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Banking Regulation Act, 1949 · Section guide

Section 38: Winding up by High Court

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 38 — Winding up by High Court. Sets special grounds on which the High Court shall or may order winding up of a banking company, including inability to meet requirements and RBI applications; this is a banking-specific winding-up gateway.

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

Sets special grounds on which the High Court shall or may order winding up of a banking company, including inability to meet requirements and RBI applications.

Condition / limitation

this is a banking-specific winding-up gateway.

Source and effective-date control

Apply the wording of Section 38 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 winding-up grounds, RBI applications and deemed-inability conditions with timelines.

Working flow

Identify the bank/entity class, event date and the factual trigger for Winding up by High Court.
Apply the core Section 38 rule: Sets special grounds on which the High Court shall or may order winding up of a banking company, including inability to meet requirements and RBI applications.
Test the next condition or limitation: this is a banking-specific winding-up gateway.
Reconcile any amount, period, approval, filing or return mentioned in Section 38 with the supporting record.
Record the conclusion, official source used, effective date and evidence that proves the statutory condition was met or not met.

Evidence / working-paper checklist

  • Section 38 evidence: High Court/Central Government/RBI order initiating the process.
  • Section 38 evidence: liquidator/scheme records and creditor/debtor lists.
  • Section 38 evidence: service/publication and statutory-timeline evidence.
  • Section 38 evidence: orders settling claims, calls, transfers, moratorium or amalgamation.

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

Common mistakes to avoid

  • For Section 38, avoid applying ordinary Companies Act procedure without the banking-specific override.
  • For Section 38, avoid missing the special limitation or accelerated filing period.
  • For Section 38, avoid treating a private scheme as effective before the statutory sanction/order.

Current-law source control

Source control: Section 38 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 38 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.