RBI ACT, 1934 — Part VII (FINAL PART)

Sections 53–58G + Schedules

This is the last substantive stretch of the Act in your PDF. Pay attention: from here the Act moves from administration → regulation → penalties and enforcement.

CHAPTER IV — GENERAL PROVISIONS

53. Returns.

53(1)

RBI must prepare and send the Central Government a weekly account of:

Issue Department
Banking Department

The form is prescribed by the Central Government through notification in the Gazette of India.

The Central Government must cause these accounts to be published in the Gazette of India at intervals and in a modified form as it considers appropriate.

Exam hook:
👉 Weekly return = Issue Department + Banking Department

53(2)

Within 2 months after RBI’s annual accounts are closed, RBI must send Central Government:

copy of annual accounts;
accounts signed by:
- Governor,
- Deputy Governors,
- Chief Accounting Officer;
accounts certified by auditors;
Central Board’s report on RBI’s working during the year.

Central Government must cause the accounts and report to be published in the Gazette of India.

Number:
👉 Annual accounts → within 2 months

53(3)

Omitted.

54. Rural Credit and Development.

RBI may maintain expert staff to study rural credit and development.

In particular, RBI may:

54(a)

Provide expert guidance and assistance to NABARD.

54(b)

Conduct special studies in areas RBI considers necessary for promoting integrated rural development.

Simple:
👉 RBI can maintain specialists for rural credit + rural development research/support.

54A. Delegation of powers.

54A(1)

Governor may, by general or special order, delegate to a Deputy Governor such powers/functions exercisable by him under:

RBI Act, or
any other law in force,

as he considers necessary for efficient administration of RBI’s functions.

The delegation may contain conditions and limitations.

Key point:
👉 Governor → Deputy Governor

54A(2)

If a Deputy Governor exercises a power or performs an act under the Act, that itself is conclusive proof of his authority to do so.

Exam phrase: Conclusive proof of authority.

54AA. Power of Bank to depute its employees to other institutions.

54AA(1)

RBI may, despite anything in any law or agreement, depute a staff member for a period RBI considers appropriate:

54AA(1)(a)

To an institution wholly or substantially owned by RBI.

54AA(1)(b)

To the Development Bank, but such deputation cannot continue beyond the specified statutory period of 30 months from commencement of the relevant amendment.

54AA(1)(c)

To the Unit Trust, subject to the specified 30-month statutory limit from the relevant notified date.

During deputation, the employee performs services required by the institution.

54AA(2)

A deputed employee cannot claim salary, emoluments or service conditions that he would not have been entitled to claim without deputation.

54AA(3)

RBI cannot deputate an employee on terms that are less favourable than those immediately before deputation.

Simple:
👉 Deputation can happen, but the employee cannot be forced into worse service conditions.

54AA(4)

An institution is considered substantially owned by RBI if RBI holds not less than 40% of its capital.

Explanation

For the Unit Trust, “capital” means its initial capital.

Exam number:
👉 Substantially owned = 40% or more

55 and 56

Repealed.

Don’t waste time learning the old substance unless your exam specifically asks historical provisions.

57. Liquidation of the Bank.

57(1)

The Companies Act does not apply to RBI.

RBI cannot be placed into liquidation except:

by order of the Central Government, and
in the manner directed by Central Government.

57(2)

Omitted.

Exam hook:
👉 RBI liquidation = Central Government order.

57A. Powers of Bank not to apply to International Financial Services Centre.

Notwithstanding other laws:

57A(a)

RBI’s powers under the RBI Act do not extend to an International Financial Services Centre established under Section 18(1) of the SEZ Act, 2005.

57A(b)

For regulation of:

financial products,
financial services,
financial institutions

permitted in such IFSCs, the powers are exercised by the International Financial Services Centres Authority (IFSCA) established under the IFSCA Act, 2019.

Simple:
👉 IFSC financial regulation → IFSCA, not RBI.

58. Power of Central Board to make regulations.

58(1)

Central Board may, with previous sanction of Central Government, make regulations:

consistent with RBI Act,
by notification in the Official Gazette,
for matters necessary/convenient to give effect to the Act.

Three things to remember:

Central Board + prior CG sanction + Official Gazette

58(2)

Specific matters for which regulations may be made:

58(2)(a)–(e)

Omitted.

58(2)(f)

Procedure for conducting Central Board business and procedure at its meetings.

58(2)(g)

Conduct of business of Local Boards and delegation of powers/functions to them.

