THE BANKING REGULATION ACT,1949

Preamble of regulatory Act

Introduction

The Banking companies act, presently known as banking regulation act

Definition of banks

In India, the definition of the business of banking has been given in the

Different provisions of Banking regulations Act

S.
No.

Parts Topics

Sections
covered

1.

Preliminary

1 to 5A

2.

II

Business of Banking Companies

6 to 36 A

3.

IIA

Control over management

36AA to 36AC

4.

IIB

Prohibition of certain activities in relation

to banking Companies

36AD

5.

IIC

Acquisition of the undertakings of Banking

Companies in certain cases

36AE to 36AJ

6.

III

Suspension of business and winding up of

Banking Companies

36B to 45

7.

IIIA

Speedy provision for speedy disposal of

winding up proceedings

45A to 45X

8.

IIIB

Provision relating to certain operation of

Banking Companies

45Y to 45ZF

9.

IV

Miscellaneous

46 to 55A

10.

Application of the Act to cooperative

56

Applicability of the Banking Regulation Act, 1949

This Act applies to following categories of Banks:

Business of banking Companies

Continued

Collecting and transmitting money

Managing, selling and realizing any property that
may come into the possession of the bank in
satisfaction or part satisfaction of any of its dues
Acquiring, holding and dealing with any property
or any right, title or interest in any such property
that may form the security or part of the security
for any loans or advances or which may be
connected with such security
Undertaking and executing trusts

Continued
Acquiring, constructing, maintaining and altering of any
building for the purpose of the bank
Acquiring and undertaking the whole or part of the
business of any person or bank / company if its nature of
business is as per the allowed business for the bank
Doing all such other things as are incidental or conducive
to the promotion or advancement of the business of the
bank
Any other business the Central Govt. may by notification
specify as a allowed business
Banks are prohibited to do any other business

Use of words bank, banker, banking or banking company

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Applicability against other laws

Provisions of the Banking regulation Act,

1949 are not in substitution of other laws
applicable, unless otherwise expressly
said (Section 2 sub 56 (b)
Act is not applicable to
1 Primary Agricultural Society
2 Co-operative Land Mortgage Bank
3 Any other co-operative society except as
provided by Sec. 56(Section 3)

Banking Policy

Banking

Cash Reserve (CRR)

Every bank is required to keep cash reserve, with itself or by way of bal

SLR

Restrictions on loans and advances

(1) Notwithstanding anything to the contrary contained in section 77

of the Companies Act, 1956 (1 of 1956), no banking company shall,
(a) grant any loans or advances on the security of its own shares, or
(b) enter into any commitment for granting any loan or advance to or
on behalf of
(i) any of its directors,
(ii) any firm in which any of its directors is interested as partner,
manager, employee or guarantor, or
(iii) any company [not being a subsidiary of the banking company or a
company registered under section 25 of the Companies Act, 1956 (1 of
1956), or a Government company] of which 61[or the subsidiary or the
holding company of which] any of the directors of the banking company
is a director, managing agent, manager, employee or guarantor or in
which he holds substantial interest, or
(iv) any individual in respect of whom any of its directors is a partner or
guarantor.

Licensing of banking companies

Power to publish information

The Reserve Bank or the National Bank, or both, if they consider it in th

Power of the Reserve Bank to give directions

(1) Where the Reserve Bank is satisfied that

Continued.

(2) The Reserve Bank may, on representation made to it or on its own m

Amendments of provisions relating to appointments of

managing directors, etc., to be subject to previous
approval of the Reserve Bank.

no amendment of any provision relating to the maximum

permissible number of directors .
no appointment or re-appointment or termination of appointment
of a chairman.
Further powers and functions of Reserve Banks.
1.(a) caution or prohibit banking companies or any banking
company in particular against entering into any particular
transaction or class of transactions, and generally give advice to
any banking company;
(b) on a request by the companies concerned and subject to the
provision of section 149[44A], assist, as intermediary or otherwise,
in proposals for the amalgamation of such banking companies;
(c) give assistance to any banking company by means of the grant
of a loan or advance to it underclause (3) of sub-section (1) of
section 18 of the Reserve Bank of India Act, 1934 (2 of 1934);

(2) The Reserve Bank shall make an annual report to the Central Gover

Certain provisions of the Act not to apply to certain

banking companies.

(1) The provisions of section II, sub-section (1) of section 12, and sectio

CONTROL OVER MANAGEMENT

36AA. Power of Reserve Bank to remove managerial and other

36AB. Power of Reserve Bank to appoint additional directors

SUSPENSION OF BUSINESS AND WINDING UP OF BANKING

COMPANIES

High Court defined.

Thank you