Banking Regulation Act, 1949 · Section guide
Section 44B: Restriction on compromise or arrangement between banking company and creditors
Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026
Section 44B — Restriction on compromise or arrangement between banking company and creditors. Restricts court sanction of compromise/arrangement involving a banking company unless the statutory RBI certification/conditions are satisfied; depositor interests are a central gate.
Official statute linkedProvision-specific anatomyPractical case + evidence file
Statutory structure and provision map
This map is a provision-specific explanation, not a substitute for the exact statutory text.
Core statutory rule
Restricts court sanction of compromise/arrangement involving a banking company unless the statutory RBI certification/conditions are satisfied.
Condition / limitation
depositor interests are a central gate.
Source and effective-date control
Apply the wording of Section 44B 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 court sanction, RBI certification and the depositor-protection tests for compromise/arrangement.
Working flow
Identify the bank/entity class, event date and the factual trigger for Restriction on compromise or arrangement between banking company and creditors.
Apply the core Section 44B rule: Restricts court sanction of compromise/arrangement involving a banking company unless the statutory RBI certification/conditions are satisfied.
Test the next condition or limitation: depositor interests are a central gate.
Reconcile any amount, period, approval, filing or return mentioned in Section 44B 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 44B evidence: High Court/Central Government/RBI order initiating the process.
- Section 44B evidence: liquidator/scheme records and creditor/debtor lists.
- Section 44B evidence: service/publication and statutory-timeline evidence.
- Section 44B 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 44B, avoid applying ordinary Companies Act procedure without the banking-specific override.
- For Section 44B, avoid missing the special limitation or accelerated filing period.
- For Section 44B, avoid treating a private scheme as effective before the statutory sanction/order.
Related sections inside the Act
Use these links to read Section 44B 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 44B 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 44B 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.