Banking Regulation Act India

Topics: Bank, Central bank, Bank regulation Pages: 158 (60144 words) Published: May 25, 2011
THE BANKING REGULATION ACT, 1949 (Act No. 10 of 1949) [10th March, 1949] PREAMBLE PART I: PRELIMINARY Sections 1. 2. 3 4. 5. 5A. Short title, extent and commencement Application of other laws not barred Act to apply to co-operative societies in certain cases. Power to suspend operation of Act Interpretation Act to override memorandum, articles, etc.

PART II: BUSINESS OF BANIKNG COMPANIES 6. 7. 8. 9. 10. 10A. 10B 10BB Forms of business in which banking companies may engage Use of words "bank", "banker", "banking" or "banking company" Prohibition of trading Disposal of non-banking assets Prohibition of employment of managing agents and restrictions on certain forms of employment Board of directors to include persons with professional or other experience Ranking company to be managed by whole-time chairman Power of Reserve Bank to appoint Chairman of the Board of directors appointed on a whole-time basis r a managing director of a banking company Chairman and certain directors not to be required to hold qualification shares Provisions of sections 10A and 10B to override all other laws, contracts, etc. Requirement as to minimum paid-up capital and reserves Regulation of paid-up capital, subscribed capital and authorized capital and voting rights of shareholders Election of new directors Restriction on commission, brokerage, discount, etc., on sale of shares Prohibition of charge on unpaid capital

10C 10D 11. 12. 12A. 13. 14.

14A 15. 16. 17. 18. 19. 20. 20A. 21. 21A. 22. 22A. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 34A. 35. 35A 35B. 36. 36A.

Prohibition of floating charge on assets Restrictions as to payment of dividend Prohibition of common directors Reserve Fund Cash reserve Restriction on nature of subsidiary companies Restrictions on loans and advances Restrictions on power to remit debts Power of Reserve Bank to control advances by banking companies Rates of interest charged by banking companies not to be subject to scrutiny by courts Licensing of banking companies Validation of licences granted by Reserve Bank to multi-State co-operative societies Restrictions on opening of new, and transfer of existing, places of business Maintenance of a percentage of assets Assets in India Return of unclaimed deposits Monthly returns and power to call for other returns and information Power to publish information Accounts and balance-sheet Audit Submission of returns Copies of balance-sheets and accounts to be sent to registrar Display of audited balance-sheet by companies incorporated outside India Accounting provisions of this Act not retrospective Production of documents of confidential nature Inspection Power of the Reserve Bank to give directions Amendments of provisions relating to appointments of managing directors, etc., to be subject to previous approval of the Reserve Bank Further powers and functions of Reserve Banks Certain provisions of the Act not to apply to certain banking companies

PART IIA: CONTROL OVER MANAGEMENT 36AA Power of Reserve Bank to remove managerial and other persons from office

36AB Power of Reserve Bank to appoint additional directors 36AC Part IIA to override other laws

PART IIB: PROHIBITION OF CERTAIN ACTIVITIES IN RELATION TO BANKING COMPANIES 36AD. Punishments for certain activities in relation to banking companies PART IIC: ACQUISITION OF THE UNDERTAKINGS OF BANKING COMPANIES IN CERTAIN CASES 36AE. Power of Central Government to acquire undertakings of banking companies in certain cases 36AF Power of the Central Government to make scheme 36AG Compensation to be given to shareholders of the acquired bank. 36AH Constitution of the Tribunal 36AI Tribunal to have powers of a civil court 36AJ Procedure of the Tribunal PART III: SUSPENSION OF BUSINESS AND WINDING UP OF BANKING COMPANIES 36B. High Court defined 37. 38. 38A 39. 39A. 40. 41. 41A. 42. 43. 43A. 44. 44A. 44B. 45. Suspension of business Winding up by High Court Court liquidator Reserve Bank to be official...
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