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2. The brief facts relevant for disposing of the present appeal are that in November 1996, the appellant applied to respondent No. 1, namely, the Reserve Bank of India (RBI), under Section 22 of the of the Banking Regulation Act, 1949 (hereinafter referred to as `the Act') for grant of a license to it to commence banking business. In January, 1999 the RBI, conveyed its approval in principle for the promotion of a local area bank subject to various terms and conditions and finally on 28th July, 2000, granted a license to the appellant to carry on banking business. It was an express condition of the said license that the appellant would always maintain a minimum paid up capital of Rs. 5 crores as per the requirement of the RBI Guidelines regarding capital adequacy.