Banking Regulation Act, 1949 — back to Table of Contents
Section 47A. Power of Reserve Bank to impose penalty
(1) Notwithstanding section 46, where a banking company commits a contravention or default of the kind described in section 46(2), (3) or (4), the Reserve Bank may itself impose a penalty on the banking company:
(a) for a contravention of the kind in section 46(2) — a penalty of up to twenty lakh rupees per offence, plus, if it persists, a further penalty of up to fifty thousand rupees for every day after the first day it continues;
(b) for a contravention of the kind in section 46(3) — a penalty of up to twice the amount of the deposits involved;
(c) for a contravention of the kind in section 46(4) — a penalty of up to one crore rupees or twice the amount involved (whichever is more), plus a further penalty for continuing default.
The Reserve Bank must give the banking company reasonable notice and an opportunity of being heard before imposing a penalty.
The penalty is payable within fourteen days of a demand notice; if unpaid, the Reserve Bank may apply to the principal civil court having jurisdiction to enforce payment, and any certificate issued by that court is enforceable as if it were a civil decree.
Where a complaint in respect of the same contravention or default has already been filed in court under section 46(3) or (4), no separate penalty proceedings may be taken under this section for that same matter — the two routes (criminal prosecution and RBI-imposed penalty) are mutually exclusive for a given contravention.
Note: Section 47A was inserted by the Banking Laws (Miscellaneous Provisions) Act, 1963, giving the Reserve Bank a direct administrative penalty power alongside the criminal-prosecution route under sections 46–47.
