Section 18 of The Reserve Bank of India Act, 1934 View Chapter 2

Power of direct discount.

   1***When, in the opinion of the 2[Bank] 3***, a special occasion has arisen making it necessary or expedient that action should be taken 4[under this section] for the purposes of regulating credit in the interests of Indian 5*** trade, commerce, industry and agricultural, the Bank may, notwithstanding any limitation contained in 6*** section 17,--

       7[(1)  purchase, sell or discount any bill of exchange or promissory note though such bill or promissory note is not eligible for purchase or discount by the Bank under that section; or]

       8*       *       *       *       *

       9[(3)  make loans or advances to--

         (a)  a State co-operative bank, or

         (b)  on the recommendation of a State co-operative bank, to a cooperative society registered within the area in which the State cooperative bank operates, or

         (c)  any other person,

    repayable on demand or on the expiry of the fixed periods, not exceeding ninety days, on such terms and conditions as the Bank may consider to be sufficient.]

       10*       *       *       *       *

       11*       *       *       *       *

1The brackets and figures "(1)" omitted by Act 51 of 1974, s. 7 (w.e.f. 13-12-1974).

2Subs. by Act 32 of 1951, s. 8, for "Central Board” (w.e.f. 1-11-1951).

3Certain words omitted by Act 62 of 1948, s. 7 and the Schedule (w.e.f. 1-1-1949).

4Subs. by Act 51 of 1974, s. 7, for "under this sub-section" (w.e.f. 13-12-1974).

5The words "or Burman" omitted by Act 11 of 1947, s. 12 (w.e.f. 1-4-1947) which was inserted by the M.O. 1937.

6The words, brackets, letters and figures "sub-clauses (a) and (b) of clause (2) or sub-clause (a) or (b) of clause (3) or clause (4) of" omitted by Act 51 of 1974, s. 7 (w.e.f. 13-12-1974).

7Subs. by s. 7, ibid., for clause (1) (w.e.f. 13-12-1974).

8Clause (2) omitted by Act 24 of 1978, s. 5 (w.e.f. 21-7-1978).

9Subs. by Act 51 of 1974, s. 7, for clause (3) (w.e.f. 13-12-1974).

10The proviso omitted by Act 62 of 1948, s. 7 and the Schedule (w.e.f. 1-1-1949).

11Sub-section (2) omitted by Act 51 of 1974, s. 7 (w.e.f. 13-12-1974).