Banking Regulation Act, 1949 · Section guide
Section 21A: Rates of interest charged by banking companies not subject to court scrutiny
Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026
Section 21A — Rates of interest charged by banking companies not subject to court scrutiny. Prevents courts from reopening a bank–debtor transaction merely because. The interest rate charged is alleged to be excessive; it does not immunise separate illegality, fraud, contractual breach or violation of an RBI direction.
Official statute linkedProvision-specific anatomyPractical case + evidence file
Statutory structure and provision map
This map is a provision-specific explanation, not a substitute for the exact statutory text.
Core statutory rule
Prevents courts from reopening a bank–debtor transaction merely because the interest rate charged is alleged to be excessive.
Condition / limitation
it does not immunise separate illegality, fraud, contractual breach or violation of an RBI direction.
Source and effective-date control
Apply the wording of Section 21A that was in force on the event date; use the official Act and any applicable commencement/amending instrument linked on this page.
Professional application
Explain the precise bar on interest-rate challenges and its limits, supported by verified judicial authority.
Evidence / working-paper checklist
- Section 21A evidence: borrower and connected-party declarations.
- Section 21A evidence: sanction note and security/interest documentation.
- Section 21A evidence: board/RBI approval where the provision requires it.
- Section 21A evidence: credit-policy mapping to any RBI direction issued under sections 21/35A.
Retain the event date and source version with the file so the conclusion remains reproducible after later amendments.
Common mistakes to avoid
- For Section 21A, avoid testing only the borrower name and not the prohibited relationship or interest.
- For Section 21A, avoid confusing an RBI policy direction with a discretionary internal credit policy.
- For Section 21A, avoid remitting/restructuring an exposure without checking statutory board/RBI restrictions.
Related sections inside the Act
Use these links to read Section 21A in its statutory sequence, especially where the provision imports definitions, approvals, appeals, penalties or winding-up consequences from neighbouring sections.
Current-law source control
Source control: Section 21A is anchored to the official DFS consolidated text; later changes require separate Gazette verification.
Dated matters: verify any later Gazette, RBI direction or binding judgment affecting Section 21A on the event date.
Primary official sources
Disclaimer
This Finin2min page is an educational and professional reference. Banking regulation is fact-, entity- and date-sensitive. Verify the current Act, Gazette amendments and commencement notifications, applicable RBI Rules/directions and the transaction record before acting or filing.