Skip to main content
Home › Indian Laws › Banking Regulation Act, 1949 › Section 35AA
Banking Regulation Act, 1949 · Section guide

Section 35AA: Central Government authorisation for RBI directions to initiate insolvency resolution

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 35AA — Central Government authorisation for RBI directions to initiate insolvency resolution. Allows the Central Government to authorise RBI to direct one or more banking companies to initiate IBC insolvency resolution for a specified default; “default” imports the IBC definition, so the authorisation order and IBC record. Are essential.

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

Allows the Central Government to authorise RBI to direct one or more banking companies to initiate IBC insolvency resolution for a specified default.

Condition / limitation

“default” imports the IBC definition, so the authorisation order and IBC record are essential.

Source and effective-date control

Apply the wording of Section 35AA 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 Central Government authorisation and specific-default insolvency directions; add verified judicial interpretation.

Evidence / working-paper checklist

  • Section 35AA evidence: RBI notice/direction/inspection requisition.
  • Section 35AA evidence: books, returns and source data supplied to RBI.
  • Section 35AA evidence: management response and remediation evidence.
  • Section 35AA evidence: effective-date mapping for every operative paragraph of the RBI instrument.

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

Common mistakes to avoid

  • For Section 35AA, avoid treating an RBI direction as advisory.
  • For Section 35AA, avoid answering an inspection request from summary data that cannot be reconciled to books.
  • For Section 35AA, avoid implementing a circular without checking applicability, effective date and supersession.

Related sections inside the Act

Section 35AB — RBI directions in respect of stressed assetsSection 45 — RBI application for moratorium and scheme of reconstruction or amalgamationSection 35 — InspectionSection 35A — Power of the Reserve Bank to give directionsSection 35B — Appointments of managing directors, etc. subject to previous RBI approval

Use these links to read Section 35AA 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 35AA 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 35AA on the event date.

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.