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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

Which of the following correctly describes the position of section 45G of the Reserve Bank of India Act, 1934 in the text of the Act, and what that means for a penalty claim?

Section 45G, headed Penalties, was inserted in 1962 but omitted by the Reserve Bank of India (Amendment) Act, 1974 with effect from 13 December 1974. It is no longer operative, so no penalty can be sought under it.

  1. AIt is in force and prescribes penalties for non-banking institutions
  2. BIt stands omitted by the 1974 Amendment Act with effect from 13 December 1974, so no penalty can be imposed under itCorrect
  3. CIt was omitted in 1953 and replaced by section 45J
  4. DIt was inserted in 1974 to penalise violations by banking companies

Explanation

The Act shows section 45G (Penalties), inserted in 1962, as omitted by Act 51 of 1974 with effect from 13-12-1974. A penalty cannot therefore be claimed under it. The 1953 reference relates to the Banking Regulation Act, and the 1974 change was an omission, not an insertion.

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