In the case of a banking company in financial distress, which has been placed under the order of moratorium, under Section 45(2) of the Act, on an application made by the Reserve Bank to the Central Government, the Reserve Bank can, for the foregoing reasons, frame a scheme of amalgamation for transferring the assets and liabilities of such distressed bank to a much better and stronger bank.
Such a scheme framed by the RBI is required to be sent to the banking companies concerned, for their suggestions or objections, including those from the depositors, shareholders and others. After consideration the same, the RBI sends the final scheme of amalgamation to the Central Government for sanction and notification in the official gazette.