Name: Nikhil Kashyap, Gomini Gupta, Nitan Sharma
Country: India

Year: 2026
Volume: Volume-13, Issue-2, Year-2026 ( july- dec)
Page Number: 160-176
DOI: https://doi.org/10.5281/zenodo.23490151

The banking sector is one of the most critical pillars of the Indian economy. It facilitates the circulation of money, promotes economic development, and encourages public savings. Since the banking system handles citizens’ deposits and undertakes various financial operations with high economic impact, it is subject to a special legal framework. The Banking Regulation Act, 1949, gives the Reserve Bank of India (RBI) the exclusive authority to control and regulate the banking system. In other words, if a bank fails to operate in a solvent manner, the RBI can intervene and take necessary steps to protect the public. The law provides several legal provisions for the suspension of banking operations and the winding up of insolvent banks.
This paper aims to demonstrate the legal provisions of the Banking Regulation Act, 1949, which deal with the suspension and winding up of banking companies. The study further examines the relevant case laws in this area which have contributed to the elucidation of these statutes. By doing so, the paper seeks to provide an elaborate comprehension of the legal framework governing the winding up of banks and financial institutions in India.

Keywords: Banking Regulation Act, suspension, moratorium, winding up, Reserve Bank of India, depositor protection.