Enacted 1949Financial Markets & BankingBrief

The Banking Regulation Act, 1949

Governs banking companies — licensing, paid-up capital, business activities, audit, inspection, amalgamation and winding up.

In one line

What this Act says

Licenses banks, sets their capital, business and audit rules, and lets the RBI inspect, supersede boards or wind them up if they fail.

Penalties

4 headline offences

Carrying on banking business without a licence
Â§46(4)
Fine up to â‚¹1 crore; continuing offence â€” additional â‚¹1 lakh per day.
False statement in returns / balance sheet
Â§46(1)
Imprisonment up to 3 years + fine.
Default in maintaining cash reserve / SLR
Â§42 (RBI Act) / Â§24
Penal interest above bank rate on the shortfall; persistent default â€” additional penalty.
Non-compliance with RBI directions
Â§47A
Fine up to â‚¹1 crore; continuing â€” â‚¹1 lakh per day.

Headline offences only — not exhaustive. For the full text and every section, open the source PDF or the official link below.

Key Sections & Penalties

Showing 5 of 8

Section	Type	Provision	Applicability	Details / Penalty
§21	structural	Power of Reserve Bank to control advances	-	Administrative / Structural
§22	structural	Licensing of banking companies	-	Administrative / Structural
§35	structural	Inspection	-	Administrative / Structural
§35A	structural	Power of the Reserve Bank to give directions	-	Administrative / Structural
§46(4)	civil	Carrying on banking business without a licence	-	Fine up to ₹1 crore; continuing offence — additional ₹1 lakh per day medium RISK

Maximum punishments as prescribed by the Act. Actual sentencing depends on facts, prior convictions and judicial discretion.

Sources

We always show you the local source PDF and at least one verifiable online reference, so you can check anything we say.

Source PDF

Banking Regulation Act, 1949.pdf

Full text · opens in new tab

Reference

Wikipedia

en.wikipedia.org · opens in new tab

About this Act