Chapter IV — General Provisions

Section 46: Contribution by Central Government to the Reserve Fund

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 46 requires the Central Government to transfer rupee securities valued at five crore rupees to RBI for allocation to the Reserve Fund.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 46 in 2 minutes

Legal effectSection 46 requires the Central Government to transfer rupee securities valued at five crore rupees to RBI for allocation to the Reserve Fund.

Operative ruleThe provision establishes the original statutory reserve contribution and should be distinguished from RBI's paid-up capital under Section 4 and annual surplus allocation under Section 47.

Connected lawIt is an institutional balance-sheet provision, not a reserve ratio imposed on regulated banks.

File evidenceFinancial-history analysis should separately present statutory capital, Reserve Fund and current reserves/provisions in RBI's accounts.

Statutory structure and clause / subsection decode

This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.

Scope

Section 46 requires the Central Government to transfer rupee securities valued at five crore rupees to RBI for allocation to the Reserve Fund.

Operative limb

The provision establishes the original statutory reserve contribution and should be distinguished from RBI's paid-up capital under Section 4 and annual surplus allocation under Section 47.

Legal boundary

It is an institutional balance-sheet provision, not a reserve ratio imposed on regulated banks.

Worked practical example

Facts. An analyst should not describe the Section 46 Reserve Fund as the same thing as a scheduled bank's CRR balance under Section 42.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 46 and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. It is an institutional balance-sheet provision, not a reserve ratio imposed on regulated banks.
Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.

Connected provisions and instruments

Section 46 has no universal instrument dependency in this package. Add an RBI circular or direction only when its subject, entity and effective date cover the issue being analysed.

Questions and answers

What is the purpose of Section 46?

Contribution by Central Government to the Reserve Fund: Section 46 requires the Central Government to transfer rupee securities valued at five crore rupees to RBI for allocation to the Reserve Fund.

Which statutory limb should be checked first?

Scope - Section 46 requires the Central Government to transfer rupee securities valued at five crore rupees to RBI for allocation to the Reserve Fund.

What is the next legal boundary?

Operative limb - The provision establishes the original statutory reserve contribution and should be distinguished from RBI's paid-up capital under Section 4 and annual surplus allocation under Section 47.

What record should support the conclusion?

Section 46 file evidence: Financial-history analysis should separately present statutory capital, Reserve Fund and current reserves/provisions in RBI's accounts.

Primary sources

Source control for Section 46: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.