BANKING REGULATIONS ACT 1949
The Banking Regulation Act was passed as the Banking Companies Act 1949 and came into force wef 16.3.49. Subsequently it was changed to Banking Regulations Act 1949 wef 01.03.66. Summary of some important sections is provided hereunder. The section no. is given at the end of each item. For details, kindly refer the bare Act.
* Banking means accepting for the purpose of lending or investment of deposits of money from public repayable on demand or otherwise and withdrawable by cheque, drafts order or otherwise (5 (i) (b)). * Banking company means any company which transacts the business of banking (5(i)(c) * Transact banking business in India (5 (i) (e).
* Demand liabilities are the liabilities which must be met on demand and time liabilities means liabilities which are not demand liabilities (5(i)(f) * Secured loan or advances means a loan or advance made on the security of asset the market value of which is not at any time less than the amount of such loan or advances and unsecured loan or advances means a loan or advance not secured (5(i)(h). * Defines business a banking company may be engaged in like borrowing, lockers, letter of credit, traveller cheques, mortgages etc (6(1). * States that no company shall engage in any form of business other than those referred in Section 6(1) (6(2). * For banking companies carrying on banking business in India to use at least one word bank, banking, banking company in its name (7). * Restrictions on business of certain kinds such as trading of goods etc. (8) * Prohibits banks from holding any immovable property howsoever acquired except as acquired for its own use for a period exceeding 7 years from acquisition of the property. RBI may extend this period by five years (9) * Prohibitions on employments like Chairman, Directors etc (10) * Paid up capital, reserves and rules relating to these (11 & 12) * Banks not to pay any commission, brokerage, discount etc. more than 2.5% of paid up value...
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