Section 19: Restriction on nature of subsidiary companies.

Q: What does Section 19 of The Banking Regulation Act, 1949 (BR Act) deal with?

Section 19 BR Act pertains to "Restriction on nature of subsidiary companies.". It is part of the The Banking Regulation Act, 1949, a legislation enacted by the Parliament of India. Section 19 of The Banking Regulation Act, 1949 (BR Act) governs restriction on nature of subsidiary companies. As verified on 22 May 2026.

Q: Is Section 19 BR Act still in force?

Yes, Section 19 of the The Banking Regulation Act, 1949 is currently in force across the Republic of India.

Q: What is धारा 19 BR Act?

धारा 19 BR Act is the Devanagari Hindi reference for Section 19 of the The Banking Regulation Act, 1949. Section 19 of The Banking Regulation Act, 1949 (BR Act) governs restriction on nature of subsidiary companies. As verified on 22 May 2026.

Q: What is Dhara 19 BR Act?

Dhara 19 BR Act is the Roman Hindi reference for Section 19 of the The Banking Regulation Act, 1949. "Dhara" means "Section" in Hindi. Section 19 of The Banking Regulation Act, 1949 (BR Act) governs restriction on nature of subsidiary companies. As verified on 22 May 2026.

Q: How to cite Section 19 of The Banking Regulation Act, 1949?

Cite as: "Section 19, The Banking Regulation Act, 1949 (BR Act)" in legal briefs. For academic writing, use the BlueBook format: The Banking Regulation Act, 1949, 1949, § 19 (India).

Law on Tips Editorial Board

1 [(1) A banking company shall not form any subsidiary company except a subsidiary company formed for one or more of the following purposes, namely:—

Explanation.—For the purposes of section 8, a banking company shall not be deemed, by reason of its forming or having a subsidiary company, to be engaged indirectly in the business carried on by such subsidiary company.]

(2) Save as provided in sub-section (1), no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent. of the paid-up share capital of that company or thirty per cent. of its own paid-up share capital and reserves, whichever is less:

Provided that any banking company which is on the date of the commencement of this Act holding any shares in contravention of the provisions of this sub-section shall not be liable to any penalty therefor if it reports the matter without delay to the Reserve Bank and if it brings its holding of shares into conformity with the said provisions within such period, not exceeding two years, as the Reserve Bank may think fit to allow.

(3) Save as provided in sub-section (1) and notwithstanding anything contained in sub-section (2), a banking company shall not, after the expiry of one year from the date of the commencement of this Act, hold shares, whether as pledgee, mortgagee or absolute owner, in any company in the management of which any managing director or manager of the banking company is in any manner concerned or interested.

2[(4) Save as provided in clause (c) of sub-section (1), a banking company may form a subsidiary company to carry on the business of credit information in accordance with the Credit Information Companies (Regulation) Act, 2005 (30 of 2005).]1. Subs. by Act 1 of 1984, s. 22, for sub-section (1) (w.e.f. 15-2-1984). 2. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).