1[(1)] No banking company shall pay any dividend on its shares until all its capitalised expenses (including preliminary expenses, organisation expenses, share-selling commission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off.
2[(2) Notwithstanding anything to the contrary contained in sub- section (1) or in the Companies Act, 1956 (1 of 1956), a banking company may pay dividends on its shares without writing off--
(i) the depreciation, if any, in the value of its investments in approved securities in any case where such depreciation has not actually been capitalised or otherwise accounted for as a loss;
(ii) the depreciation, if any, in the value of its investments in shares, debentures or bonds (other than approved securities) in any case where adequate provision for such depreciation has been made to the satisfaction of the auditor of the banking company;
(iii) the bad debts, if any, in any case where adequate provision for such debts has been made to the satisfaction of the auditor of the banking company.]
2[(2) Notwithstanding anything to the contrary contained in sub- section (1) or in the Companies Act, 1956 (1 of 1956), a banking company may pay dividends on its shares without writing off--
(i) the depreciation, if any, in the value of its investments in approved securities in any case where such depreciation has not actually been capitalised or otherwise accounted for as a loss;
(ii) the depreciation, if any, in the value of its investments in shares, debentures or bonds (other than approved securities) in any case where adequate provision for such depreciation has been made to the satisfaction of the auditor of the banking company;
(iii) the bad debts, if any, in any case where adequate provision for such debts has been made to the satisfaction of the auditor of the banking company.]
Source footnotes
1. S. 15 was re-numbered as sub-section (1) of that section by s. 10, ibid. (w.e.f. 1-10-1959).2. Ins. by Act 33 of 1959, s. 10 (w.e.f. 1-10-1959).
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Section 1 · Short title, extent and commencement.Section 2 · Application of other laws not barred.Section 3 · Act not to apply to certain co-operative societies.Section 4 · Power to suspend operation of Act.Section 5 · Interpretation.Section 5A · Act to override memorandum, articles, etc.Section 6 · Form of business in which banking companies may engage.Section 7 · Use of words "bank", "banker", "banking" or "banking company".India Code, Government of India. Text fetched 15 Oct 2026. Source metadata reports last modification: 2026-01-06. Check the linked official text and subsequent notifications when applying a provision.