of the Banking Regulation Act; 1949 (10 of 1949); or any other financial institu — THE RESERVE BANK OF INDIA ACT, 1934

of the Banking Regulation Act; 1949 (10 of 1949); or any other financial institu

section 5 of the Banking Regulation Act; 1949 (10 of 1949); or any other financial institution notified by the Central Government in, this behalf, shall be reduced by the aggregate of the liabilities of all such banks and institutions to the State co operative bank:] (IA) Notwithstanding anything contained in sub-section (7), the Bank may, by notification in the Gazette of India, direct that every scheduled bank shall, with effect from such date as may be specified in the notification, maintain with the Bank, in addition to the balance prescribed by O under sub-section (1), an additional average daily balance the amount of which shall not be less than the H[rate specified in the notification, such additional balance being calculated with reference to the excess of the total of the demand and time liabilities of the bank aS shown in the return referred to in sub-section (2) over the total of its demand and time liabilities] at the close of business on the date specified in the notification as shown by such return so however, that the additional balance shall, in no case, be more than such excess: '[Provided that the Bank may, by a separate notification in the Gazette of India, specify different dates in respect of a Bank subsequently included in the Second Schedule]: 4* I[1C) The Bank may, for the purposes of this section, specify from time to time with reference to any transaction or class of transactions that such transaction Or transactions shall be regarded as liability in India of a scheduled bank, and if any question arises as to whether any transaction or class of transactions shall be regarded, for the purposes f this section, as liability in India of a scheduled bank, the decision of the Bank thereon shall be final:] 5[(2) Every scheduled bank shall send to the Bank a return signed by two responsible officers of such bank showing the amount of its demand and time liabilities and the amount of its borrowings from banks in India, '[classifying them into demand and time liabilities], 1. Ins. by Act of 1984,s_ 6 (w.e.f. 29-3-1985). 2. Subs. by Act 35 of 1962, $. 3, for certain words (W.e.f: 15-9-1962) 3 Added by Act 1 of 1984, s_ 6 (w.e.f: 29-3-1985)_ 4. Sub-sections (IAA) and (1B) omitted by Act 26 of 2006, s. 3 (w.e.f: 1-4-2007)_ 5. Subs. by Act 32 of 1951, 16, for sub-section (2) (w.e.f: 1-11-1951). 6. Subs by Act 51 of 1974, 11, for "other than the State Bank and any other bank notified by the Central Government in this behalf' (w.e.f: 13-12-1974). 31 the total amount of legal tender notes and coins held by it in India, the balance held by it at the Bank in India, the balances held by it at other banks in current account and the money at call and short notice in India, the investments (at book value) in Central and State Government securities including treasury bills and treasury deposit receipts, the amount of advances in India; the inland bills purchased and discounted in India [and foreign bills purchased and discounted]: '[at the close of business on each alternate Friday, and every such return shall be sent not later than seven days after the date to which it relates]: [Provided that the Bank may, by notification in the Gazette of India, delete O modify O add to any of the particulars specified in the foregoing clauses: Provided further that] where 5 [such alternate] Friday is public holiday under the Negotiable Instruments Act; 1881 (26 of 1881), for one or more offices of a scheduled bank the return shall give the preceding working day's figures in respect of such office O offices, but shall nevertheless be deemed to relate to that Friday: '[Provided also that where the Bank is satisfied that the furnishing of a fortnightly return under this sub-section is impracticable in the case of any scheduled bank by reason of the geographical position of the bank and its branches, the Bank may allow such bank to furnish a provisional return for the fortnight within the period aforesaid to be followed by a final return not later than twenty days after the date to which it relates, O (ii) to furnish in lieu of a fortnightly return monthly return to be sent not later than twenty days after the end of the month to which it relates giving the details specified in this sub-section in respect of such bank at the close of business for the month:]] S[(2A) Where the last Friday of a month is not an alternate Friday for the purpose of sub-section(2), every scheduled bank shall send to the Bank; special return giving the details specified in sub-section (2) as at the close of business 0 such last Friday Or where such last Friday is a public holiday under the Negotiable Instruments Act; 1881 (26 of 1881), as at the close of business on the preceding working day and such return shall be sent not later than seven days after the date to which it relates.] 7[(3) If the average daily balance held at the Bank by a scheduled bank during any [fortnight] is below the minimum prescribed by O under sub-section (Z) or sub-section (1A), such scheduled bank shall be liable to pay to the Bank in respect of that S[fortnight] penal interest at a rate of three per cent. above the bank rate on the amount by which such balance with the Bank falls short of the prescribed minimum_ and if during the next succeeding S[fortnight], such average daily balance is still below the prescribed minimum; the rates of penal interest shall be increased to a rate of five per cent; above the bank rate in respect of that S[fortnight] and each subsequent S[fortnight] during which the default continues on the amount by which such balance at the Bank falls short of the prescribed minimum:] Clause (aa) omitted by Act 51 of 1974 11 (w.e.f: 13-12-1974). Earlier inserted by Act 54 of 1953, s. 6 (W.e.f: 30-12-1953)_ 2. Ins. by Act 54 of 1953 s. 6 (w.e.f. 30-12-1953) 3 . Subs. by Act of 1984,s. 6, for at the close of business 0n each Friday, and every such return shall be sent not later than five days after the date to which it relates (w.e.f. 29-3-1985). 4. Subs. by Act 51 of 1974,s. 11, for Provided that" (W.e.f. 13-12-1974) 5. Ins. by Act of 1984, s_ 6 (w.e.f: 29-3-1985). 6. Subs. by s. 6, ibid , for the third proviso (W.e.f: 29-3-1985). 7. Subs. by Act 38 of 1956, s. 5,for sub-

Section Section 5