Chapter IV — General Provisions

Section 57: Liquidation of the Bank

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 57 provides that RBI cannot be placed in liquidation except by order of the Central Government and in the manner the Government directs; ordinary company-liquidation law does not apply in the usual way.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 57 in 2 minutes

Legal effectSection 57 provides that RBI cannot be placed in liquidation except by order of the Central Government and in the manner the Government directs; ordinary company-liquidation law does not apply in the usual way.

Operative ruleThe section reflects RBI's special statutory status as the central bank.

Connected lawIt does not provide a creditor with an ordinary insolvency petition route against RBI.

File evidenceAny hypothetical liquidation analysis must begin with the Central Government order requirement and the special statutory process.

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

Operative limb

The section reflects RBI's special statutory status as the central bank.

Legal boundary

It does not provide a creditor with an ordinary insolvency petition route against RBI.

Worked practical example

Facts. A creditor cannot file an ordinary company winding-up petition against RBI as though it were a Companies Act company.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 57 and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. It does not provide a creditor with an ordinary insolvency petition route against RBI.
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Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.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 57 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 57?

Liquidation of the Bank: Section 57 provides that RBI cannot be placed in liquidation except by order of the Central Government and in the manner the Government directs; ordinary company-liquidation law does not apply in the usual way.

Which statutory limb should be checked first?

Scope - Section 57 provides that RBI cannot be placed in liquidation except by order of the Central Government and in the manner the Government directs; ordinary company-liquidation law does not apply in the usual way.

What is the next legal boundary?

Operative limb - The section reflects RBI's special statutory status as the central bank.

What record should support the conclusion?

Section 57 file evidence: Any hypothetical liquidation analysis must begin with the Central Government order requirement and the special statutory process.

Primary sources

Source control for Section 57: 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.