Banking and Insurance - Laws and Practice · Control over Organization of Banks

Application of the Banking Regulation Act to SBI and Notified Banks (Section 51)

Updated 11 October 2026 · Fact-checked

Section 51 extends a listed set of Banking Regulation Act provisions to the State Bank of India, corresponding new banks, Regional Rural Banks and subsidiary banks, so far as may be, as they apply to banking companies. One proviso with three clauses, (a) to (c), gives exceptions. Sub-section (2) reads references to a banking company as including these banks.

Understand Application of the Act to State Bank of India and Notified Banks (Section 51)

The Banking Regulation Act, 1949 is written mainly for banking companies. State Bank of India, nationalised banks and Regional Rural Banks are created under their own laws, such as the State Bank of India Act, 1955. So the Banking Regulation Act does not automatically apply to them in full.

Section 51 solves this. It says that, without prejudice to the State Bank of India Act, 1955 or any other enactment, a listed set of provisions applies to the State Bank of India and to any corresponding new bank, Regional Rural Bank or subsidiary bank. It applies them "so far as may be", as they apply to banking companies. The words "so far as may be" mean the provisions apply only to the extent they fit the nature of the bank.

The section is selective. It does not apply the whole Act. It names sections, and some are applied with carve-outs. Section 29 applies excluding sub-section (3). Section 30 applies only through sub-sections (1B), (1C) and (2). Section 36 applies excluding clause (d) of sub-section (1). Your job in the exam is to recall this pattern, not memorise every number.

The section then has one proviso with three clauses, (a) to (c), and each clause is an exception. They protect officials who sit on bank boards, and they relax one lending restriction for loans to companies largely held by the government or the RBI. Sub-section (2) finishes the job: references to a banking company in any rule or direction under these provisions also cover these banks, unless the rule or direction says otherwise.

The result: SBI and similar banks follow most of the Act's control provisions, such as those on RBI powers, inspection and directions, but not all, and not in the same form as a private banking company.

Key rules to remember

Banks covered by section 51: State Bank of India + corresponding new bank + Regional Rural Bank + subsidiary bank; The provisions apply to these as they apply to banking companies, so far as may be.
Provisions applied (as listed in the text): Sections 10, 13 to 15, 17, 19 to 21A, 23 to 28, 29 (excluding sub-section (3)), 29A, 30(1B), (1C) and (2), 31, 34, 35, 35A, 35AA, 35AB, 36 (excluding clause (d) of sub-section (1)), 45Y to 45ZF, 46 to 48, 50, 52 and 53; Learn the three partial applications: section 29 without sub-section (3), section 30 only in part, section 36 without clause (d) of sub-section (1).
Saving clause: Without prejudice to the State Bank of India Act, 1955 or any other enactment; The bank's own statute stays in force alongside section 51.
Proviso (a): Section 10(1)(c) does not apply to the SBI chairman or a subsidiary bank's managing director to the extent it bars being a director of, or holding office in, an institution approved by the RBI; Section 10 itself applies; only this bar is relaxed.
Proviso (b): Section 20(1)(b)(iii) does not bar commitments to lend to a non-Government company with at least 40% paid-up capital held by the Central Government, the RBI or an RBI-owned corporation; Held singly or taken together.
Proviso (c): Sections 46 and 47A do not apply to (i) a Central Government or RBI officer nominated or appointed as director of SBI, a corresponding new bank, a Regional Rural Bank, a subsidiary bank or a company, or (ii) an officer of SBI, a corresponding new bank, a Regional Rural Bank or a subsidiary bank nominated or appointed as director of any of these banks (not being the bank of which he is an officer) or of a banking company; In limb (ii), the exemption does not cover a directorship in the officer's own bank. It covers a directorship in another of these banks or in a banking company.
Sub-section (2): Reference to a banking company in a rule or direction = also SBI, corresponding new bank, a Regional Rural Bank and subsidiary bank; Unless the rule or direction provides otherwise.

How to solve Application of the Act to State Bank of India and Notified Banks (Section 51) questions

Use this method for any question on whether a provision of the Banking Regulation Act applies to SBI or another bank.

1Identify the type of bank in the facts: SBI, corresponding new bank, Regional Rural Bank, subsidiary bank, or an ordinary banking company.
2If it is an ordinary banking company, section 51 is not needed; the Act applies directly. Say so briefly.
3Otherwise state the rule: section 51 applies the listed provisions, so far as may be, as they apply to banking companies, without prejudice to the bank's own statute.
4Check whether the section in question is on the list, and whether it is applied in part (sections 29, 30, 36).
5Check the three clauses of the proviso and sub-section (2) for any exemption or extension that matches the facts.
6Apply the provision to the facts and note the effect of the phrase "so far as may be".
7Conclude clearly: applies, applies in part, or does not apply, and state the consequence for the bank.
8 Keep the answer in the order: provision, analysis, conclusion.

Quickest way: Three-check shortcut

When to use it: Short questions asking whether a section applies to SBI or a notified bank.

