BA ECONOMICS HONOURS

SEMESTER III
BANKING OPERATIONS
Credits: 03 45
Hours

Course Objective: The course Banking Operations intends to explain the legal
protection of available to bankers and customers in different types of accounts and
special classes of accounts. The focus is on the technology and banking reforms and
functions of the Reserve Bank of India.

Course Outcomes:
CO1.Explain the banking functions and new developments
CO2. Discuss the legal protection of bankers and customers in types of
accounts and special classes of customers
CO3. Examine the lending principles of banks
CO4. Assess the banking reforms in India
CO5. Demonstrate knowledge about the operations of the Reserve Bank of
India

Module I: Introduction to Banking (09 Hours)

Nature and development of banking - History of banking in India - Banking evolution
and functions - Merger and acquisition - New Technology, automation and legal
aspects - Automatic teller machine and use of internet, Smart card, Use of expert
system, Credit Cards.

Module II: Banker and Customer relationship (09 Hours)

Legal Character - Banker’s lien - Protection of bankers - Customers-Nature and type
of accounts; Special classes of customers- lunatics, minor, partnership, corporations,
local authorities; Banking duty to customers.
Module III: Paying and Collecting Banks and their duties (09 Hours)
Consumer protection: banking as service - Lending by Banks - Good lending
principles - Lending to poor masses - Consortium Lending - Securities for advances -
Kinds of advances and their merits and demerits, Repayment of loans: rate of interest,
protection against penalty - Default and recovery; Debt recovery tribunal - Credit
Policy - Contract between banker and customer: their rights and duties.
Module IV: Reforms in Indian Banking (09 Hours)
Capital adequacy – Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest, 2002; Recovery of Debts due to Banks and
Financial Institutions Act, 1993 (DRT, Act) – Bank Merger – IBC -
Recommendations of Committees - Debt Recovery Tribunal – Capital adequacy ratio
- Non-Performing Assets – Insolvency and Bankruptcy Code– Bank Merger - Deposit
Insurance -The Deposit Insurance Corporation Act, 1961; objects and reasons -
Establishment of Capital of DIC.
Module V: Central Bank (09
Hours)
The Reserve Bank of India - Organizational Structure - Function of the RBI -
Regulation of monetary mechanism of the economy - Credit control – Monetary
Policy committee – Inflation targeting - Control of RBI over non-banking companies.

Reference texts
1.
2. Committee Report on Banking Supervision, 2001.
3. Bhole, L. M. ’Financial Institutions and Markets,’ Tata McGraw Hill Co. Ltd.
New Delhi, 2012.
4. C. Goodhart, The Central Bank and the Financial System, (1995). Mac Millan,
London.
5. Gordon and Natrajan, Banking theory, Law and practice, Himalaya
Publishing House
6. J.Dermine (ed). European Banking in the 199s (1993) Blackwell, Oxford.
7. Janakiraman Committee Report on Securities of Operation of Banks and
Financial Institution (1993)
8. K. Subrahmanyan, Banking Reforms in India (1997) Tata McGraw Hill, New
Delhi
9. K.C. Shekhar and Lekshmy Shekhar, Banking theory and practice, Vikas
Publication
10. L.C. Goyle, The Law of Banking and Bankers, (1995), Eastern. Lloyds of
London Press, London.
11. M.L. TannanTannan, Banking Law and Practice in India (1997) India Law
House, Maxwell, London, 2000).
12. Narasimham Committee Report on the Financial System (1991) – Second
Report (1999).
13. P. N. Varshney, KPM Sundharam, Banking Theory, Law and Practice
(Nineteenth Reprint)
14. Principles & Practices of Banking, Indian Institute of Banking &Finance,
Macmillan Publications
15. RBI Bulletins, Economic and Political Weekly issues, Prajnan [NIBM], Daily
the Economic Times etc.
16. Reports on Currency and Finance.
17. S.L.Gaur, Principles of Bank Management, Himalaya Publishing House,
Bombay