58(2)(h)

Delegation of Central Board powers/functions to:

Deputy Governors,
Directors,
officers of RBI.

58(2)(i)

Formation of Central Board committees, delegation to those committees, and their business procedure.

58(2)(j)

Constitution and management of staff and superannuation funds.

58(2)(k)

Manner/form of executing contracts binding on RBI.

58(2)(l)

Official seal of RBI and manner/effect of its use.

58(2)(m)

Manner/form of RBI balance sheet and maintenance of accounts.

58(2)(n)

Remuneration of RBI Directors.

58(2)(o)

Relations between scheduled banks and RBI + returns submitted by scheduled banks.

58(2)(p)

Regulation of bank clearing-houses, including post-office savings banks.

58(2)(pp)

Regulation of electronic fund transfers:

between banks, or
between banks and specified financial institutions.

Regulations may cover:

participation conditions,
manner of transfer,
rights and obligations of participants.

58(2)(q)

Conditions under which value of lost, stolen, mutilated or imperfect:

Government currency notes, or
banknotes

may be refunded.

58(2)(qa)

Remuneration and allowances of MPC members under Section 45ZD(2).

58(2)(qb)

Functions of MPC Secretary under Section 45ZG(2).

58(2)(qc)

Procedure, manner of meetings and related matters of MPC under Section 45ZI(12).

58(2)(qd)

Particulars and frequency of publication of document under Section 45ZJ(2).

58(2)(qe)

Form and contents of Monetary Policy Report under Section 45ZM(2).

58(2)(r)

Generally, anything necessary for efficient conduct of RBI business.

58(3)

A regulation can have effect from an earlier or later date specified in that regulation.

58(4)

Every regulation must be forwarded to Central Government.

Government places it before each House of Parliament for a total period of 30 days, which may be in:

one session, or
two or more successive sessions.

If both Houses agree to:

modify it → it operates in modified form;
not make it → it has no effect.

However, such modification/annulment does not invalidate things already done under that regulation.

Exam numbers:
👉 Parliamentary laying = 30 days

58(5)

Copies of all regulations made under Section 58 must be made available to the public on payment.

58A. Protection of action taken in good faith.

58A(1)

No suit, prosecution or legal proceeding lies against:

Central Government,
RBI,
any other person

for anything done or intended to be done in good faith under the Act or under an order/regulation/direction made under it.

58A(2)

No suit or legal proceeding lies against Central Government or RBI for damage caused/likely to be caused by anything done or intended in good faith under the Act or related order/regulation/direction.

Keyword:
👉 Good-faith immunity

CHAPTER V — PENALTIES

58B. Penalties.

This is a high-priority exam section. Don’t be lazy here.

58B(1) — False statement / omission

If a person wilfully:

makes a materially false statement knowing it to be false, OR
wilfully omits a material statement,

in an application/declaration/return/statement/information/particulars required under the Act, or in a prospectus/advertisement relating to public deposits:

Punishment:

imprisonment up to 3 years, and
fine.

58B(2) — Failure to furnish information/documents

Failure to:

produce books/accounts/documents,
furnish statements/information/particulars, or
answer questions,

when required under the Act/order/regulation/direction:

Fine: up to ₹1 lakh for each offence.

If continuing:

Additional fine: up to ₹5,000 per day after the first day.

Memory:

₹1 lakh + ₹5,000/day

58B(3) — Contravention of Section 31

Contravention of Section 31 → fine up to the amount of the bill/hundi/promissory note/engagement for payment involved.

58B(4) — Illegal disclosure of credit information

Disclosure of credit information prohibited by Section 45E:

imprisonment up to 6 months, OR
fine up to ₹1,000, OR
both.

58B(4A) — Operating NBFC without required authorisation

Contravention of Section 45-IA(1):

imprisonment not less than 1 year, up to 5 years, AND
fine not less than ₹1 lakh, up to ₹25 lakh.

Very important numbers:
👉 1–5 years + ₹1–25 lakh

58B(4AA) — Auditor’s failure

If an auditor fails to comply with RBI direction/order under Section 45MA:

Fine up to ₹10 lakh.

58B(4AAA) — Failure to comply with Company Law Board order

Failure to comply with an order under 45QA(2):

imprisonment up to 3 years, AND
fine of at least ₹5,000 for every day during continuing non-compliance.

58B(5)

58B(5)(a)

Receiving a deposit:

without being authorised, OR
in contravention of a Chapter IIIB direction/order,

→ imprisonment up to 3 years + fine.

Fine may extend to twice the amount of deposit received.

