Banking Regulation Act, 1949 — back to Table of Contents
Section 49A. Restriction on acceptance of deposits withdrawable by cheque
Only a banking company, the Reserve Bank, the State Bank of India, or another banking institution, firm or person specifically notified by the Central Government (on the Reserve Bank’s recommendation) may accept deposits of money from the public that are withdrawable by cheque.
This provision does not apply to any savings bank scheme run by the Government.
In effect, this reserves cheque-operable deposit-taking — a core banking function — to licensed banks and a narrow, government-notified set of exceptions, closing off a route by which non-bank entities might otherwise mimic banking business.
Note: This section was inserted by the Banking Companies (Amendment) Act, 1959.
