The BANKING REGULATION ACT, 1949

SUSPENSION OF BUSINESS AND WINDING UP OF BANKING COMPANIES

Section 40: Stay of proceedings.

Notwithstanding anything to the contrary contained in section 466 of the Companies Act, 1956 (1 of 1956), the High Court shall not make any order staying the proceedings in relation to the winding up of a banking company, unless the High Court is satisfied that an arrangement has been made whereby the company can pay its depositors in full as their claims accrue.