Section 58B of the RBI Act, 1934: Penalties and Punishments
Section 58B of the Reserve Bank of India Act, 1934 prescribes criminal consequences for false information, failure to furnish statutory records, unlawful deposit-taking, prohibited disclosures, non-compliance by auditors and other breaches of the Act or directions issued under it. The section contains distinct penalties depending on the nature of the offence.
Meaning and scope of Section 58B
The section forms part of Chapter V, titled Penalties. It operates alongside Chapter IIIB (provisions concerning non-banking institutions receiving deposits and financial institutions) and related provisions governing registration, deposit advertisements, confidentiality and RBI supervisory directions. The expression continuing default refers to non-compliance that persists beyond the initial day and may attract an additional daily fine where the particular sub-section so provides.
58B(1): False statements and material omissions
Knowingly making a materially false statement or wilfully omitting a material statement in statutory filings, information, prospectuses or advertisements concerning public deposits is punishable with imprisonment up to three years and fine.
58B(2): Failure to furnish records or information
Failure to produce required books, accounts or documents, supply information, or answer a lawful question attracts a fine up to Rs. 1 lakh for each offence. A continuing failure may attract a further fine up to Rs. 5,000 per day after the first day.
58B(3): Contravention of Section 31
Section 31 restricts the issue of certain bills, hundis, promissory notes and undertakings for payment of money. Contravention may result in a fine up to the amount of the instrument or undertaking involved.
58B(4): Unlawful disclosure of credit information
Disclosure of credit information prohibited by Section 45E may be punished with imprisonment up to six months, a fine up to Rs. 1,000, or both.
58B(4A): Carrying on NBFC business without registration
Contravention of Section 45-IA(1), concerning the certificate of registration and net owned fund requirements for non-banking financial companies, carries imprisonment of at least one year and up to five years, together with a fine of at least Rs. 1 lakh and up to Rs. 25 lakh.
58B(4AA): Auditor non-compliance
An auditor failing to comply with an RBI direction or order under Section 45MA may be fined up to Rs. 10 lakh.
58B(4AAA): Non-compliance with deposit repayment orders
Failure to comply with an order under Section 45QA(2), relating to repayment of deposits, may attract imprisonment up to three years and a fine of at least Rs. 5,000 for each day the non-compliance continues. The statutory text refers to the Company Law Board; institutional succession and applicable transitional provisions should be considered.
58B(5): Unauthorised deposits and directions
A person other than an auditor who receives deposits without authorisation or contrary to Chapter IIIB directions, fails to comply with directions or orders under that Chapter, or issues prohibited deposit advertisements or prospectuses, may face imprisonment up to three years and fine. For specified deposit or advertisement contraventions, the fine may extend to twice the deposit received or sought.
58B(5A): Deposits contrary to Section 45S
Section 45S restricts acceptance of deposits by specified individuals, firms and unincorporated associations. A breach may attract imprisonment up to two years, a fine up to twice the deposit received or Rs. 2,000, whichever is higher, or both. Ordinarily, imprisonment is at least one year and the fine at least Rs. 1,000 unless the court records special and adequate reasons.
58B(5B): Magistrate's power to impose fine
For convictions under sub-section (5A), a Metropolitan Magistrate or Judicial Magistrate First Class may impose a fine above the ordinary statutory limit, notwithstanding the reference to Section 29 of the Code of Criminal Procedure, 1973. Current procedural law and savings provisions must be considered for proceedings instituted after the commencement of the BNSS.
58B(6): Other contraventions
Other contraventions of the Act, statutory requirements, regulations, directions or conditions may attract a fine up to Rs. 1 lakh and, for a continuing default, a further fine up to Rs. 10,000 per day after the first day.
Related statutory provisions
Section 45-IA regulates registration of non-banking financial companies; Section 45MA concerns RBI directions to auditors; Section 45QA concerns repayment of deposits; Section 45S restricts acceptance of deposits by specified persons and associations; Section 45E protects credit information from prohibited disclosure. Section 58C addresses offences by companies, Section 58E deals with cognizance of offences, and Section 58G provides a separate mechanism for RBI-imposed penalties against non-banking financial companies, subject to its statutory conditions.
Official text and resources
Read the Reserve Bank of India Act, 1934 - consolidated government PDF (Department of Financial Services) and consult the Reserve Bank of India for relevant directions, circulars and regulatory updates. Statutory amendments and commencement dates must be verified against the applicable official notifications.
Note: This article explains the legal provisions generally and does not replace the statute or case-specific legal advice.