Section 44B of the Banking Regulation Act, 1949 restricts the power of the High Court to sanction compromises or arrangements involving a banking company. Under sub-section (1), no High Court shall sanction a compromise or arrangement between a banking company and its creditors or members unless:

Section 44B(1), which was originally Section 45 and was subsequently renumbered, provides that notwithstanding anything in any law for the time being in force, no High Court shall sanction a compromise or arrangement between a banking company and its creditors or any class of them, or between such company and its members or any class of them (or sanction any modification thereto) unless it is certified by the Reserve Bank in writing as not being incapable of being worked and as not being detrimental to the interests of the depositors of such banking company. The RBI’s written certificate is a mandatory pre-condition for the High Court’s jurisdiction to sanction the arrangement. Under sub-section (2), the High Court may direct the Reserve Bank to make an inquiry into the affairs of the banking company where a compromise application is made.