Section 5A of BRA : Section 5A: Act To Override Memorandum, Articles, Etc

Explanation using Example

Imagine a scenario where a banking company has a clause in its articles of association that allows it to invest a certain percentage of its funds in speculative ventures. However, the Banking Regulation Act, 1949, imposes restrictions on the types and amounts of investments that banks can make to ensure the stability of the banking system.

According to Section 5A of the Banking Regulation Act, 1949, despite what the bank's articles of association state, the bank must comply with the Act's investment restrictions. If the bank's articles allow for more speculative investments than the Act permits, those provisions in the articles would be considered void to the extent of their inconsistency with the Act. Therefore, the bank must follow the Act's regulations over its own articles when deciding on its investment activities.