Section 18: Prohibition of floating charge on assets

18. Prohibition of floating charge on assets.--(1) Notwithstanding anything contained in section 7 no banking company shall create a floating charge on the undertaking or any property of the company or any part thereof, unless the creation of such floating charge is certified in writing by the State Bank as not being detrimental to the interest of the depositors of such company. (2) Any such charge created without obtaining the certificate of the State Bank shall be invalid. (3) Any banking company aggrieved by the refusal of a certificate under sub-section (1) may, within ninety days from the date on which such refusal is communicated to it, appeal to the 2[Federal Government]. (4) The decision of the 2[Federal Government] where an appeal has been preferred to it under sub-section (3) or of the State Bank where no such appeal has been preferred shall be final.

Effective date: 1962-06-07

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