Section 45 MB - Power of bank to prohibit acceptance of deposit and alienation of assets, Section 45 MC - Power of Bank to file winding up petition : RBI Act 1934

What is the Power of bank to prohibit acceptance of deposit and alienation of assets? What is the Power of Bank to file winding up petition? Section 45MB and 45MC of Reserve Bank of India Act 1934

Section 45-MC of RBI Act 1934 : "Power of bank to prohibit acceptance of deposit and alienation of assets"

(1) If any non-banking financial company violates the provisions of any section or fails to comply with any direction or order given by the bank under any of the provisions of this Chapter, the bank may prohibit the non-banking financial company from accepting any deposit.

(2) Notwithstanding anything to the contrary contained in any agreement or instrument or any law for the time being in force, the bank, on being satisfied that it is necessary so to do in the public interest or in the interest of the depositors, may direct, the non-banking financial company against which an order prohibiting from accepting deposit has been issued, not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of the bank for such period not exceeding six months from the date of the order.

Section 45-MC of RBI Act 1934 : "Power of Bank to file winding up petition"

(1) The Bank, on being satisfied that a non-banking financial company,-

(a) is unable to pay its debt; or

(b) has by virtue of the provisions of section 45-IA become disqualified to carry on the business of a non-banking financial institution ; or

(c) has been prohibited by the Bank from receiving deposit by an order and such order has been in force for a period of not less than three months ; or

(d) the continuance of the non-banking financial company is detrimental to the public interest or to the interest of the depositors of the company,
may file an application for winding up of such non-banking financial company under the Companies Act, 1956 (1 of 1956).

(2) A non-banking financial company shall be deemed to be unable to pay its debt if it has refused or has failed to meet within five working days any lawful demand made at any of its offices or branches and the Bank certifies in writing that such company is unable to pay its debt.

(3) A copy of every application made by the Bank under sub-section (1) shall be sent to the Registrar of Companies.

(4) All the provisions of the Companies Act, 1956 (1 of 1956) relating to winding up of a company shall apply to a winding up proceeding initiated on the application made by the Bank under this provision.