Section 2:
Definition.
In this Act, unless the context otherwise requires,--
(a) banking means the accepting for the purpose of lending or investment, of deposits of money
from the public repayable on demand or otherwise, and withdrawable by cheque, draft, order or
otherwise;
(b) banking company means any company which transacts the business of banking in India and
includes the State Bank 1[and a subsidiary bank], but does not include the 2[Tamil Nadu Industrial
Investment Corporation Limited].
Explanation.--Any company which is engaged in the manufacture of goods or carries on any
trade and which accepts deposits of money from the public merely for the purpose of financing its
business as such manufacturer or trader shall not be deemed to transact the business of banking
within the meaning of this clause;
(c) Board means the Board of directors constituted under section 6;
(d) company means any company as defined in section 3 of the Companies Act, (1 of 1956) and
includes a foreign company within the meaning of section 591 of that Act;
3[(dd) co-operative bank means a State co-operative bank, a Central co-operative bank and a
primary co-operative bank;]
(e) Corporation means 4[the Deposit Insurance and Credit Guarantee Corporation] established
under section 3;
5[(ee) corresponding new bank means a corresponding new bank constituted under section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or, as the
case may be, under section 3 of the Banking companies (Acquisition and Transfer of Undertakings)
Act, 1980 (40 of 1980);]
6[(eea) credit institution means all or any of the following, namely:--
(i) a banking company;
(ii) a corresponding new bank;
(iii) a Regional Rural Bank;
(iv) a co-operative bank;
(v) a financial institution];
(f) defunct banking company means a banking company--
(i) which has been prohibited from receiving fresh deposits; or
(ii) which has been ordered to be wound up; or
(iii) which has transferred all its deposit liabilities in India to any other institution; or
(iv) which has ceased to be a banking company within the meaning of sub-section (2) of
section 36A of 7[the Banking Regulation Act, 1949 (10 of 1949)], or has converted itself into a
non-banking company; or
(v) in respect of which a liquidator has been appointed in pursuance of a resolution for the
voluntary winding up of its affairs; or
(vi) in respect of which any scheme of compromise or arrangement or of reconstruction has
been sanctioned by any competent authority and the said scheme does not permit the acceptance of
fresh deposits; or
(vii) which has been granted a moratorium which is in operation; or
(viii) in respect of which an application for the winding up of its affairs is pending in a
8[competent Court; or]
9[(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of section 18A is issued or made;]
10[(ff) defunct co-operative bank means a co-operative bank--
(i) which has been prohibited from receiving fresh deposits; or
(ii) which has been ordered or directed to be wound up; or
(iii) which has transferred all its deposit liabilities in India to any other institution; or
(iv) which has ceased to be a co-operative bank within the meaning of sub-section (2) of
section 36A of the Banking Regulation Act 1949 (10 of 1949); or
(v) which has converted itself into a non-banking co-operative society; or
(vi) in respect of which any scheme of compromise or arrangement or of reconstruction has
been sanctioned under any law for the time being in force and such scheme does not permit the
acceptance of fresh deposits; or
(vii) which has been granted a moratorium which is in operation; or
(viii) in respect of which an application for winding up is pending before the Registrar of
Co-operative Societies or other competent authority under any law relating to co-operative
societies for the time being in force 11[in a State;or]
12[(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of section 18-A is issued or made;]
(g) “deposit means the aggregate of the unpaid balances due to a depositor (other than a foreign
Government, the Central Government, a State Government 13[ 14[ a corresponding new bank or
15[a Regional Rural Bank or a banking company]] or a co-operative bank]) in respect of all his
accounts by whatever name called, 16[ 17[ with a corresponding new bank or 18[with a Regional Rural
Bank or with a banking company]] or a co-operative bank] and includes credit balances in any cash
credit account but does not include,--
(i) where 15[a Regional Rural Bank or a banking company or a co-operative bank] at the
commencement of this Act 19[or where an eligible co-operative bank at the commencement of the
Deposit Insurance Corporation (Amendment) Act, 1968 (56 of 1968)] is working under a scheme
of compromise or arrangement or of reconstruction sanctioned by any competent authority
providing for the acceptance of fresh deposits any amount due to the depositor in respect of his
deposit before the date of the coming into force of the scheme of the extent it is not credited after
to the said date under the provisions of that scheme; or
20[(ia) any amount due on account of any deposit with any insured bank which has been
specially exempted in this behalf by the Corporation with the previous approval of the Reserve
Bank; or]
(ii) any amount due on account of any deposit received outside India;
