Section 14 of the Banking Regulation Act, 1949 prohibits a banking company from creating a charge upon the unpaid capital of the company. Any such charge shall be:

Section 14 provides that no banking company shall create any charge upon any unpaid capital of the company, and any such charge shall be invalid. The provision is absolute in its terms; it does not contemplate approval by the Central Government or certification by the Reserve Bank as a means of validation. This is to be distinguished from Section 14A, which deals with floating charges on the undertaking or property of the bank and which can be created if the Reserve Bank certifies in writing that the charge is not detrimental to depositors. Section 14 protects the integrity of the bank’s capital cushion by ensuring uncalled capital remains available to meet claims.