Check 1: Is the bank type covered (SBI, corresponding new bank, RRB, subsidiary bank)?
Check 2: Is the section on the list, and is it partial (29, 30, 36)?
Check 3: Does a proviso or sub-section (2) change the result?
Write one line for each check and close with the conclusion.

Common mistakes in Application of the Act to State Bank of India and Notified Banks (Section 51)

Saying the whole Banking Regulation Act applies to SBI.
Students overlook that section 51 names specific provisions.
Fix: Write that only the listed provisions apply, so far as may be, and that the bank's own Act continues.
Ignoring the partial applications of sections 29, 30 and 36.
The list is long and students memorise only section numbers.
Fix: Remember the three carve-outs: 29 excludes sub-section (3); 30 applies only sub-sections (1B), (1C) and (2); 36 excludes clause (d) of sub-section (1).
Treating the proviso as removing a whole section.
Students read "nothing contained in" as a total exemption.
Fix: Each clause of the proviso removes only a specific clause or section as described, such as section 10(1)(c) or 20(1)(b)(iii), and only for the persons or loans described.
Forgetting the loan relaxation in proviso (b) requires 40% paid-up capital held by the Government, RBI or an RBI-owned corporation, and that the company is not a Government company.
The condition sits inside a long sentence.
Fix: Note the two conditions: not a Government company, and at least 40% held singly or together.
Leaving out sub-section (2).
It is short and appears after the proviso.
Fix: Mention that references to a banking company in rules or directions also cover these banks unless the rule says otherwise.

Worked examples

Example 1

Explain whether the provisions of the Banking Regulation Act, 1949 on the RBI's power to give directions and on inspection apply to a Regional Rural Bank. (Answer in provision, analysis, conclusion form.)

Show the solution

Provision: Section 51(1) applies the listed provisions, so far as may be, to the State Bank of India, a corresponding new bank, a Regional Rural Bank or a subsidiary bank, as they apply to banking companies, without prejudice to other enactments.
Analysis: A Regional Rural Bank is named in the section, so it is covered. The list includes sections 35 and 35A, so the RBI's inspection and direction powers apply to it, and sections 45Y to 45ZF and 46 to 48 also appear.
Analysis: Sub-section (2) adds that references to a banking company in any rule or direction under these provisions also mean the Regional Rural Bank, unless the rule or direction says otherwise.
Conclusion: The provisions apply to the Regional Rural Bank, to the extent they suit its nature.

Answer: Yes. Section 51 covers a Regional Rural Bank, and sections 35 and 35A are on the list, so the RBI's inspection and direction powers apply, so far as may be.

Example 2

Ms. Rao is the chairman of the State Bank of India and has been invited to be a director of an institution approved by the Reserve Bank. Section 10(1)(c) bars a director or officer of a banking company from certain roles. Can section 10(1)(c) stop her?

Show the solution

Provision: Section 51 applies section 10 to the State Bank of India as it applies to banking companies.
Proviso (a): Nothing in clause (c) of section 10(1) applies to the chairman of the State Bank of India, or a managing director of a subsidiary bank, so far as it prevents being a director of, or holding an office in, an institution approved by the Reserve Bank.
Analysis: The facts involve the SBI chairman and an RBI-approved institution, which matches proviso (a) exactly.
Conclusion: Section 10(1)(c) cannot stop her from this appointment.

Answer: No. Under proviso (a) to section 51, clause (c) of section 10(1) does not bar the SBI chairman from being a director of, or holding office in, an RBI-approved institution.

Exam tips

Start with the rule that section 51 applies listed provisions, so far as may be. This earns marks in any answer.
Learn the three partial applications (29, 30, 36) and the three clauses of the proviso. Examiners test these exceptions.
Name the bank types exactly: SBI, corresponding new bank, Regional Rural Bank, subsidiary bank.
In case questions, write provision, analysis of facts, then a clear conclusion, and mention sub-section (2) where rules or directions are involved.

Practice questions from Control over Organization of Banks

Application of the Act to State Bank of India and Notified Banks (Section 51) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Application of the Act to State Bank of India and Notified Banks (Section 51): frequently asked questions

What does section 51 of the Banking Regulation Act do?

It applies a listed set of provisions of the Act to the State Bank of India, corresponding new banks, Regional Rural Banks and subsidiary banks, as they apply to banking companies. The application is "so far as may be" and without prejudice to other laws such as the State Bank of India Act, 1955.

Does the whole Banking Regulation Act apply to SBI?

No. Only the provisions named in section 51 apply, and some apply in part. For example, section 29 applies excluding sub-section (3), and section 36 excludes clause (d) of sub-section (1).

What does "so far as may be" mean here?

It means the listed provisions apply only to the extent they fit the bank concerned. A provision written for a company may need adaptation when applied to a bank created by its own statute.

What is the effect of sub-section (2) of section 51?

It says references to a banking company in any rule or direction relating to the listed provisions are read as including the State Bank of India, a corresponding new bank, a Regional Rural Bank and a subsidiary bank. This holds unless the rule or direction provides otherwise.