19[(gg) eligible co-operative bank means a co-operative bank the law for the time being
governing which provides that--
(i) an order for the winding up, or an order sanctioning a scheme of compromise or
arrangement or of amalgamation or reconstruction, of the bank may be made only with the
previous sanction in writing of the Reserve Bank;
(ii) an order for the winding up of the bank shall be made if so required by the Reserve Bank
in the circumstances referred to in section 13D;
(iii) if so required by the Reserve bank in public interest or for preventing the affairs of the
bank being conducted in a manner detrimental to the interests of the depositors or for securing the
proper management of the bank, an order shall be made for the supersession of the committee of
management or other managing body (by whatever name called) of the bank and the appointment
of an administrator therefor for such period or periods not exceeding 5 years in the aggregate as
may from time to time be specified by the Reserve Bank;
(iv) an order for the winding up of the bank or an order sanctioning a scheme of compromise
or arrangement or of amalgamation or reconstruction or an order for the supersession of the
committee of management or other managing body (by whatever name called) of the bank and
the appointment of an administrator therefor made with the previous sanction in writing or on the
requisition of the Reserve Bank shall not be liable to be called in question in any manner; and
(v) the liquidator or the insured bank or the transferee bank, as the case may be, shall be
under an obligation to repay the Corporation in the circumstances to the extent and in the manner
referred to in section 21;]
(h) existing banking company means a banking company carrying on the business of banking at
the commencement of this Act which either holds a licence at such commencement under section 22
of 21[the Banking Regulation Act, 1949 (10 of 1949)] or having applied for such licence has not beeninformed by notice in writing by the Reserve Bank that a licence cannot be granted to it and includes
the State Bank and subsidiary bank, but does not include a defunct banking company;
22[(hh) existing co-operative bank means a co-operative bank carrying on the business of
banking at the commencement of the Deposit Insurance Corporation (Amendment) Act, 1968
(56 of 1968), which either holds a licence at such commencement under section 22 of the Banking
Regulation Act, 1949 (10 of 1949), or having applied for such licence has not been informed by
notice in writing by the Reserve Bank that a licence cannot be granted to it but does not include a
defunct co-operative bank;]
23[(hha) Financial institution means any financial institution within the meaning of clause (c) of
section 451 of the Reserve Bank of India Act, 1934 (2 of 1934);]
24[(i) insured bank means 25[a banking company],
26[or a Regional Rural Bank]]
27[or a
corresponding new bank] or an eligible co-operative bank for the time being registered under the
provisions of this Act and includes for the purposes of sections 16, 17, 18 and 21,--
28[(i) a banking company referred to in clause (a) or clause (b) of sub-section (1) of
section 13, or
(ia) a corresponding new bank to which the provisions of clause (a) of sub-section (1) of
section 13 apply, or]
(ii) a co-operative bank referred to in clause (a) or clause (b) of section 13C,]
the registration whereof has been cancelled under section 13, or, as the case may be, under section
13C;]
(j)insured deposit means the deposit or any portion thereof the repayment whereof is insured by
the Corporation under the provisions of this Act;
(k) new banking company means a banking company which begins to transact the business of
banking after the commencement of this Act under a licence granted to it under section 22 29[the
Banking Regulation Act, 1949 (10 of 1949)] 30***;
22[(kk)] new co-operative bank means a co-operative bank which begins to transact the business
of banking after the commencement of the Deposit Insurance Corporation (Amendment) Act, 1968
(56 of 1968), under a licence granted to it under section 22 of the Banking Regulation Act, 1949
(10 of 1949), and includes a primary credit society becoming a primary co-operative bank after such
commencement;]
(l) premium means the sum payable by an insured bank under section 15 of this Act;
(m) prescribed means prescribed by regulations made under this Act;
27[(ma) Regional Rural Bank means a Regional Rural Bank established under section 3 of the
Regional Rural Banks Act, 1976 (21 of 1976);]
(n) Reserve Bank means the Reserve Bank of India constituted under the Reserve Bank of India
Act, 1934 ( 2 of 1934);
(o) State Bank means the State Bank of India constituted under the State Bank of India Act,
1955 (23 of 1955);
(p)subsidiary bank shall have the meaning assigned to it in section 2 of the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959);
31[(q) the expressions central co-operative bank, 32*** and State Co-operative Bank shall have
the meanings respectively assigned to them in the National Bank for Agriculture and Rural
Development Act, 1981 (61 of 1981);
(r) the expressions 33[co-operative society, primary co-operative bank] and primary credit
society shall have the meanings respectively, assigned to them in Part V of the Banking Regulation
Act, 1949 (10 of 1949)].
