Section 36AG: Compensation to shareholders of acquired bank

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 36AG — Compensation to shareholders of acquired bank. Provides the compensation framework for shareholders of an acquired bank by reference to statutory principles. And the Fifth Schedule; disputes move through the Tribunal mechanism rather than ordinary valuation negotiation.

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

Provides the compensation framework for shareholders of an acquired bank by reference to statutory principles and the Fifth Schedule.

Condition / limitation

disputes move through the Tribunal mechanism rather than ordinary valuation negotiation.

Source and effective-date control

Apply the wording of Section 36AG that was in force on the event date; use the official Act and any applicable commencement/amending instrument linked on this page.

Professional application

Set out compensation determination, objection/reference process and deadlines; connect to a complete Fifth Schedule example.

Evidence / working-paper checklist

Section 36AG evidence: RBI/Central Government order or scheme.
Section 36AG evidence: service/hearing record and reasons.
Section 36AG evidence: board/management handover or acquisition documents.
Section 36AG 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 36AG, avoid treating an intervention power as an ordinary governance power.
For Section 36AG, avoid missing the opportunity/hearing or service step specified by the Act.
For Section 36AG, avoid failing to implement the consequential disqualification/vesting/management effects.

Related sections inside the Act

Use these links to read Section 36AG 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 36AG 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 36AG on the event date.

Professional reading note

Professional reading note — Section 36AG should be applied as a sequence, not as an isolated heading. Start with the factual trigger

for compensation to shareholders of acquired bank, then test the operative proposition: Provides the compensation framework for shareholders of an acquired bank

by reference to statutory principles and the Fifth Schedule. Next confirm the limiting or interaction point: disputes move through the Tribunal mechanism

rather than ordinary valuation negotiation. 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

36AG evidence: RBI/Central Government order or scheme and Section 36AG evidence: service/hearing record and reasons. Read the provision in sequence with Section

36AE — Central Government power to acquire undertakings of banking companies in certain cases and Section 36AF — Central Government power to

make scheme. 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.

Primary official sources

Department of Financial Services — consolidated Banking Regulation Act, 1949

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.