and banking transactions in India, including...
21B Effect of agreements made between the Bank and certain States before the 1st November, 1956
(1) Any agreement made under section 21 or section 21A between the Bank and the government of a State specified in the Explanation below and in force imm...
22 Right to issue bank notes
(1) The bank shall have the sole right to issue bank notes in India, and may, for a period which shall be fixed by the Central Government on the recommendatio...
23 Issue department
(1) The issue of bank notes shall be conducted by the Bank in an issue department which shall be separated and kept wholly distinct from the banking departmen...
24 Denominations of notes
(1) Subject to the provisions of sub-section (2), bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fift...
25 Form of bank notes
The design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the ...
26 Legal tender character of notes
(1) Subject to the provisions of sub-section (2), every bank note shall be legal tender at any place in India in payment or on account for the amount expresse...
26A Certain bank notes to cease to be legal tender
Notwithstanding anything contained in section 26, no bank note of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees ...
27 Re-issue of notes
The Bank shall not re-issue bank notes which are torn, defaced or excessively spoiled. ...
28 Recovery of notes lost, stolen, mutilated or imperfect
Notwithstanding anything contained in any enactment or rule of law to the contrary, no person shall of right be entitled to recover from the Central Governmen...
28A Issue of special bank notes and special one rupee notes in certain cases
(1) For the purpose of controlling the circulation of bank notes without India, the Bank may, notwithstanding anything contained in any other provision of thi...
29 Bank exempt from stamp duty on bank notes
The Bank shall not be liable to the payment of any stamp duty under the Indian Stamp Act, 1899 (2 of 1899), in respect of bank notes issued by it. ...
30 Powers of Central Government to supersede Central Board
(1) If in the opinion of the Central Government the Bank fails to carry out any of the obligations imposed on it by or under this Act the Central Government m...
31 Issue of demand bills and notes
(1) No person in India other than the Bank, or, as expressly authorized by this Act the Central Government shall draw, accept, make or issue any bill of excha...
32 [Repealed by the Reserve Bank of India (Amendment) Act, 1974]
33 Assets of the issue department
(1) The assets of the issue department shall consist of gold coin, gold bullion, foreign securities, rupee coin and rupee securities to such aggregate amount ...
34 Liabilities of the issue department
(1) The liabilities of the issue department shall be an amount equal to the total of the amount of the currency notes of the Government of India and bank note...
35 [Repealed by Act No. 62 of 1948, w.e.f. 1st. January, 1949]
36 [Repealed by Act No. 55 of 1963, w.e.f. 1st. February, 1964]
37 Suspension of assets requirements as to foreign securities
Notwithstanding anything contained in the foregoing provisions, the Bank may, with the previous sanction of the Central Government, for periods not exceeding ...
38 Obligations of government and the Bank in respect of rupee coin
The Central Government shall undertake not to put into circulation any rupees, except through the Bank, and Bank shall undertake not to dispose of rupee coin ...
39 Obligation to supply different forms of currency
(1) The Bank shall issue rupee coin on demand in exchange for bank notes and currency notes of the Government of India, and shall issue currency notes or bank...
40 Transactions in foreign exchange
The Bank shall sell to or buy from any authorized person who makes a demand in that behalf at its office in Bombay, Calcutta, Delhi or Madras or at such of i...
41A Obligation to provide remittance between India and Burma : repealed by Act No. 11 of 1947, w.e.f. 1st. April, 1947
repealed by Act No. 11 of 1947, w.e.f. 1st. April, 1947] ...
42 Cash reserves of scheduled banks to be kept with the Bank
(1) Every bank included in Scheduled II shall maintain with the Bank an average daily balance the amount of which shall not be less than three per cent of the...
43 Publication of consolidated statement by the bank
The Bank shall cause to be published each 23[fortnight] a consolidated statement showing the aggregate liabilities and assets of all the scheduled banks toget...
43A Protection of action taken in good faith
(1) No suit or other legal proceeding shall lie against the bank or any of its officers for anything which is in good faith done or intended to be done in pur...
44 Power to require returns from co-operative banks :[repealed by the Banking Laws (Application to Co-operative Societies) Act, 1965, w.e.f. 1st. March 1966]
45 Appointment of agents
(1) Unless otherwise directed by the Central Government with reference to any place, the bank may, having regard to public interest, convenience of banking, ...
