Under Section 9 of the Banking Regulation Act, 1949, a banking company is restricted in holding immovable property howsoever acquired (except such as is required for its own use). For what maximum period from acquisition (or from the commencement of the Act, whichever is later) may such property be held before disposal, subject to any extension permitted under the section?

Section 9 provides that, notwithstanding Section 6, no banking company shall hold any immovable property howsoever acquired, except such as is required for its own use, for any period exceeding seven years from the acquisition thereof or from the commencement of the Act, whichever is later, or any extension of such period as provided in the section. The property must be disposed of within that period or extended period. The rationale is to prevent banks from locking up depositors’ funds in non-banking real estate assets. The Reserve Bank is empowered to extend the period in appropriate cases, but the baseline statutory ceiling is seven years.