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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Meridian Bank Ltd is a banking company with its head office in Mumbai and branches across several States, including Kerala and Jammu and Kashmir. A trainee at the bank says the Banking Regulation Act, 1949 does not cover branches in some States. As per Section 1 of the Act, what is its territorial extent?

The Banking Regulation Act, 1949 extends to the whole of India under Section 1(2). The earlier exclusion of Jammu and Kashmir was omitted from 1 November 1956, so branches in every State are covered by the Act.

  1. AIt extends to the whole of IndiaCorrect
  2. BIt extends to India except the State of Jammu and Kashmir
  3. CIt extends only to States notified by the Reserve Bank
  4. DIt extends only to the Presidency towns of India

Explanation

Section 1(2) states that the Act extends to the whole of India. The words 'except the State of Jammu and Kashmir' were omitted with effect from 1 November 1956, so the second option reflects an outdated position.

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