law: Banking Regulation Act, 1949
  22. Licensing of banking companies
  (1) Save as hereinafter provided, no company
  
  shall carry on banking business in India unless it holds a license issued in
  
  that behalf by the Reserve Bank and any such license may be issued subject to
  
  such conditions as the Reserve Bank may think fit to impose.] .
  (2) Every banking company in existence on the
  
  commencement of this Act, before the expiry of six months from such
  
  commencement, and every other company before commencing banking business 11 [in
  
  India], shall apply in writing to the Reserve Bank for a license under this
  
  section:
  PROVIDED that in the case of a banking company
  
  in existence on the commencement of this Act, nothing in sub-section (1) shall
  
  be deemed to prohibit the company from carrying on banking business until it is
  
  granted a license in pursuance of 55[this section] or is by notice in writing
  
  informed by the Reserve Bank that a license cannot be granted to it:
  PROVIDED FURTHER that the Reserve Bank
  
  shall not give a notice as aforesaid to be a banking company in existence on
  
  the commencement of this Act before the expiry of the three years referred to
  
  in sub-section (1) of section 11 or of such further period as the Reserve Bank may
  
  under that sub-section think fit to allow.
  (3) Before granting any license under this
  
  section, the Reserve Bank may require to be satisfied by an inspection of the
  
  books of the company or otherwise that 56[***] the following conditions are
  
  fulfilled, namely:-
  (a) that the company
  
  is or will be in a position to pay its present or future depositors in full as
  
  their claims accrue;
  (b) that the affairs
  
  of the company are not being, or are not likely to be, conducted in a manner
  
  detrimental to the interests of its present or future depositors;
  (c) that the general
  
  character of the proposed management of the company will not be prejudicial to
  
  the public interest of its present or future depositors;
  (d) that the company
  
  has adequate capital structure and earning prospects;
  (e) that the public
  
  interest will be served by the grant of a license to the company to carry on
  
  banking business in India ;
  (f) that having regard
  
  to the banking facilities available in the proposed principal area of operations
  
  of the company, the potential scope for expansion of banks already in existence
  
  in the area and other relevant factors the grant of the license would not be
  
  prejudicial to the operation and consolidation of the banking system consistent
  
  with monetary stability and economic growth;
  (g) any other
  
  condition, the fulfillment of which would, in the opinion of the Reserve Bank,
  
  be necessary to ensure that the carrying on of banking business in India by the company will
  
  not be prejudicial to the public interest or the interests of the depositors.]
  (3A) Before granting any license under this
  
  section to a company incorporated outside India, the Reserve Bank may require
  
  to be satisfied by an inspection of the books of the company or otherwise that
  
  the conditions specified in sub-section (3) are fulfilled and that the carrying
  
  on of banking business by such company in India will be in the public interest
  
  and that the government or law of the country in which it is incorporated does
  
  not discriminate in any way against banking companies registered in India and
  
  that the company complies with all the provisions of this Act applicable to
  
  banking companies incorporated outside India.]
  (4) The Reserve Bank may cancel a license
  
  granted to a banking company under this section:
  (i) if the company
  
  ceases to carry on banking business in India ; or
  (ii) if the company at
  
  any time fails to comply with any of the conditions imposed upon it under
  
  sub-section (1); or
  (iii) if at any time,
  
  any of the conditions referred to in sub-section (3) 15 [and sub-section (3A)]
  
  is not fulfilled:
  PROVIDED that before canceling a license under
  
  clause (ii) or clause (iii) of this sub-section on the ground that the banking
  
  company has failed to comply with or has failed to fulfill any of the
  
  conditions referred to therein, the Reserve Bank, unless it is of opinion that
  
  the delay will be prejudicial to the interests of the company’s depositors or
  
  the public, shall grant to the company on such terms as it may specify, and
  
  opportunity of taking the necessary steps for complying with or fulfilling such
  
  condition.
  (5) Any banking company aggrieved by the
  
  decision of the Reserve Bank canceling a license under this section may, within
  
  thirty days from the date on which such decision is communicated to it, appeal
  
  to the Central Government.
  (6) The decision of the Central Government
  
  where an appeal has been preferred to it under sub-section (5) or of the
  
  Reserve Bank where no such appeal has been preferred shall be final.