Banking Regulation Act, 1949
(1) Notwithstanding anything to the contrary contained in [section 235 of the Companies Act, 1956 (1 of 1956),] the Reserve Bank at any time may, and on being directed so to do by the Central Government shall, cause an inspection to be made by one or more of its officers of any banking company and its books and accounts; and the Reserve Bank shall supply to the banking company a copy of its report on such inspection.
[(1A) (a) Notwithstanding anything to the contrary contained in any law for the time being in force and without prejudice to the provisions of sub-section (1), the Reserve Bank, at any time, may also cause a scrutiny to be made by any or more of its officers, of the affairs of any banking company and its books and accounts; and
(b) A copy of the report of the scrutiny shall be furnished to the banking company if the banking company makes a request for the same or if any adverse action is contemplated against the banking company on the basis of the scrutiny.]
(2) It shall be the duty of every Director or other officer 140[or employee] of the banking company to produce to any officer making an inspection under sub-section (1) 134[or a scrutiny under sub-section (1A)1 all such books, accounts and other documents in his custody or power and to furnish him with any statements and information relating to the affairs of the banking company as the said officer may require of him within such time as the said officer may specify.
(3) Any person making an inspection under sub-section(1) [or a scrutiny under sub-section (1A)] may examine on oath any Director or other officer [or employee] of the banking company in relation to its business, and may administer any oath accordingly.
(4) The Reserve Bank shall, if it has been directed by the Central Government to cause an inspection to be made, and may, in any other case, report to the Central Government on any inspection [or scrutiny] made under this section, and the Central Government, if it is of opinion after considering the report that the affairs of the company are being conducted to the detriment of the interests of its depositors, may, after giving such opportunity to the banking company to make a representation in connection with the report as, in the opinion of the Central Government, seems reasonable, by order in writing-
(a) prohibit the banking company from receiving fresh deposits;
(b) direct the Reserve Bank to apply under section 38 for the winding up of the banking company:
PROVIDED that the Central Government may defer, for such period as it may think fit, the passing of an order under this sub-section, or cancel or modify any such order, upon such terms and conditions as it may think fit to impose.
(5) The Central Government may, after giving reasonable notice to the banking company, publish the report submitted by the Reserve Bank or such portion thereof as may appear necessary.
Explanation: For the purposes of this section, the expression "banking company" shall include-
(i) in the case of a banking company
(ii) in the case of a banking company
(a) all its
subsidiaries formed for the purposes of carrying on the business of banking
(b) all its branches
whether situated in