(1)No banking company shall carry on business in India, unless it satisfies the following conditions, namely:-(i)that the subscribed capital of the company is not less than one-half of the authorised capital, and the paid-up capital is not less than one-half of the subscribed capital and that, if the capital is increased, it complies with the conditions prescribed in this clause within such period not exceeding two years as the Reserve Bank may allow;(ii)[ that, notwithstanding anything contained in the Companies Act, 1956, the capital of such banking company consists of-(a)equity shares only; or(b)equity shares and preference shares:Provided that the issue of preference share shall be in accordance with the guidelines framed by the Reserve Bank specifYing the class of preference shares, the extent of issue of each class of such preference shares (whether perpetual or irredeemable or redeemable), and the terms and conditions subject to which each class of preference shares may be issued :-Provided further that no holder of the preference share, issued by the company, shall be entitled to exercise the. voting right specified in clause (b) of sub-section (2) of section 87 of the Companies Act, 1956;] [Substituted by Act 33 of 1959, Section 7, for sub-Section (5) (w.e.f. 1.10.1959).]
