11. Requirement as to minimum paid-up capital and reserves
(1)Notwithstanding anything contained in section 103 of the Indian Companies Act, 1913, no banking company in existence on the commencement of this Act, shall, after the expiry of three years from such commencement or of such further period not exceeding , one year as the Reserve Bank, having regard to the interests of the depositors of the company, may think fit in any particular case to allow, carry on business {Subs, by Act 20 of 1950,s.3, for ” in any State”.} [in India], and no other banking company shall, after the commencement of this Act, commence or carry on business {Subs, by Act 20 of 1950,s.3, for ” in any State”.} [in India], unless it has paid-up capital and reserves of such aggregate value as is hereinafter required by this section.(2)In the case of a banking company incorporated {Subs., ibid., for “elsewhere than in a State”.} [outside India], the aggregate value of its paid-up capital and reserves shall not be less than fifteen lakhs of rupees, and, if it has a place or places of business in the city of Bombay or Calcutta or both, twenty lakhs of rupees:Provided that no such banking company shall be deemed to have complied with the provisions of this sub-section, unless it deposit and keeps deposited with the Reserve Bank an amount not less than the minimum required by this sub-section, either in cash or in unencurnbered approved securities or partly in cash and partly in such securities.(3)In the case of any banking company to which the provisions of sub-sectlon (2) do not apply, the aggregate value of its paid-up capital and reserves shall not be less than—(i)if it has places of business in more than one State, five lakhs of rupees, and if any such place or places of business is or are situated in the city of Bombay or Calcutta or both, ten lakhs of rupees;(ii)if it has all its places of business in one State none of which is situated in the city of Bombay or Calcutta, one lakh of rupees in respect of its principal place of business, plus ten thousand rupees in respect of each of its other places of business situated in the same district in which it has its principal place of business, plus twenty-five thousand rupees in respect of each place of business situated elsewhere in the State otherwise than in the same district:Provided that no banking company to which tllis clause applies shall be required to have paid-up capital and reserves exceeding an aggregate value of five lakhs rupees:Provided further that no manking company to which this clause applies and which has only one place of business shall be required to have paid-up capital and reserves exceeding an aggregate value of fifty thousand rupees;(iii)if it has all its places of business in one State, one or more of which is or are situated in the city of Bombay or Calcutta, five lakhs of rupees, plus twenty-five thousand rupees in respect of each place of business situated outside the city of Bombay or Calcutta, as the case may beProvided that no banking company to which this clause applles shall be required to have paid-up capital and reseves exceeding an aggregate value of ten lakhs of rupees.Explanation.—For the purposes of this sub-section, a place of business situated{Subs.by Act 20 of 1950, s.3, for ” in a State “.} [in India] other than that in which the principal place of business of the banking company is situated shail, if it is not rnore than twenty-five miles distant from such principal place of business, be deemed to be situated within the same State as such principal place of business.(4)Any amount deposited and kept deposited with the Reserve Bank under the proviso to sub-section (2) by any banking company incorporated {Subs, ibid., for “elsewhere than in a State “.}[outside India] shall, in the event of the company ceasing for any reason to carry on banking business {Subs, ibid., for ” in the States “.} [in India], be an asset of the company on which the claims of all the creditors of the company { Subs, ibid., for ” in the States “.} [in India] shall be a first charge.(5)For the purposes of this section ” value ” means the real or exehangeable value, and not the nominal value which may be shown in the books of the banking company concerned.(6)If any dispute arises in computing the aggregate value of the paid-up capital and reserves of any banking company, a determination thereof by the Reserve Bank shall be final for the purposes of this section.
