Sections 4, 5 and 6 of the Reserve Bank of India Act, 1934
Sections 4 to 6 form part of Chapter II of the Reserve Bank of India Act, 1934. They deal with the statutory capital of the Reserve Bank of India, the historical provision relating to increase and reduction of share capital, and the establishment of RBI offices, branches and agencies.
Section 4 - Capital of the Bank
Statutory rule: The capital of the Reserve Bank of India is five crores of rupees.
Section 4 fixes the Bank's statutory capital. The present provision was substituted by the Reserve Bank (Transfer to Public Ownership) Act, 1948 with effect from 1 January 1949, when the ownership structure of the Reserve Bank was changed.
Section 5 - Omitted provision
Current status: Section 5 is omitted.
The former Section 5 dealt with the increase and reduction of share capital. It was omitted by Section 7 and the Schedule to the Reserve Bank (Transfer to Public Ownership) Act, 1948 with effect from 1 January 1949. Accordingly, an up-to-date presentation of the RBI Act should identify Section 5 as omitted rather than as an operative provision.
Section 6 - Offices, branches and agencies
The provision requires the Bank to establish offices in Bombay, Calcutta, Delhi and Madras and authorises it to establish branches or agencies at any other place in India. A branch or agency elsewhere may be established with the previous sanction of the Central Government.
The statutory text retains the historical city names used in the legislation. These words should not be silently modernised when stating the provision because the purpose of a bare-Act page is to preserve the enacted and consolidated statutory language. In present-day usage, Bombay, Calcutta and Madras are known as Mumbai, Kolkata and Chennai respectively.
Legal significance of Sections 4 to 6
Together, these provisions form part of the institutional framework of the Reserve Bank. Section 4 specifies its statutory capital; the omission of Section 5 reflects the transition to public ownership; and Section 6 provides the statutory basis for the Bank's office, branch and agency network in India and, subject to prior Central Government sanction, elsewhere.