Audit
Section 30 of the Banking Regulation Act, 1949 deals with audit. The balance-sheet and profit and loss account prepared in accordance with section 29 shall be audited by a person duly qualified under any law for the time being in force to be an auditor of companies.] [(1A) Notwithstanding anything contained in any law for the time being in force or in any contrac The Act came into force on 16 Mar 1949.
1[(1) The balance-sheet and profit and loss account prepared in accordance with section 29 shall be audited by a person duly qualified under any law for the time being in force to be an auditor of companies.]
2[(1A) Notwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company shall, before appointing, re-appointing or removing any auditor or auditors, obtain the previous approval of the Reserve Bank.
(1B) Without prejudice to anything contained in the Companies Act, 1956 (1 of 1956), or any other law for the time being in force, where the Reserve Bank is of opinion that it is necessary in the public interest or in the interest of the banking company or its depositors so to do,3[it may at any time by order order direct that a special audit of the banking company's accounts, for any such transaction or class of transactions or for such period or periods as may be specified in the order, shall be conducted and may by the same or a different order either appoint a person duly qualified under any law for the time being in force to be an auditor of companies or direct the auditor of the banking company himself to conduct such special audit] and the auditor shall comply with such directions and make a report of such audit to the Reserve Bank and forward a copy thereof to the company.
(1C) The expenses of, or incidental to 4[the special audit] specified in the order made by the Reserve Bank shall be borne by the banking company.]
(2) The auditor shall have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities and penalties imposed on, auditors of companies by 5[section 227 of the Companies Act, 1956 (1 of 1956)]. 6[, and auditors, if any, appointed by the law establishing, constituting or forming the banking company concerned].
(3) In addition to the matters which under the aforesaid Act the auditor is required to state in his report, he shall, in the case of a banking company incorporated 7[in India], state in his report,--
(a) whether or not the information and explanations required by him have been found to be satisfactory;
(b) whether or not the transactions of the company which have come to his notice have been within the powers of the company;
(c) whether or not the returns received from branch offices of the company have been found adequate for the purposes of his audit;
(d) whether the profit and loss account shows a true balance 8[of profit or loss] for the period covered by such account;
(e) any other matter which he considers should be brought to the notice of the share holders of the company.
Section 30, The Banking Regulation Act, 1949 (Act 10 of 1949).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Salim Akbarali Nanji vs Union of India
Court's Decision & Legal Precedent
Writing off non-performing assets is a legitimate internal accounting procedure to clean the balance sheet of a banking company. Such write-off does not require prior approval from the Reserve Bank of India under statutory law, though banking companies customarily seek such approval as a matter of practice. The Reserve Bank of India, in its regulatory capacity, may consider the financial position of the applicant banking company before granting permission to utilize reserves for write-off purposes. The write-off does not extinguish the bank's right to proceed against borrowers to recover the dues; it is merely an accounting entry that does not affect the creditor's legal rights to pursue recovery through available legal remedies. The decision to write off bad debts, when approved by shareholders and supported by adequate reserves and maintained capital adequacy ratios, does not constitute illegal or arbitrary action by the Reserve Bank of India and is not subject to judicial review through writ jurisdiction.
On this section: Deals with audit of balance sheet and profit and loss account by qualified auditors. Court found this provision not relevant to the write-off issue.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 30
What have the courts held on Section 30 of the Banking Regulation Act?
Salim Akbarali Nanji vs Union of India (11 May 2006) is the leading judgment on this section among those set out below: Deals with audit of balance sheet and profit and loss account by qualified auditors. Court found this provision not relevant to the write-off issue.
How do I find court cases under Section 30 of the Banking Regulation Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Banking Regulation Act 1949 30, section 30 Banking Regulation Act 1949, section 30 of the Banking Regulation Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Salim Akbarali Nanji vs Union of India (11 May 2006).
What should I read with Section 30 of the Banking Regulation Act, and has it changed?
Its own text turns on section 29 (Accounts and balance-sheet), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.
When did Section 30 of the Banking Regulation Act come into force?
Section 30 of the Banking Regulation Act, cited as Banking Regulation Act 1949 30, came into force on 16 Mar 1949, having been enacted on 10 Mar 1949. It is in force as at the date shown on this page.
Other sections of this Act
- 56. Act to apply to co-operative societies subject to modifications5544 words
- 45. Power of Reserve Bank to apply to Central Government for suspension of business by a banking company and to prepare scheme of reconstitution or amalgamation2310 words
- 10B. Banking company to be managed by whole time chairman1171 words
- 5. Interpretation1164 words
- 43A. Preferential payments to depositors1031 words
- 11. Requirement as to minimum paid-up capital and reserves988 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.