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CS Professional · Banking and Insurance - Laws and Practice · Banking Operations

Following cancellation of its licence under section 22, Gomti Credit Bank Ltd has repaid all deposits in full. The RBI is satisfied about this. Which course is open to the RBI under section 36A?

The RBI may publish a notice in the Official Gazette declaring that the company has ceased to be a banking company. After that, the Act's provisions stop applying to it, except for things done or omitted to be done before the notice.

  1. AIt may notify by Gazette notice that the company has ceased to be a banking company, after which the Act's provisions cease to apply except for earlier acts or omissionsCorrect
  2. BIt must refer the matter to the Central Government, whose decision is final
  3. CIt may restore the licence only by a court order
  4. DIt must keep all provisions of the Act applicable for three years

Explanation

Section 36A(1)(b) covers companies whose licence has been cancelled, and 36A(2) lets the RBI, when satisfied that deposits have been repaid or adequately provided for, notify in the Official Gazette that it has ceased to be a banking company. Thereafter the Act's provisions cease to apply except for things done or omitted before the notice.

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