Cognizance of offences
Section 47 of the Banking Regulation Act, 1949 deals with cognizance of offences. No Court shall take cognizance of any offence punishable under [sub-section (5) of section 36AA or] section 46 except upon complaint in writing made by an officer of [the Reserve Bank or, as the case may be, the National Bank] generally or specially authorized in writing in this behalf by [the Reser The Act came into force on 16 Mar 1949.
No Court shall take cognizance of any offence punishable under 1[sub-section (5) of section 36AA or] section 46 except upon complaint in writing made by an officer of 2[the Reserve Bank or, as the case may be, the National Bank] generally or specially authorized in writing in this behalf by 3[the Reserve Bank or, as the case may be, the National Bank], and 3[no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court superior thereto] shall try any such offence.
Section 47, 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.
-
State Bank Of India vs Reserve Bank Of India
Court's Decision & Legal Precedent
The principles of natural justice, particularly the rule of audi alteram partem, must be necessarily read into the Master Directions on Frauds (specifically Clauses 8.9.4 and 8.9.5) to save the directions from the vice of arbitrariness. Since classification of a borrower's account as fraudulent entails serious civil consequences including debarment from institutional finance for five years (a form of blacklisting), statutory silence in the directions does not imply exclusion of natural justice. Lender banks must furnish borrowers with a copy of forensic audit reports and provide a reasonable opportunity to submit representations before classifying accounts as fraudulent. The banks must issue reasoned orders addressing borrower objections. This requirement is constitutionally mandated under Article 14 of the Indian Constitution and does not obstruct the six-month timeline contemplated for fraud detection and reporting.
On this section: Provides for penal action against banks for non-compliance with RBI directions on timely fraud reporting
-
State Bank Of India vs Rajesh Agarwal
Court's Decision & Legal Precedent
The principles of natural justice, particularly the rule of audi alteram partem, must be necessarily read into the provisions of Clauses 8.9.4 and 8.9.5 of the Master Directions on Frauds to save them from the vice of arbitrariness. Since the classification of a borrower's account as fraudulent entails serious civil consequences—including five-year debarment from institutional finance, criminal reporting, and reputational damage akin to blacklisting—which directly impair the borrower's fundamental right to carry on business under Article 19(1)(g), lender banks must provide borrowers with (i) prior notice of the allegations and forensic audit findings; (ii) reasonable opportunity to submit representations explaining the findings; and (iii) reasoned orders addressing the borrower's objections, before classifying the account as fraudulent. The procedural timeframes contemplated under the Master Directions on Frauds (six months for the entire process) provide sufficient scope for affording such a hearing without obstructing prompt action, and thus the necessity for speedy fraud detection and reporting cannot justify the exclusion of the audi alteram partem principle. The reading in of natural justice principles is mandated by the presumption that statutory authorities intend to act in accordance with the principles of natural justice unless expressly or by necessary implication excluded, and is essential to ensure the Master Directions do not violate the requirement of non-arbitrariness enshrined in Article 14 of the Constitution.
On this section: Provides for penal action against banks for non-compliance with RBI directions
-
State Bank of India vs Reserve Bank of India
Court's Decision & Legal Precedent
The principles of natural justice, particularly the rule of audi alteram partem, must be read into the provisions of the Reserve Bank of India Master Directions on Frauds (specifically Clauses 8.9.4 and 8.9.5) despite the absence of express provision granting opportunity of hearing, because: (i) classification of a borrower's account as fraud entails serious civil consequences including debarment from institutional finance for five years which is akin to blacklisting; (ii) such debarment affects the fundamental right to carry on business under Article 19(1)(g) and the right to reputation under Article 21; (iii) the statutory silence in the Master Directions should be interpreted to include natural justice principles where substantial rights are affected; (iv) the six-month timeline contemplated provides sufficient scope for opportunity of hearing without paralyzing the administrative process; (v) mere participation in forensic audit process does not satisfy audi alteram partem requirements; (vi) borrowers must be served notice, provided copy of forensic audit reports, given opportunity to submit representations, and receive reasoned orders on their objections before classification as fraud to save the Master Directions from the vice of arbitrariness and violation of Article 14 of the Constitution.
On this section: Provides for penal action against banks for failure to adhere to RBI timelines for fraud reporting
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 47
What have the courts held on Section 47 of the Banking Regulation Act?
State Bank Of India vs Reserve Bank Of India (27 Mar 2023) is the leading judgment on this section among those set out below: Provides for penal action against banks for non-compliance with RBI directions on timely fraud reporting. Another 2 judgments on this section are set out below, all of them from the Supreme Court.
How do I find court cases under Section 47 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 47, section 47 Banking Regulation Act 1949, section 47 of the Banking Regulation Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with State Bank Of India vs Reserve Bank Of India (27 Mar 2023).
What should I read with Section 47 of the Banking Regulation Act, and has it changed?
Its own text turns on section 36AA (Power of Reserve Bank to remove managerial and other persons from office), section 46 (Penalties), so none of them can safely be read on its own.
When did Section 47 of the Banking Regulation Act come into force?
Section 47 of the Banking Regulation Act, cited as Banking Regulation Act 1949 47, 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 16 Oct 2026. This page is not a substitute for legal advice.