58B(5)(aa)

Failure to comply with RBI direction/order under Chapter IIIB also attracts the above imprisonment/fine framework.

58B(5)(b)

Issuing a prospectus/advertisement contrary to Section 45J or order under 45J:

imprisonment up to 3 years
fine up to twice the amount of deposit called for by that prospectus/advertisement.

Distinguish:

(a) → twice deposit actually received
(b) → twice deposit called for

58B(5A) — Contravention of Section 45S

Contravention of 45S:

imprisonment up to 2 years, OR
fine up to:
- twice amount of deposit received, or
- ₹2,000,
  whichever is more, OR
both.

Proviso

Unless court records special and adequate reasons otherwise:

imprisonment cannot be less than 1 year
fine cannot be less than ₹1,000.

58B(5B)

Despite Section 29 CrPC, a:

Metropolitan Magistrate, or
Judicial Magistrate First Class

may impose a fine above the normal limit specified in that section for a conviction under 58B(5A).

58B(6) — Other contraventions

Contravention/default under any other provision of the RBI Act, or of:

order,
regulation,
direction,
condition

→ fine up to ₹1 lakh.

If continuing:

→ additional fine up to ₹10,000 per day after the first day.

Memory:
👉 General = ₹1 lakh + ₹10,000/day

58C. Offences by companies.

58C(1)

If a company commits a contravention/default under 58B:

Both are deemed guilty:

the company; and
every person who, at the time, was in charge of and responsible for conduct of the company’s business.

Proviso

Such person escapes punishment if he proves:

contravention happened without his knowledge, OR
he exercised all due diligence to prevent it.

58C(2)

Even beyond 58C(1), if offence occurred with:

consent,
connivance, or
attributable neglect

of a:

director,
manager,
secretary,
other officer,
employee,

that person is also deemed guilty.

Explanation 1

For this section, an offence is deemed committed where the company’s:

registered office, or
principal place of business

is situated in India.

Explanation 2(a) — “Company”

Company means any body corporate and includes:

corporation,
non-banking institution,
firm,
co-operative society,
other association of individuals.

Explanation 2(b) — “Director”

For a firm, “director” means a partner.

58D. Application of Section 58B barred.

Section 58B does not apply to matters dealt with under Section 42.

Exam trap:
👉 Section 42 matters are carved out of 58B.

58E. Cognizance of offences.

58E(1)

No court can take cognizance of an offence under RBI Act unless there is a written complaint by an RBI officer authorised in writing by RBI.

Only these courts or higher courts can try such offences:

Metropolitan Magistrate,
Judicial Magistrate First Class,
superior court.

Proviso

For an offence under 58B(5A), written complaint may also be made by an officer of the State Government authorised in writing by that Government.

58E(2)

Despite CrPC, Magistrate may dispense with the personal attendance of the RBI officer who filed the complaint.

But Magistrate may later require personal attendance at any stage.

58F. Application of fine.

A court imposing a fine under the Act may direct that all or part of it be used towards costs of proceedings.

58G. Power of Bank to impose fine.

This is different from 58B.

58B = statutory criminal penalties.
58G = RBI’s own power to impose monetary penalty on NBFC.

58G(1)

If an NBFC commits a contravention/default referred to in 58B, RBI may impose:

58G(1)(a)

Penalty up to ₹25,000.

58G(1)(b)

For violation under:

58B(4A), or
58B(5)(a), or
58B(5)(aa),

penalty up to:

₹10 lakh, OR
twice the amount involved, where quantifiable,

whichever is more.

For continuing contravention:

→ further penalty up to ₹1 lakh per day after the first day.

58G(2)

Before imposing penalty, RBI must:

serve notice on NBFC asking why penalty should not be imposed;
give NBFC a reasonable opportunity of being heard.

58G(3)

Penalty must be paid within 30 days from service of demand notice.

If NBFC doesn’t pay, it may be recovered through the principal civil court having jurisdiction over the area where NBFC’s:

registered office, or
head office

is situated.

Proviso:
Such court action requires an application by an authorised RBI officer.

58G(4)

The court issues a certificate stating the amount payable.

The certificate is enforceable like a civil-suit decree.

58G(5)

If RBI has imposed a penalty under 58G, no court complaint can be filed against the NBFC for that same contravention/default.

58G(6)

Conversely, if a court complaint has already been filed regarding the contravention/default, RBI cannot initiate penalty proceedings under 58G for the same matter.

Core principle:
👉 No double-track punishment for the same contravention.

59 to 61

Repealed.

