Section 36AE(1) in The Banking Regulation Act, 1949
(1)If, upon receipt of a report from the Reserve Bank, the Central Government is satisfied that a banking company-(a)has, on more than one occasion, failed to comply with the directions given to it in writing under section 21 or section 35-A, insofar as such directions relate to banking policy, or(b)is being managed in a manner detrimental to the interests of its depositors,-and that-(i)in the interests of the depositors of such banking company, or(ii)in the interest of banking policy, or(iii)for the better provision of credit generally or of credit to any particular section of the community or in any particular area, it is necessary to acquire the undertaking of such banking company, the Central Government may, after such consultation with the Reserve Bank as it thinks fit, by notified order, acquire the undertaking of such company (hereinafter referred to as the acquired bank) with effect from such date as may be specified in this behalf by the Central Government (hereinafter referred to as the appointed day):Provided that no undertaking of any banking company shall be so acquired unless such banking company has been given a reasonable opportunity of showing cause against the proposed action.Explanation. - In this Part,-(a)"notified order" means an order published in the Official Gazette;(b)"undertaking", in relation to a banking company incorporated outside India, means the undertaking of the company in India.
