Section 36A of the Banking Regulation Act, 1949
Certain provisions of the Act not to apply to certain banking companies. Section 36A deals with banking companies whose licence has been refused or cancelled, or which are otherwise prohibited from accepting deposits, and specifies when selected provisions of the Act cease to apply.
Current statutory source: The Banking Regulation Act, 1949 is Act No. 10 of 1949. For the official consolidated legislation, see the India Code page for the Banking Regulation Act, 1949. Regulatory material may also be checked on the Reserve Bank of India website.
Statutory text of Section 36A
36A. Certain provisions of the Act not to apply to certain banking companies.
(1) The provisions of section 11, sub-section (1) of section 12, and sections 17, 18, 24 and 25 shall not apply to a banking company-
(a) which, whether before or after the commencement of the Banking Companies (Amendment) Act, 1959 (33 of 1959), has been refused a licence under section 22, or prohibited from accepting fresh deposits by a compromise, arrangement or scheme sanctioned by a court or by any order made in any proceeding relating to such compromise, arrangement or scheme, or prohibited from accepting deposits by virtue of any alteration made in its memorandum; or
(b) whose licence has been cancelled under section 22, whether before or after the commencement of the Banking Companies (Amendment) Act, 1959 (33 of 1959).
(2) Where the Reserve Bank is satisfied that any such banking company as is referred to in sub-section (1) has repaid, or has made adequate provision for repaying all deposits accepted by the banking company, either in full or to the maximum extent possible, the Reserve Bank may, by notice published in the Official Gazette, notify that the banking company has ceased to be a banking company within the meaning of this Act, and thereupon all the provisions of this Act applicable to such banking company shall cease to apply to it, except as respects things done or omitted to be done before such notice.
Legislative note: Section 36A was inserted by the Banking Companies (Amendment) Act, 1959 (Act 33 of 1959), section 23, with effect from 1 October 1959.
What Section 36A means
Section 36A creates a limited statutory exclusion for specified banking companies. If a company falls within sub-section (1), the provisions expressly named there do not apply to it. The exclusion is not a general repeal of the Banking Regulation Act for that company; it is confined to the provisions identified in Section 36A(1), unless and until the Reserve Bank acts under sub-section (2).
Provisions excluded by Section 36A(1)
- Section 11: requirement as to minimum paid-up capital and reserves.
- Section 12(1): part of the statutory framework regulating capital of banking companies.
- Section 17: reserve fund.
- Section 18: cash reserve.
- Section 24: maintenance of a percentage of assets.
- Section 25: assets in India.
Banking companies covered by Section 36A(1)
The provision applies to a banking company whose licence under Section 22 has been refused, or whose licence has been cancelled. It also covers a banking company prohibited from accepting fresh deposits under a court-sanctioned compromise, arrangement or scheme, an order connected with such proceedings, or an alteration of its memorandum that prohibits the acceptance of deposits.
Power of the Reserve Bank under Section 36A(2)
Sub-section (2) addresses the position after deposits have been dealt with. If the Reserve Bank is satisfied that the banking company has repaid, or adequately provided for repayment of, all deposits either in full or to the maximum extent possible, it may publish a notice in the Official Gazette declaring that the company has ceased to be a banking company for the purposes of the Act.
After such notification, provisions of the Banking Regulation Act applicable to that banking company cease to apply prospectively. The section expressly preserves the legal effect of acts or omissions occurring before the Gazette notice.
Related provisions
Section 36A should be read with Section 22, which governs licensing of banking companies, and with the specific provisions excluded by sub-section (1). The wider statutory context also includes the Reserve Bank's inspection and supervisory powers under Sections 35, 35A and 36.
Official resources
For authoritative and updated material, refer to the Banking Regulation Act, 1949 on India Code and the Reserve Bank of India. The statutory text should be checked against the latest official consolidated version before relying on it for litigation, regulatory compliance or legal advice.