Corporate, Banking and Tax
The Reserve Bank of India Act, 1934
Act 2 of 1934 · 140 sections
Practise questions on Banking & Financial Laws
Title, date and preamble
[6th March, 1934.]
An Act to constitute a Reserve Bank of India.
WHEREAS it is expedient to constitute a Reserve Bank for India to regulate the issue of Bank notes
and the keeping of reserves with a view to securing monetary stability in [India] and generally to operate
the currency and credit system of the country to its advantage;
[AND WHEREAS it is essential to have a modern monetary policy framework to meet the challenge of
an increasingly complex economy;
AND WHEREAS the primary objective of the monetary policy is to maintain price stability while
keeping in mind the objective of growth;
AND WHEREAS the monetary policy framework in India shall be operated by the Reserve Bank of
India;]
It is hereby enacted as follows:—
Contents
CHAPTER I PRELIMINARY
CHAPTER II INCORPORATION, CAPITAL, MANAGEMENT AND BUSINESS
- 3.Establishment and incorporation of Reserve Bank
- 4.Capital of the Bank
- 5.Increase and reduction of share capital
- 6.Offices, branches and agencies
- 7.Management
- 8.Composition of the Central Board, and term of office of Directors
- 9.Local Boards, their constitution and functions
- 10.Disqualifications of Directors and members of Local Boards
- 11.Removal from and vacation of office
- 12.Casual vacancies and absences
- 13.Meetings of the Central Board
- 14.General meetings
- 15.First constitution of the Central Board
- 16.First constitution of local board
- 17.Business which the Bank may transact
- 18.Power of direct discount
- 18A.Validity of loan or advance not to be questioned
- 19.Business which the Bank may not transact
CHAPTER III CENTRAL BANKING FUNCTIONS
- 20.Obligation of the Bank to transact Government business
- 20A.Transaction of business for British Military Administration, Burma
- 21.Bank to have the right to transact Government business in India
- 21A.Bank to transact Government business of States on agreement
- 21B.Effect of agreements made between the Bank and certain States before the 1st November, 1956
- 22.Right to issue bank notes
- 22A.Non-applicability of certain provisions to digital form of bank notes
- 23.Issue Department
- 24.Denominations of notes
- 25.Form of bank notes
- 26.Legal tender character of notes
- 26A.Certain bank notes to cease to be legal tender
- 27.Re-issue of notes
- 28.Recovery of notes lost, stolen, mutilated or imperfect
- 28A.Issue of special bank notes and special one rupee notes in certain cases
- 29.Bank exempt from stamp duty on bank notes
- 30.Powers of Central Government to supersede Central Board
- 31.Issue of demand bills and notes
- 32.Penalty
- 33.Assets of the Issue Department
- 34.Liabilities of Issue Department
- 35.Initial assets and liabilities
- 36.Method of dealing with fluctuations in rupee coin assets
- 37.Suspension of assets requirements as to foreign securities
- 38.Obligations of Government and the Bank in respect of rupee coin
- 39.Obligation to supply different forms of currency
- 40.Transactions in foreign exchange
- 41A.Obligation to provide remittance between India and Burma
- 42.Cash reserves of scheduled banks to be kept with the Bank
- 43.Publication of consolidated statement by the Bank
- 43A.Protection of action taken in good faith
- 44.Power to require returns from co-operative banks
- 45.Appointment of agents
CHAPTER IIIA COLLECTION AND FURNISHING OF CREDIT INFORMATION
CHAPTER III B PROVISIONS RELATING TO NON-BANKING INSTITUTIONS RECEIVING DEPOSITS AND FINANCIAL INSTITUTIONS
- 45H.Chapter IIIB not to apply in certain cases
- 45I.Definitions
- 45IA.Requirement of registration and net owned fund
- 45IB.Maintenance of percentage of assets
- 45IC.Reserve fund
- 45ID.Power of Bank to remove directors from office
- 45IE.Supersession of Board of directors of non-banking financial company (other than Government Company)
- 45J.Bank to regulate or prohibit issue of prospectus or advertisement soliciting deposits of money
- 45JA.Power of Bank to determine policy and issue directions
- 45K.Power of Bank to collect information from non-banking institutions as to deposits and to give directions
- 45L.Power of Bank to call for information from financial institutions and to give directions
- 45M.Duty of non-banking institutions to furnish statements, etc., required by Bank
- 45MA.Powers and duties of auditors
- 45MAA.Power to take action against auditors
- 45MB.Power of Bank to prohibit acceptance of deposit and alienation of assets
- 45MBA.Resolution of non-banking financial company
- 45MC.Power of Bank to file winding up petition
- 45N.Inspection
- 45NA.Deposits not to be solicited by unauthorised person
- 45NAA.Power in respect of group companies
- 45NB.Disclosure of information
- 45NC.Power of Bank to exempt
- 45O.Penalties
- 45P.Cognizance of offence
- 45Q.Chapter IIIB to override other laws
- 45QA.Power of Company Law Board to order repayment of deposit
- 45QB.Nomination by depositors
CHAPTER IIIC PROHIBITION OF ACCEPTANCE OF DEPOSITS BY UNINCORPORATED BODIES
CHAPTER IIID REGULATION OF TRANSACTIONS IN DERIVATIVES, MONEY MARKET INSTRUMENTS SECURITIES, ETC
CHAPTER IIIE JOINT MECHANISM
CHAPTER IIIF MONETARY POLICY
- 45Z.Provisions of this Chapter to override other provisions of Act
- 45ZA.Inflation target
- 45ZB.Constitution of Monetary Policy Committee
- 45ZC.Eligibility and selection of Members appointed by Central Government
- 45ZD.Terms and conditions of appointment of Members of Monetary Policy Committee
- 45ZE.Removal of Members of Monetary Policy Committee
- 45ZF.Vacancies, etc., not to invalidate proceedings of Monetary Policy Committee
- 45ZG.Secretary to Monetary Policy Committee
- 45ZH.Information for Monetary Policy Committee Members
- 45ZI.Meetings of Monetary Policy Committee
- 45ZJ.Steps to be taken to implement decision of Monetary Policy Committee
- 45ZK.Publication of decisions
- 45ZL.Publication of proceedings of meeting of Monetary Policy Committee
- 45ZM.Monetary Policy Report
- 45ZN.Failure to maintain inflation target
- 45ZO.Power to make rules
CHAPTER IV GENERAL PROVISIONS
- 46.Contribution by Central Government to the Reserve Fund
- 46A.Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund
- 46C.National Industrial Credit (Long Term Operations) Fund
- 46D.National Housing Credit (Long Term Operations) Fund
- 47.Allocation of surplus profits
- 48.Exemption of Banks from income-tax and super-tax
- 49.Publication of Bank rate
- 50.Auditors
- 51.Appointment of special auditors by Government
- 52.Powers and duties of auditors
- 53.Returns
- 54.Rural Credit and Development
- 54A.Delegation of powers
- 54AA.Power of Bank to depute its employees to other institutions
- 55.Reports by the Bank
- 56.Power to require declaration as to ownership of registered shares
- 57.Liquidation of the Bank
- 57A.Powers of Bank not to apply to International Financial Services Centre
- 58.Power of the Central Board to make regulations
- 58A.Protection of action taken in good faith
Schedules and appendices
Schedules are not yet reproduced here. Read them in the official file; each link opens the page where the Schedule begins.