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Home › Indian Laws › Banking Regulation Act, 1949 › Section 22
Banking Regulation Act, 1949 · Section guide

Section 22: Licensing of banking companies

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 22 — Licensing of banking companies. Prohibits a company from carrying on banking business in India without an RBI licence and sets conditions. RBI considers before grant/continuation; refusal/cancellation and hearing/appeal consequences must be handled under the section and applicable Rules.

Official statute linkedProvision-specific anatomyPractical case + evidence file
Official text: DFS consolidated Act

Statutory structure and provision map

This map is a provision-specific explanation, not a substitute for the exact statutory text.

Core statutory rule

Prohibits a company from carrying on banking business in India without an RBI licence and sets conditions RBI considers before grant/continuation.

Condition / limitation

refusal/cancellation and hearing/appeal consequences must be handled under the section and applicable Rules.

Source and effective-date control

Apply the wording of Section 22 that was in force on the event date; use the official Act and any applicable commencement/amending instrument linked on this page.

Professional application

licensing criteria, grant/refusal/cancellation grounds, hearing and appeal procedure and foreign-bank conditions.

Evidence / working-paper checklist

  • Section 22 evidence: licence/permission application and annexures.
  • Section 22 evidence: RBI approval, condition or acknowledgement.
  • Section 22 evidence: board/business plan and capital/governance evidence.
  • Section 22 evidence: commencement/opening/relocation date and post-event reporting.

Retain the event date and source version with the file so the conclusion remains reproducible after later amendments.

Common mistakes to avoid

  • For Section 22, avoid starting banking/branch activity before the legal permission is effective.
  • For Section 22, avoid treating a general permission as unlimited.
  • For Section 22, avoid failing to retain approval conditions and post-opening evidence.

Related sections inside the Act

Section 23 — Restrictions on opening new and transfer of existing places of businessSection 35 — InspectionSection 35A — Power of the Reserve Bank to give directionsSection 21 — Power of Reserve Bank to control advances by banking companiesSection 21A — Rates of interest charged by banking companies not subject to court scrutinySection 24 — Maintenance of a percentage of assets

Use these links to read Section 22 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 22 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 22 on the event date.

Professional reading note

Professional reading note — Section 22 should be applied as a sequence, not as an isolated heading. Start with the factual trigger

for licensing of banking companies, then test the operative proposition: Prohibits a company from carrying on banking business in India without an

RBI licence and sets conditions RBI considers before grant/continuation. Next confirm the limiting or interaction point: refusal/cancellation and hearing/appeal consequences must be

handled under the section and applicable Rules. The working file should be capable of showing why the section applies to the relevant

bank or person, which statutory version governs the event date, and which documentary record proves the conclusion. Useful evidence on this page

includes Section 22 evidence: licence/permission application and annexures and Section 22 evidence: RBI approval, condition or acknowledgement. Read the provision in sequence

with Section 23 — Restrictions on opening new and transfer of existing places of business and Section 35 — Inspection. This method

keeps the legal answer tied to the provision itself while allowing RBI directions, rules and later instruments to be layered on only

where their own scope actually applies.

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.