Chapter III A Collection And Furnishing Of Credit Information
45A Definitions
In this chapter, unless the context otherwise requires,- (a) "banking company" means a banking company as defined in section 5 of the Banking Regulation Act, 1...
45B Power of bank to collect credit information
The bank may- (a) collect, in such manner as it may think fit, credit information from banking companies; and (b) furnish such information to any banking compa...
45C Power to call for returns containing credit information
(1) For the purpose of enabling the bank to discharge its functions under this chapter, it may at any time direct any banking company to submit to it such sta...
45D Procedure for furnishing credit information to banking companies
(1) A banking company may, in connection with any financial arrangement entered into or proposed to be entered into by it, with any person, make an applicatio...
45E Disclosure of information prohibited
(1) Any credit information contained in any statement submitted by a banking company under section 45C or furnished by the bank to any banking company under s...
45F 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 provision...
45G Penalties: [repealed by the Reserve Bank of India (Amendment) Act, 1974]
Chapter III B Provisions Relating To Non-Banking Institutions Receiving Deposits And Financial Institutions
45H Chapter III-B not to apply in certain cases
The provisions of this chapter shall not apply to the State Bank or banking company as defined in section 5 of the Banking Regulation Act, 1949 (10 of 1949) o...
45-I Definitions
In this chapter, unless the context otherwise requires- 25[(a) "business of a non-banking financial institution" means carrying on of the business of a financi...
45-IA Requirement of registration and net owned fund
(1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no non-banking financial company shall commence or ca...
45-IB Maintenance of percentage of assets
(1) Every non-banking financial company shall invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the...
45-IC Reserve fund
(1) Every non-banking financial company shall create a reserve fund and transfer therein a sum not less than twenty per cent of its net profit every year a...
45J Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of money
The bank may, if it considers necessary in the public interest so to do, by general or special order- (a) regulate or prohibit the issue by any non-banking in...
45JA Power of bank to determine policy and issue directions
(1) If the bank is satisfied that, in the public interest or to regulate the financial system of the country to its advantage or to prevent the affairs of an...
45K Power of bank to collect information from non-banking institutions as to deposits and to give directions
(1) The bank may at any time direct that every non-banking institution shall furnish to the bank, in such form, at such intervals and within such time, such s...
45L Power of bank to call for information from financial institutions and to give directions
(1) If the bank is satisfied for the purpose of enabling it to regulate the credit system of the country to its advantage it is necessary so to do, it may- (a...
45M Duty of non-banking institutions to furnish statements, etc., required by bank
It shall be the duty of every non-banking institution to furnish the statements, information or particulars called for, and to comply with any direction given...
45MA Powers and duties of auditors
(1) It shall be the duty of an auditor of a non-banking institution to inquire whether or not the non-banking institution has furnished to the bank such state...
45MB Power of bank to prohibit acceptance of deposit and alienation of assets
(1) If any non-banking financial company violates the provisions of any section or fails to comply with any direction or order given by the bank under any of...
45MC Power of bank to file winding up petition
(1) The bank, on being satisfied that a non-banking financial company- (a) is unable to pay its debt; or (b) has by virtue of the provisions of section 45-IA ...
45N Inspection
(1) The bank may, at any time, cause an inspection to be made by one or more of its officers or employees or other persons (hereinafter in this section referr...
45NA Deposits not to be solicited by unauthorized persons
No person shall solicit on behalf of any non-banking institution either by publishing or causing to be published any prospectus or advertisement or in any oth...
45NB Disclosure of information
(1) Any information relating to a non-banking financial company- (i) contained in any statement or return submitted by such company under the provisions of t...
45NC Power of bank to exempt
The bank, on being satisfied that it is necessary so to do, may declare by notification in the Official Gazette that any or all of the provisions of this Chap...
45-O Penalties: [repealed by the Reserve Bank of India (Amendment) Act, 1974]
45P Cognizance of offences: [repealed by the Reserve Bank of India (Amendment) Act, 19 74]
45Q Chapter III B to override other laws
The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any...
45QA Power of Company Law Board to order repayment of deposit
(1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and conditions of such deposit. (...
