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Home › Indian Laws › Banking Regulation Act, 1949 › Section 36AE
Banking Regulation Act, 1949 · Section guide

Section 36AE: Central Government power to acquire undertakings of banking companies in certain cases

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 36AE — Central Government power to acquire undertakings of banking companies in certain cases. Allows the Central Government, after the statutory RBI report/recommendation. And satisfaction, to acquire the undertaking of a banking company where continued control is necessary in the stated public/depositor/banking-policy circumstances.

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, after the statutory RBI report/recommendation and satisfaction, to acquire the undertaking of a banking company where continued control is necessary in the stated public/depositor/banking-policy circumstances.

Condition / limitation

How to read the provisionSection 36AE: read the operative proposition with its defined terms and cross-references in the official Act.

Timing / amount / process

Boundary of the ruleDo not expand Section 36AE by analogy; distinguish statutory text from stricter policy or later RBI requirements.

Professional application

Map acquisition grounds, RBI report, opportunity to be heard and vesting consequences.

Evidence / working-paper checklist

  • Section 36AE evidence: RBI/Central Government order or scheme.
  • Section 36AE evidence: service/hearing record and reasons.
  • Section 36AE evidence: board/management handover or acquisition documents.
  • Section 36AE evidence: consequential appointment, compensation or tribunal records.

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

Common mistakes to avoid

  • For Section 36AE, avoid treating an intervention power as an ordinary governance power.
  • For Section 36AE, avoid missing the opportunity/hearing or service step specified by the Act.
  • For Section 36AE, avoid failing to implement the consequential disqualification/vesting/management effects.

Related sections inside the Act

Section 36AF — Central Government power to make schemeSection 36AG — Compensation to shareholders of acquired bankSection 36AH — Constitution of TribunalSection 36ACA — Supersession of Board of Directors in certain casesSection 36AD — Punishments for certain activities in relation to banking companies

Use these links to read Section 36AE 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 36AE 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 36AE 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.