Banking Regulation Act- 1949

RBI Act-1934
Negotiable Instrument Act-1881
Banking in India
Till 1949, There was no separate
Act for Banking in India.
So it was controlled by Indian
Companies Act 1956.
The Central Banking Enquiry
Committee recommended the
need
of a separate legislation to
control banks due to mushroom
growth
of banks with inadequate capital,
dishonest management,
speculative business etc etc..
Accordingly a bill was introduced
in parliament in March 1948.
It was Passed in parliament in
February 1949 and The
Banking Regulation Act 1949
came to exist from 16th March
1949.
Banking Regulation Act, 1949
Banking in India is governed by
BR Act,1949 and RBI Act,1934
Banking in India is
controlled/monitored by
RBI and Govt. of India
The controls for different banks
are different
based on whether the bank/s
is/are
a) statutory corporation
b) a banking company
c) a cooperative society
BR Act covers banking
companies and cooperative
banks, with certain
modifications.
BR Act is not applicable to
primary agricultural credit
societies & land development
banks
Banking Regulation Act, 1949
Came into force on March 16,
1949.
Its purpose is to:
Provide safety in the interest
of depositors
Prevent misuse of powers by
managers of banks
Act does not supersede but
supplement to Companies Act,
1956
Initially named Banking
Companies Act, 1949 but from
March 1, 1966, the name of the
Act was changed to Banking
Regulation Act, 1949.
Initially, the law was applicable
only to banking companies.
But, 1965 it was amended to
make it applicable to cooperative
banks
Banking Regulation Act, 1949
Primary Agricultural Credit
Society and cooperative land
mortgage banks are excluded
from the Act.
The Act gives the Reserve Bank
of India (RBI) the power
to license banks,
have regulatory control
supervise the appointment
of the boards
ay down instructions for
audits;
mergers and liquidation;
issue directives
impose penalties.
But, RBI controls the licensing
and regulates the business
operations. The Banking Act was
a supplement to the previous
acts related to banking
Relationship Between
Banking and customer
Memory Tips
General Relationship ABCD
Obligations of Banker
Hoch, VICS GOli cavo
హచ్, విక్స్ గోలి కావో
Memory Tips
Hoch: Honoring of Cheques

A: Agent and Principal VI : Vicarious Liability

B: Beneficiary and trusty CS: Customer details Secrecy

CD: Creditor and Debtor GOli : Garnishing Order

CA : Customer Account Closure
Special Relationship / Banker Rights
ChI Chi SALi ఛి ఛీ సాలీ VO : Valuables and Ornaments kept

Ch I : Charge Interest
Ch I : Charge incidentals
S : set off
A: Appropriation
Li : lien
Relationship Between
Banking and customer
Memory Tips
General Relationship ABCD
Obligations of Banker
Hoch, VICS GOli cavo
హచ్, విక్స్ గోలి కావో
Memory Tips
Hoch: Honoring of Cheques

A: Agent and Principal VI : Vicarious Liability

B: Beneficiary and trusty CS: Customer details Secrecy

CD: Creditor and Debtor GOli : Garnishing Order

CA : Customer Account Closure
Special Relationship / Banker Rights
ChI Chi SALi ఛి ఛీ సాలీ VO : Valuables and Ornaments kept

Ch I : Charge Interest
Ch I : Charge incidentals
S : set off
A: Appropriation
Li : lien
Special Type of Customers Reserve Bank of India Functions

Memory Tip
Memory Tip
BaGNIA BanC.CC
MIL Ma JAJH TASC PaSC
భగినియా బేంక్స.సిసి
మిల్ మా జాజ్ ఠాస్ఖ్ పస్ఖ్
BaG : Bank to the Government
M : Minor NIA : Note Issuing Authority
BanC : Bank to Commercial Banks
I : Illiterate CC: Credit Controller
L: Lunatic
Kinds of Letter of Credit
Ma : Married Women
JA : Joint Account Memory Tip
TLCC : టి ఎల్ సి సి
JH : Joint Hindu Family
Telangana Legeslative Congres
TA : Trust Accounts Committee
SC : Societies and Charitable Institutes తెలేంగాణ లెజిసలే టివ్ కాేంగరెస్ఖ టమిటి
Pa : Partnership Firms TL : Traveler's Letter
CC : Commercial Credit
SC : Joint Stock Companies
Features of NI Act Kinds Negotiable Instruments

Memory Tip Memory Tip

TAR తార్ ProNBECh ప్రాణబిచ్చ
T : Transferability
ProN : Promissory Note
BE : Bills of Exchange
A : Absolute title
Ch: Cheque
R : Right to sue

NB: This notes is prepared just for a

rough idea to the peer and fellow students.
It is better to study the statute as a whole
and build better understanding the subject.

Best of Luck to all