45QB Nomination by depositors
(1) Where a deposit is held by a non-banking financial institution to the credit of one or more persons, the depositor or, as the case may be, all the deposit...
Chapter IIIC Prohibition Of Acceptance Of Deposits By Unincorporated Bodies
45R Interpretation
The words and expressions used in this Chapter and defined in Chapter IIIB shall have the meanings respectively assigned to them therein. ...
45S Deposits not to be accepted in certain cases
(1) No person, being an individual or a firm or an unincorporated association of individuals shall, accept any deposit- (i) if his or its business wholly or p...
45T Power to issue search warrants
(1) Any court having jurisdiction to issue a search warrant under the Code of Criminal Procedure, 1973 (2 of 1974) may, on an application by an officer of the...
Chapter IV General Provisions
46 Contribution by Central Government to the reserve fund
The Central Government shall transfer to the bank rupee securities of the value of five crores of rupees to be allocated by the bank to the reserve fund. ...
46A Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilization) 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 Operati...
46B [Repealed]
46C 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 ...
46D 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...
47 Allocation of surplus profits
After making provisions for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and for all other matters for whic...
48 Exemption of bank from income-tax and super-tax
(1) Notwithstanding anything contained in the Income Tax Act, 1961 (43 of 1961), or any other enactment for the time being in force relating to income-tax or ...
49 Publication of bank rate
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 eligi...
50 Auditors
(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 no...
51 Appointment of special auditors by government
Without prejudice to anything contained in section 50, the Central Government may at any time appoint the Comptroller and Auditor-General to examine and repor...
52 Powers and duties of auditors
(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 vouc...
53 Returns
(1) The bank shall prepare and transmit to the Central Government a weekly accounts of the Issue Department and of the Banking Department in such form as the ...
54 Rural credit and development
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 assistan...
54A Delegation of powers
(1) The Governor may, by general or special order, delegate to a Deputy Governor, subject to such conditions and limitations, if any, as may be specified in t...
54AA Power of bank to depute its employees to other institutions
(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 per...
55 Reports by the bank: repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949
repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949] ...
56 Power to require declaration as to ownership of registered shares : repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949
repealed by Act No. 62 of l948, w.e.f. 1st. January, 1949] ...
57 Liquidation of the Bank
(1) Nothing in the 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 Central Govern...
58 Power of the Central Board to make regulations
(1) The Central Board may, with the previous sanction of the Central Government, 33[by notification in the Official Gazette make regulations consistent with t...
58A Protection of action taken in good faith
(1) No suit, prosecution or other legal proceeding shall lie against the Central Government or the bank or any other person in respect of anything which is in...
Chapter V Penalties
58B Penalties
(1) Whoever in any application, declaration, return, statement, information or particulars made, required or furnished by or under or for the purposes of any ...
58C Offences by companies
(1) Where a person committing a contravention or default referred to in section 58B is a company, every person who, at the time the contravention or default w...
58D Application of section 58B barred
Nothing contained in section 58B shall apply to, or in respect of, any matter dealt with in section 42. ...
58E Cognizance of offences
(1) No court shall take cognizance of any offence punishable under this Act except upon a complaint in writing made by an officer of the Bank, generally or sp...
58F Application of fine
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 proceeding...
58G Power of bank to impose fine
(1) Notwithstanding anything contained in section 58B, if the contravention or default of the nature referred to in section 58B is committed by a non-banking...
59-61 [Repealed by Act No. 20 of 1937]
Schedule
Schedule I Scheduled Area
[Section 9] 27[1. The Western Area shall consist of the States of Goa, Gujarat, Madhya Pradesh and Maharashtra and the Union Territories of Dadra and Nagar Ha...
Schedule II Scheduled Banks
[Sections 2(e) and 42] Abhyudaya Co-operative Bank Ltd., Bombay (18/8/1988 w.e.f. 19/1/1988) ABN Amro Bank N.V. (11/10/1991) Adhiyaman Grama Bank, Dharmapuri (...
Schedule III [Repealed by Act No. 23 of 1955, w.e.f. 1/7/1955]
Schedule IV [Repealed by Act No. 62 of 1948, w.e.f. 1/1/1949]
Schedule V [Repealed by the M.O. 1937]
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