Comments of the reserve bank of india on a new capital adequacy framework. In light of honble supreme court order, the reserve bank of india will take necessary steps, including issuance of a revised circular, as may be necessary, for expeditious and effective resolution of stressed assets. The rbi act was enacted with an objective of constituting reserve bank of india to regulate issue of bank notes, to keep reserves to ensure monetary stability, to operate currency and credit system. Rbi maintains banking accounts of all scheduled commercial banks of india. Objectives of banking regulation act 1949 the banking act was enacted in february1949 with the following objectives. Introduction banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. Directive under section 35a of the banking regulation act. The banking regulation amendment ordinance is replaced by the bill and to the same effect promulgated in june 2020. Banking regulation act, 1949 also provide powers of reserve bank of india such as. It seeks to amend the banking regulation act, 1949 to insert provisions for. Banking regulation act 1949 amended, rbi to regulate. The paper attempts to substantiate the provisions of the br act by. Passed as the banking companies act 1949, it came into force.
Banking regulation amendment bill, 2020 need, features. The reserve bank of india amendment and miscellaneous provisions. One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise. The industrial disputes banking and insurance companies act 1949. It acts as an instruction manual, guiding the banks what to do and what not. The ordinance amends the banking regulation act, 1949 as applicable to cooperative banks. But basically all cooperative banks are registered under the cooperative societies.
This act does not regulate banking directly though section 18 and 42 of rbi. The act was initially enacted to regulate the banking companies. Banking company bound to comply with any direction issued by r. Further, the section interprets the provisions of banking regulation act 1949 aacs, initiates amendments, coordinates with the government, corresponds with various state governments on matters pertaining to amendments of state cooperative societies acts, coordinates with dicgc on matters pertaining to banks under liquidation, maintains and updates the list of urban cooperative banks, monitors cooperative credit societies having paid up capital above rs one lakh, watches compliance to sec 9.
This act gives supervisory and regulatory powers to rbi over the coop banks. Regulations of bank and financial institutions rbi grade. Directive under section 35a of the banking regulation act, 1949. The act was regulated the opening of branches and changing location of existing branches. Regulatory framework of bank audit and inspection a critical. The act extends to entire nation including jammu and kashmir. Free download in pdf banking law multiple choice questions and answers for competitive exams.
Definitions chapter ii obligations and immunities of directors and members of local boards 3. This includes the license to control and regulate the voting rights of the shareholders, supervising the. Initially, the law was applicable only to banking companies. An act to consolidate and amend the law relating to banking. The reserve bank of india rbi established under the rbi act, 1934, rbi is the central bank of india. Therefore a need was felt to have a specific legislation having comprehensive coverage on banking business in india. In view of the above, it is decided to amend the banking regulation act, 1949 by the banking regulation amendment bill, 2020, inter alia, to provide for the following. April 14, 2015 dear all welcome to the refurbished site of the reserve bank of india. The act gives following powers to reserve bank of india rbi.
In 1965, it was amended and made applicable to cooperative banks also. The banking companies legal practitioner clients accounts act 1949. Powers, history, functions of the reserve bank of india rbi. Regulatory framework of bank audit and inspection a. Banking awareness ebook important acts of banking sector. The banking regulation act 1949 the state financial corporations act 1951 the reserve bank of india amendment and misc. In exercise of the powers conferred by the banking regulation act, 1949, the reserve bank of india act, 1934 and payment and settlement systems act, 2007, the reserve bank, being satisfied that it is necessary and expedient in the public interest so to do, hereby. The banking regulation act, 1949 reserve bank of india. Jun 07, 2019 in exercise of the powers conferred by the banking regulation act, 1949 and the reserve bank of india act, 1934, the reserve bank, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the directions hereinafter specified. The ordinance seeks to amend the banking regulation act, 1949, which regulates the functioning of banks and provides details on various aspects such as licensing, management, and operations of banks. The reserve bank of india general regulations, 1949 21956 in exercise of the powers conferred by section 58 of the reserve bank of india act, 1934 2 of 1934 and in supersession of the reserve bank of india general regulations, 1935, the central board of the reserve bank of india, with the previous sanction of the central government, is pleased to make the following regulations, namely. Reserve bank of india act, 1934 was enacted on 6th march, 1934 to constitute the rbi. Furthermore, the central bank was ordered to support economic plan with loans.
