(1)Save as hereinafter provided, no company shall carry on banking business{Subs.by Act 20 of 1950, s.3, for ” in any State “.} [in India] unless it holds a licence granted by the Reserve Bank in such behalf.(2)Every banking company in existence on the commencement of this Act, before the expiry of six months from such commencement, and every other company before commencing banking business {Subs.by Act 20 of 1950, s.3, for ” in any State “.} [in India], shall apply in writing to the Reserve Bank for a licence under this section:Provided that in the case of a banking company in existence or the commencement of this Act, nothing in sub-section ( ]) shall be deemed to prohibit the company from carrying on banking business until it is granted a licence in pursuance of sub-section (2) or is by notice in writing informed by the Reserve Bank that a licence cannot be granted to it:Provided further that the Reserve Bank shall not give a notice as aforesaid to a banking company in existence on the commencement of this Act before the expiry of the three years referred to in sub-section (1) of section 11 or of such further period as the Reserve Bank may under that sub-section think fit to allow.(3)Before granting any licence under this section, the Reserve Bank may require to be satisfied by an inspection of the books of the company or otherwise that all or any of the following conditions are fulfilled, namely:—(a)that the company is in a position to pay its depositors in full as their claims accrue;(b)that the affairs of the company are not being conducted to the detriment of the interests of its depositors;(c)in the case of a company incorporated {Subs.by Act 20 of 1950, s.3, for ‘ elseswhere than in a State “} [outside India] that the Government or law of the country in which it is incorporated does not discriminate in any way against banking companies registered {Subs., ibid., for ‘ in a State “.} [in India], and that the company complies with all the provisions of this Act, applicable to banking companies incorporated {Subs., ibid, for ” outside the States’} [outside India].(4)The Reserve Bank may—(a)cancel any licence granted under this section where any of the conditions set out in sub-section (3), on the fulfilment of which it required to be satisfied when granting the licence, ceases to be fulfilled or if the company ceases to carry on banking business {Subs., ibid-, for ” in the States “.} [in India] or goes into liquidation;(b)at any time after granting a licence under this section require that any of the said conditions, on the fulfilment of which it did not require to be satisfied when granting the licence, shall be fulfilled to its satisfaction within such time as it may specify, and if the condition is not so fulfilled, cancel the licence.(5)Any banking company aggrieved by the cancellation of its licence under sub-section (4) may appeal to the Central Government, and the decision of the Central Government on such appeal shall be final.
