Section 34 of the Banking Regulation Act, 1949: Accounting Provisions Not Retrospective
Section 34 is a transitional provision. It protects accounting years that had already expired before the Banking Regulation Act, 1949 came into force from being reopened merely because the new Act introduced different requirements for the preparation, audit or submission of banking company accounts.
Text of Section 34
34. Accounting provisions of this Act not retrospective.
Nothing in this Act shall apply to the preparation of accounts by a banking company and the audit and submission thereof in respect of any accounting year which has expired prior to the commencement of this Act, and notwithstanding the other provisions of this Act, such accounts shall be prepared, audited and submitted in accordance with the law in force immediately before the commencement of this Act.
Meaning and effect of Section 34
Section 34 prevents the accounting provisions of the Banking Regulation Act, 1949 from operating retrospectively on an accounting year that had already ended before the Act commenced. The Banking Regulation Act came into force on 16 March 1949. Therefore, where the relevant accounting year had expired before that date, the preparation, audit and submission of those accounts were to be governed by the law that was in force immediately before commencement of the Act.
The words "notwithstanding the other provisions of this Act" give this transitional rule overriding effect within the Act for the limited subject covered by Section 34. The section does not generally exempt a banking company from the Banking Regulation Act. Its operation is confined to accounts for an accounting year that had already expired before commencement.
What is a "banking company"?
For the purpose of the Banking Regulation Act, the expression "banking company" is defined in Section 5(c). Broadly, it refers to a company which transacts the business of banking in India. Section 34 uses that defined expression when identifying the entities whose pre-commencement accounting years receive transitional protection.
Key points under Section 34
- The provision applies only to an accounting year that expired before commencement of the Banking Regulation Act, 1949.
- The Act commenced on 16 March 1949.
- For such an earlier accounting year, preparation of accounts is governed by the previously applicable law.
- The same rule applies to the audit and submission of those accounts.
- Section 34 is a saving and transitional provision; it does not create a continuing exemption for later accounting years.
Practical significance: Section 34 avoids retrospectively imposing new statutory accounting requirements on a period that had already closed before the Act began. It preserves the legal regime applicable to those completed accounts.
Official legal sources
For the authoritative statutory text and current consolidated version of the Banking Regulation Act, 1949, refer to official Government and Reserve Bank of India resources.
This page is an explanatory legal article intended to be read with the official text of the Banking Regulation Act, 1949 and subsequent amendments.