Notes:
1. Subs. by Act 1 of 1984, s. 56, for , a subsidiary bank and any other banking institution notified under section 51 of the Banking Regulation Act, 1949 (10 of 1949) (w.e.f. 15-2-1984).
2. Subs. by Act 56 of 1974, s. 3 and the Second Schedule, for Madras Industrial Investment Corporation Limited (w.e.f. 20-12-1974).
3. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
4. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
5. Subs. by Act 1 of 1984, s. 56, for sub-clause (ee) (w.e.f. 15-2-1984).
6. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
7. Subs. by Act 56 of 1968, s.2, for the Banking companies Act, 1949 (10 of 1949), (w.e.f. 1-7-1971).
8. Subs. by Act 30 of 2021, s. 2, for “competent Court” (w.e.f. 1-9-2021).
9. Ins. by s. 2, ibid. (w.e.f. 1-9-2021).
10. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
11. Subs. by Act 30 of 2021, s. 2, for “in a State.” (w.e.f. 1-9-2021).1
12. Ins. by s. 2, ibid. (w.e.f. 1-9-2021).
13. Subs. by Act 56 of 1968, s.3, for or a banking company (w.e.f. 1-7-1971).
14. Subs. by Act 5 of 1970, s. 20, for , a banking company (w.e.f. 19-7-1969).
15. Subs. by Act 21 of 1976, s. 33, for a banking company (w.e.f. 26-9-1975).
16. Subs. by Act 56 of 1968, s. 3, for with a banking company (w.e.f. 1-7-1971).
17. Subs. by Act 5 of 1970, s. 20, for with a banking company (w.e.f. 19-7-1969).
18. Subs. by Act 21 of 1976, s. 33, for with a baking company (w.e.f. 26-9-1975).
19. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
20. Ins. by Act 81 of 1985, s. 5 (w.e.f. 1-5-1986).
21. Subs. by Act 56 of 1968, s. 2, for the Banking Companies Act, 1949 (w.e.f. 1-7-1971).
22. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
23. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
24. Subs. by Act 56 of 1968, s. 3, for clause (i) (w.e.f. 1-7-1971).
25. Subs. by Act 19 of 1988, s. 3 and Second Schedule, for corresponding new bank or a banking company (w.e.f. 31-3-1988).
26. Ins. by Act 1 of 1984, s. 56 (w.e.f. 1-7-1971).
27. Ins. by Act 21 of 1976, s. 33 (w.e.f. 26-9-1975).
28. Subs. by s. 56, ibid., for, sub-clause (i) (w.e.f. 19-7-1969).
29. Subs. by Act 56 of 1968, s. 2, for the Banking Companies Act, 1949 (w.e.f. 1-7-1971).
30.The words and figures , and includes any banking institution notified under section 51 of the said Act after such commencement omitted by Act 1 of 1984, s. 56 (w.e.f. 15-2-1984).
31. Subs. by Act 61 of 1981, s. 61 and the Second Schedule, for clause (q) (w.e.f. 12-7-1982).
32. The words “co-operative society” omitted by Act 24 of 2004, s. 3 (w.e.f. 1-3-1966).
33. Subs. by s. 3, ibid., for primary co-operative bank (w.e.f. 1-3-1966).
________________________________________