Whereas it is expedient to consolidate and amend the law relating to banking 2. Objectives of banking regulation act 1949 the banking act was. Role of rbi reserve bank of india as regulator paper tyari. The reserve bank of india amendment act, 1949 44 of 1949. Following the cancellation of its license, the bank will stop to carry on the banking business, which includes accepting and repaying deposits as defined in section 5b read with section 56 of the banking regulation br act, 1949. Rbi act 1934 empowers rbi to be a guardian of all the banks, issue currency notes and maintain the financial and economic stability of the country. Banking regulation amendment ordinance, 2020 ias parliament. Be it enacted by parliament in the seventyfirst year of the republic of india as follows. In exercise of the powers conferred by section 58 of the reserve bank of india act, 1934 2 of 1934 and in supersession of the reserve bank of india general regulations, 1935, the central board of the reserve bank of india, with the previous sanction of the central government, is pleased to make the following regulations, namely. The act does not apply to certain cooperative societies such as primary agricultural credit societies and cooperative land mortgage banks.
Mar 15, 2020 the banking regulation amendment bill, 2020 aimed to amend the banking regulation act, 1949. In these regulations, unless there is anything repugnant in the subject or context, definitions a the act means the reserve bank of india act 1934 ii of 1934. Legal framework for regulation of banks in india trotal. For commencing banking business, a primary urban cooperative bank, as in the case of commercial bank, is required to obtain a licence from the reserve bank of india, under the provisions of section 22 of the banking regulation act, 1949 as applicable to cooperative societies. The special audit may be conducted or ordered to be conducted, in the opinion of the reserve bank of india that the special audit is necessary. Since in terms of section 19 2 of the banking regulation act, 1949, a bank cannot hold shares in excess of 30 per cent of the paid up share capital of a company, unless it is a subsidiary, the reserve bank would, based on merits, recommend to the government to grant exemption from the provisions of section 192 of the act, i. Power of reserve bank to apply to central government for suspension of. The reserve bank of india general regulations, 1949. Attempt the questions yourself and to check the answer, download the pdf from the below link to see whether you got the answer or. Under the provisions of the banking regulation act, 1949, it can, inter alia. The banking regulation amendment bill, 2020 prs india. The banking companies legal practitioner clients accounts act 1949 the industrial disputes banking and insurance companies act 1949 the banking regulation companies rules 1949 the banking regulation act 1949 the state financial corporations act 1951 the reserve bank of india amendment and misc. Provisions of rbi act 1935, banking regulation act 1949, prevention of money laundering act, 2002.
On january 28, 2021 the reserve bank of india rbicancelled the licence of shivam sahakari bank ltd, a cooperative bank in ichalkaranji, kolhapur, maharashtra. Nov 06, 2014 here you can find description about banking regulation act, 1949 in hindi. Thus, amendments to the banking regulation act, 1949 brought cooperative banks and regional rural banks under the reserve bank s jurisdiction, while amendments to the reserve bank of india act. Be it enacted by parliament in the seventyfirst year of the republic of india as. The banking regulation act, 1949 is a legislation in india that regulates all banking firms in india. It provides framework for the supervision of banks and other related matters. Banking regulation act, 1949 this act regulates all banking firms in india i.
Primary agricultural credit society and cooperative land mortgage banks are not included under this act. Act, 2002 39 of 2002 and licensed to undertake business of banking by the reserve bank under the provisions of the banking regulation act, 1949 10 of 1949. Apart from the balance sheet audit, reserve bank of india is empowered by the provisions of the banking regulation act, 1949 to conductorder a special audit of the accounts of any banking company. Regulation act, 1949 and section 45ja and 45l of the reserve bank of india act, 1934 hereinafter, rbi act, 1934 and section 102 read with section 18 of the payment and settlement. Banking regulation act 1949 and important sections. It gives the rbi more regulatory powers over urban cooperative banks ucbs and multistate cooperative societies.
Jul, 2020 banking regulation act, 1949 from 1 march 1966. Regulate shareholders shareholding and voting rights. Banking regulation act, 1949, as amended vide banking regulation amendment act, 2020 39 of 2020, the reserve bank of india being satisfied that it is necessary and expedient in public interest so to do, hereby issues the directions hereinafter specified. Rbi cancels licence of shivam sahakari bank ltd, ichalkaranji. The banking regulation amendment bill, 2017 prs india.
Section 10bb provides power to reserve bank to appoint chairman of the board of directors appointed on a whole time basis or managing director of any banking company. Jan 29, 2015 central government to consult the rbi for making rules regarding banking companies. Banking companies nomination rules, 1985 in respect of bank deposits iwe. It aimed at protecting depositors interests, orderly development and conduct of banking operations and fostering of the overall health of the banking system and financial stability. In terms of section 31 of the banking regulation act, 1949 the act read with section 56 the act as amended by the banking regulation amendment ordinance, 2020, accounts and balancesheet referred to in section 29 of the act together with the auditors report shall be. It empowers the reserve bank of india to license banks and work as a banking.
