Power To Suspend Operation Of Act

The Banking Regulation Act, 1949 was earlier called the banking companies act, 1949 until 1 March 1966. From 1 March 1966, the Act is taking care of the whole banking segment of the country. Since 1956, the Act has been relevant to Jammu and Kashmir too. The Act gives a particular framework for commercial banking under whose supervision the working of the banks takes place. The Banking Regulation Act, 1949 provides the Reserve Bank of India the authority to licence banks, regulate shareholding and engage with shareholder voting rights, supervise and manage the board appointments, and beyond.

Banking Regulation Act, 1949

The Act plays a crucial role in controlling, managing, and supervising the banks. Along with other powers, it also gives RBI the power to manage the operation of banks, provide audit instructions, control liquidation, impose penalties, and issue guidelines for the benefit of citizens. The Act was passed to ensure the smooth functioning of the banks by providing the needed capital, decreasing competition among the whole banking sector, protecting the rights of the public, appointing bank officials transparently, to ensure if the fresh branches are licensed, to assist banks in liquidating in times of need, to impose necessary restrictions on the Investors in India, and to take important steps to make the banking sector more strong in India.

Power to suspect operation of Act

Under the Power to suspend operation of Act, the following laws are considered and implemented. The terms of Power to suspend operation of Act are to the point and are strictly followed by the government and the officials. 

(1) If representation made by the Reserve Bank on this behalf is satisfied that it is expedient to do so, the Central Government may suspend the officials for a period, not more than sixty days, which is notified in the notification. Any or all the provisions under this Act are generally concerning any particular banking company. 

(2) The Reserve Bank of India Governor, in any emergency or in his absence, a Deputy Governor is nominated by him on this behalf, by written order, or by exercising the powers of the Central Government under the law that the suspension period should not be more than 30 days. Whether it is the Governor or the Deputy Governor, he has to report the matter to the Central Government, and the order should be published in the Gazette of India.

(3) The Central Government might extend from time to time the period of any suspension ordered under any specific subsection for that particular period, not more than sixty days at one time. The total period is not more than one year.

 (4) A fresh notification issued under any subsection should be put on the table as soon as it is issued.

Conclusion

Section 4 of the Banking Regulation Act, 1947,“  Power to suspend operation of Act”, is of utmost importance for multiple reasons. The terms of Power to suspend operation of an Act must be followed by every institution it is concerning.