Section 23: Restrictions on opening new and transfer of existing places of business

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 23 — Restrictions on opening new and transfer of existing places of business. Requires prior RBI permission for opening a new place of business in India or shifting an existing place outside the same city/town/village, subject to statutory exceptions; branch authorisation directions operationalise the permission framework.

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

Requires prior RBI permission for opening a new place of business in India or shifting an existing place outside the same city/town/village, subject to statutory exceptions.

Condition / limitation

branch authorisation directions operationalise the permission framework.

Source and effective-date control

Apply the wording of Section 23 that was in force on the event date; use the official Act and any applicable commencement/amending instrument linked on this page.

Professional application

Distinguish permission triggers, local transfers, temporary facilities and foreign-bank rules; connect to the correct bank-class direction and annexures.

Evidence / working-paper checklist

Section 23 evidence: licence/permission application and annexures.
Section 23 evidence: RBI approval, condition or acknowledgement.
Section 23 evidence: board/business plan and capital/governance evidence.
Section 23 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 23, avoid starting banking/branch activity before the legal permission is effective.
For Section 23, avoid treating a general permission as unlimited.
For Section 23, avoid failing to retain approval conditions and post-opening evidence.

Linked Rules, RBI directions, notifications and forms

Banking Regulation (Companies) Rules, 1949
Relevance: check this instrument’s own scope where Section 23 concerns restrictions on opening new and transfer of existing places of business.
RBI Branch Authorisation framework
Relevance: check this instrument’s own scope where Section 23 concerns restrictions on opening new and transfer of existing places of business.
RBI Commercial Banks — 2025 thematic Master Directions index
Relevance: check this instrument’s own scope where Section 23 concerns restrictions on opening new and transfer of existing places of business.

Linked instruments keep their own legal basis; they are not attributed to Section 23 unless the official instrument says so.

Related sections inside the Act

Use these links to read Section 23 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 23 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 23 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.