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Banking Regulation Act, 1949 · Section guide

Section 5: Interpretation

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 5 — Interpretation. Defines expressions used throughout the Act, including banking, banking company and substantial interest; from 1 August 2025 the company-side substantial-interest. Monetary limb uses ₹2 crore or such other amount as may be notified by the Central Government.

Official statute linkedProvision-specific anatomyPractical case + evidence file2025 amendment mapped
Official text: DFS consolidated Act · Banking Laws (Amendment) Act, 2025
Effective-date control — 1 August 2025. “substantial interest” monetary limb revised to ₹2 crore or notified amount. For an event that straddles this date, the working paper should show the pre/post amendment position rather than treating the current wording as historically universal.

Statutory structure and provision map

This map is a provision-specific explanation, not a substitute for the exact statutory text.

Core statutory rule

Defines expressions used throughout the Act, including banking, banking company and substantial interest.

Condition / limitation

from 1 August 2025 the company-side substantial-interest monetary limb uses ₹2 crore or such other amount as may be notified by the Central Government.

Source and effective-date control

Apply the wording of Section 5 that was in force on the event date; use the official Act and any applicable commencement/amending instrument linked on this page.

Professional application

a searchable complete definitions table, including banking and the full substantial-interest test; do not reduce the amended company limb to a standalone ₹2 crore threshold.

Evidence / working-paper checklist

  • Section 5 evidence: entity constitution/classification records.
  • Section 5 evidence: the event date and applicable statutory version.
  • Section 5 evidence: the other law said to apply alongside or override this Act.
  • Section 5 evidence: the Gazette/notification relied on for any suspension or commencement point.

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

Common mistakes to avoid

  • For Section 5, avoid assuming that RBI regulation automatically displaces another statute.
  • For Section 5, avoid using a current definition for an event governed by older wording.
  • For Section 5, avoid treating a notification-based exception as permanent or entity-wide without reading its conditions.

Linked Rules, RBI directions, notifications and forms

Linked instruments keep their own legal basis; they are not attributed to Section 5 unless the official instrument says so.

Related sections inside the Act

Section 3 — Act not to apply to certain co-operative societiesSection 5A — Act to override memorandum, articles, etc.Section 6 — Forms of business in which banking companies may engageSection 51 — Application of certain provisions to SBI and other notified banksSection 56 — Act to apply to co-operative societies subject to modificationsSection 4 — Power to suspend operation of Act

Use these links to read Section 5 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: read Section 5 in the DFS/India Code text together with the mapped 2025 amending Act and commencement date.

Dated matters: verify any later Gazette, RBI direction or binding judgment affecting Section 5 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.