In exercise of the powers conferred by the banking regulation act, 1949 and the reserve bank of india act, 1934, the reserve bank, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the directions hereinafter specified. Regulations of bank and financial institutions rbi gradeb main. Banking regulation act 1949 objectives paper tyari. The banking act was a supplement to the previous acts associated with banking.
Nov 20, 2018 from 1 st march, 1966, it was renamed as banking regulation act, 1949. Aug 28, 2019 rbi acts as regulator and supervisor of banking sector through the provisions of the banking regulation act, 1949. Banking awareness multiple choice questions mcqs and answers with explanation on banking regulation act for ibps bank po, ibps bank clerical, rrb po and clerical, sbi po and sbi clerical, ibps recruitments, rbi grade b and rbi bank. The administration nationalised commercial banks and established, based on the banking companies act, 1949 later called the banking regulation act, a central bank regulation as part of the rbi. Nomination under section 45 za of the banking regulation act, 1949 and rule 21 of. This bill seeks to give the reserve bank of india rbi the powers to regulate the cooperative banks. Inexercise ofthe powers conferred onthe reserve bank of india by section 22 1ofthe banking regulation act, 1949, jana small finance bank limited is hereby granted a licence to carry on small finance bank business in india subject to the terms and conditions mentioned inthe office letter dbr. The banking regulation act brought in certain minimum capital requirements for banks. This act is the basis for constitution, powers, and functions of rbi.
Nov 04, 2014 passed as the banking companies act 1949, it came into force wef 16 march 1949 and changed to banking regulations act 1949 wef 01. The banking regulation amendment ordinance, 2020 was promulgated on june 26, 2020. May 24, 2017 the banking regulation act is a set of rules which govern the banking sector in india. Whereas the reserve bank of india is satisfied that in order to protect the interest of the depositors and in public interest, it is necessary to issue certain directions to yes bank ltd. Banking regulation act, 1949 10 whose signature does an indian currency note bear. It also looks to enforce banking regulation guidelines of the rbi in cooperative banks, while the registrar of cooperative deals with administrative. Government and rbis powers opening of new banks and branch licensing constitution of board of directors and their rights banks share holders and their rights crr and slr concepts cash.
It is hereby notified for the information of the public that, the reserve bank of india, in exercise of powers vested in it under subsection 1 of section 35 a read with section 56 of the banking regulation act, 1949, hereby directs that the aforesaid directions shall continue to apply to the bank till june 24, 2021as per the directive. Passed as the banking companies act 1949, it came into force from 16 march 1949 and changed to banking regulation act 1949 from 1 march 1966. Functions and roles of reserve bank of india gk notes in pdf. Banking regulation amendment act, 2020 cooperative banks. But, 1965 it was amended to make it applicable to cooperative banks and to introduce other changes. Section 45 in banking regulation act,1949 indian kanoon. Reserve bank of india general regulations, 1949 contents chapter i introductory regulations 1. Recommend to the central government for exempting any bank from the provisions of the banking regulation act 1949. Provisions act 1953 the industrial disputes banking companies decision act 1955 the state bank of india act 1955 companies act 20. The banking regulation act 1949 contains various provisions governing the.
Section 24 and section 56 of the banking regulation act, 1949. No director or member to deal with matters with which he is personally concerned 5. The reserve bank of india rbi regulates and supervises public sector and private sector banks. Important sections in banking regulation act 1949 aspirants. An act further to amend the banking regulation act, 1949. The industrial finance corporation of india act 1948. Section 36a certain provisions of the act not to apply to certain banking companies. Drt act,1993, the law of limitation, fema,1999, etc. Banking regulation amendment act, 2020 cooperative banks brought under rbi supervision. The centre recently passed the banking regulation amendment ordinance, 2020. The bill seeks to amend the banking regulation act, 1949, with regard to cooperative banks.
Short title, extent and commencement 1 this act may be called the banking 3 regulation. Banking company means any company which transacts the business of banking in india. Banking regulation act, 1949 reserve bank of india. Comments of the reserve bank of india on the new basel capital accord. Objectives of banking regulation act 1949 the banking act.
Jan 26, 2017 br act 1949 provides a legal framework to regulate and supervise the banking activities. The reserve bank of india amendment act, 1951 32 of 1951. The powers of rbi under section 35aa and other sections of the banking regulation act, 1949 are, therefore, not under doubt. Recently, the lok sabha has passed an amendment to the banking regulation act, 1949. The section 22 of banking regulations act 1949, everybank has to obtain a license from rbi carrying onbanking business. The reserve bank of india act, 1934 and the banking regulation act, 1949 have given the rbi wide powers of supervision and control over commercial banks relating to.
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