Sections 48 and 49 of the Banking Regulation Act, 1949
Application of fines and special provisions for private banking companies | Last reviewed: 14 September 2026
Sections 48 and 49 form part of the miscellaneous provisions of the Banking Regulation Act, 1949. Section 48 deals with how a court may apply a fine imposed under the Act. Section 49 removes specified company-law exemptions from a private company when that private company is also a banking company.
Section 48 - Application of fines
A Court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the rewarding of the person on whose information the fine is recovered.
What Section 48 means
Section 48 gives the court a discretion over the use of a fine imposed under the Banking Regulation Act, 1949. The court may direct that all or part of the fine be used for the costs of the proceedings or for rewarding the person whose information led to recovery of the fine.
The provision is therefore concerned with the application of a fine after it is imposed. It does not itself create the underlying offence or prescribe the amount of the penalty.
Section 49 - Special provisions for private banking companies
The exemptions, whether express or implied, in favour of a private company in sections 90, 165, 182, 204 and 255, clauses (a) and (b) of sub-section (1) of section 293 and sections 300, 388A and 416 of the Companies Act, 1956 (1 of 1956), shall not operate in favour of a private company which is a banking company.
The current official text of Section 49 continues to reproduce the above references to provisions of the Companies Act, 1956. Those references are retained here as part of the statutory text and have not been substituted with provisions from the Companies Act, 2013.
Legislative note: the earlier references to sections 17, 77, 83B, 86H, 91B and 91D and sub-section (5) of section 144 of the Indian Companies Act, 1913 were successively amended by Act 95 of 1956, section 11; Act 33 of 1959, section 34; and Act 55 of 1963, section 27, resulting in the text reproduced above.
What Section 49 means
Section 49 provides that the specified exemptions ordinarily available to a private company under the company-law provisions named in the section do not operate in favour of a private company that is a banking company.
Its purpose is to ensure that a banking company cannot rely on those private-company exemptions merely because it is incorporated as a private company. The Banking Regulation Act applies its additional regulatory framework to banking companies because banking involves acceptance and use of public deposits.
Meaning of "banking company"
Section 5(c) of the Banking Regulation Act, 1949 defines a "banking company" as any company which transacts the business of banking in India. Section 5(b) defines "banking" as accepting deposits of money from the public for lending or investment, where the deposits are repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.
Official legal sources
India Code: Banking Regulation Act, 1949 - official consolidated Act page.
Reserve Bank of India: RBI official website for banking regulation, notifications, circulars and supervisory information.
Department of Financial Services: Ministry of Finance - Department of Financial Services.
Related provisions of the Banking Regulation Act, 1949
For the next provisions dealing with restrictions on deposits, change of name and alteration of memorandum, see Sections 49A, 49B and 49C. You may also continue to Section 50 - Certain claims for compensation barred.