"In amalgamation of two or more banking companies, Company Law is not applied." Comment, briefly explaining the procedure for amalgamation of banking companies.

Provisions and procedure required under the Companies Act, 2013 and the rules made thereunder are not applied for the purpose of amalgamation of banking companies. Instead for amalgamation of banking companies, the directions issued by the RBI as per circulars issued from time to time need to be followed in terms of Banking Regulations Act, 1949. There are certain deviations in the procedures compared to company law. The decision need to be approved by the two-third majority of the Board irrespective of number present in Board meeting. The scheme needs to be approved by the shareholders with two-third majority in value. Sanction of the scheme is with the Reserve Bank of India instead of Court or Tribunal. Reserve Bank is the final authority to determine the entitlement of dissenting shareholders. Order sanctioning scheme by Reserve Bank of India is final, binding and effective and there is no procedure to file the same with ROC, even if the amalgamating banks are registered under the Companies Act, 2013.