(1) In a place where there is a Government treasury or sub-treasury or a nationalised bank or a co-operative bank, a scheduled bank as defined in section 2 of the Reserve Bank of India Act, 1934 or a bank to which the Government treasury business has been made over, or a post office, the municipal fund shall be kept in any such treasury, sub-treasury, nationalised bank, co-operative bank, scheduled bank or bank or post office.
(2) In places where there is no such treasury or sub-treasury or nationalised bank or co-operative bank or scheduled bank or bank or a post office, the municipal fund, may, with the previous sanction of the Deputy Commissioner, be deposited with any banker, or persons acting as a banker, and who has given such security for the safe custody and repayment on demand of the fund so deposited as the Deputy Commissioner may in each case think sufficient.
Explanation:–– In this section the expression “co-operative bank” shall mean a co-operative bank which holds a licence for carrying on banking business issued by the Reserve Bank of India under section 22 of the Banking Regulation Act, 1949.