The PDF records Sections 59–61 as repealed by the Act of 1937.

SCHEDULES

FIRST SCHEDULE

Areas served by various Local Boards

The First Schedule divides India into four Local Board areas:

1. Western Area

Includes:

Goa
Gujarat
Madhya Pradesh
Maharashtra
Dadra and Nagar Haveli
Daman and Diu.

2. Eastern Area

Includes:

Arunachal Pradesh
Assam
Bihar
Manipur
Meghalaya
Mizoram
Nagaland
Odisha
Sikkim
Tripura
West Bengal
Andaman & Nicobar Islands.

3. Northern Area

Includes:

Jammu & Kashmir
Punjab
Haryana
Himachal Pradesh
Rajasthan
Uttar Pradesh
Chandigarh
Delhi.

4. Southern Area

Includes:

Andhra Pradesh
Karnataka
Tamil Nadu
Kerala
Puducherry
Lakshadweep.

For your exam:
The First Schedule = Local Board geographical areas.

SECOND SCHEDULE

Scheduled Banks

This Schedule contains the list of Scheduled Banks referred to in Sections 42 and 2(e).

The PDF then lists the scheduled banks alphabetically, beginning with:

AB Bank Ltd.
Abhyudaya Co-operative Bank
Abu Dhabi Commercial Bank
Ahmedabad Mercantile Co-operative Bank
Airtel Payments Bank
American Express Banking Corporation
Axis Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
HDFC Bank
ICICI Bank
IDBI Bank
IDFC FIRST Bank
Indian Bank
Indian Overseas Bank
Kotak Mahindra Bank
Punjab National Bank
State Bank of India
Union Bank of India
YES Bank
etc.

The Schedule continues through the remaining listed scheduled banks to YES Bank and Zoroastrian Co-operative Bank.

Exam takeaway

Don’t try to memorise the entire alphabetical list unless your specific promotion-exam material demands it.

What matters conceptually:

Second Schedule → Scheduled Banks → Section 42 CRR framework.

THIRD SCHEDULE

Repealed by the RBI Amendment Act, 1955, effective 1 July 1955.

FOURTH SCHEDULE

Repealed by the RBI Amendment Act, 1948, effective 1 January 1949.

FIFTH SCHEDULE

Repealed by the M.O. 1937.

🔥 FINAL RBI ACT — LAST-MINUTE REVISION TABLE

Provision	Must remember
53(1)	Weekly Issue + Banking Department accounts
53(2)	Annual accounts → CG within 2 months
54	Rural credit/development expert staff
54A	Governor can delegate to Deputy Governor
54AA(4)	Substantially owned = ≥40% RBI capital
57	RBI liquidation only by Central Government order
57A	IFSC financial regulation → IFSCA
58(1)	Central Board regulations + prior CG sanction
58(4)	Parliament laying = 30 days
58A	Good-faith protection
58B(1)	False material statement → up to 3 years + fine
58B(2)	Failure to furnish info → ₹1 lakh + ₹5,000/day
58B(4)	Credit-info disclosure → 6 months / ₹1,000 / both
58B(4A)	45-IA(1) violation → 1–5 years + ₹1–25 lakh
58B(4AA)	Auditor violation → ₹10 lakh
58B(4AAA)	45QA order violation → 3 years + ₹5,000/day minimum
58B(5A)	45S violation → up to 2 years
58B(6)	Other violation → ₹1 lakh + ₹10,000/day
58C	Company + responsible persons liable
58D	58B doesn’t apply to Section 42 matters
58E	Cognizance requires written authorised complaint
58F	Fine can be used toward proceeding costs
58G	RBI can impose penalty on NBFC
58G(1)(a)	Up to ₹25,000
58G(1)(b)	Up to ₹10 lakh / 2× amount, whichever higher
58G continuing	Up to ₹1 lakh/day
58G(3)	Payment within 30 days
First Schedule	Local Board areas
Second Schedule	Scheduled Banks
Third–Fifth	Repealed

The numbers you absolutely cannot miss

40% → 54AA
2 months → 53(2)
30 days → 58G(3)
₹1 lakh + ₹5,000/day → 58B(2)
₹1 lakh + ₹10,000/day → 58B(6)
1–5 years + ₹1–25 lakh → 58B(4A)
₹10 lakh → auditor under 58B(4AA)
₹25,000 → 58G(1)(a)
₹10 lakh / 2× → 58G(1)(b)
₹1 lakh/day → continuing 58G

That completes the RBI Act, 1934 provisions, including the Schedules.