The High Court may order winding up of a banking company on account of:
- The banking company is unable to pay its debts
- An application of winding up had been made by the Reserve Bank under the provisions of the Banking Regulation Act (Sec37 and 38)
The RBI is to make an application for winding up (under Sec 38 of BR Act) and under Sec 35 if directed by the Central Government. Central Government may give such direction, based on the report of inspection or scrutiny made by the Reserve Bank, and on account of the situation that the affairs of the bank are being conducted to the detriment of the interests of the depositors. However before giving such direction, the banking company would be given an opportunity to make a representation in connection with the inspection/scrutiny report.