Description
Commercial Banking and India
? ? ? ? ?
Definition and nature of Banking Constitution of different types of Banks Regulatory Scheme Role of RBI & Govt. PSBs & Cooperative Banks
?
Which are the laws that govern the Banking Industry?
?
Which are the laws that govern the Banking Industry? Banking Regulation Act 1949 RBI Act 1934 Through these laws, RBI & GOI exercise control over Banks
? ? ?
?
?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its __________.
?
? ?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its constitution What are the types of constitutions?
?
?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its constitution – statutory corporation, banking company or corporative society.
?
What is the definition of Banking?
? ?
What is the definition of Banking? Acceptance of deposits of money from public for the purpose of ________.
? ? ?
?
What is the definition of Banking? Acceptance of deposits of money from public for the purpose of lending and investment. Such deposits – repayable on demand or for period of time agreed by the banker & customer. Withdrawal by cheque, draft, order, etc.
?
Accept “deposits” how?
? ?
?
Accept “deposits” how? Accept “deposits” in form of money and nothing else. What does “public” imply?
? ?
?
What does “public” imply? Public – accepts deposits from anyone who offers money for such purpose. Can the Bank refuse to accept from any person?
? ? ?
Can the Bank refuse to accept from any person? A banker can refuse to open an account of an undesirable person/ entity Opening of an account is subject to certain stringent conditions these days to curb flow of money to finance terrorism.
?
Can anyone other than a bank accept deposits withdrawal by cheque?
?
?
Can anyone other than a bank accept deposits withdrawal by cheque? No
?
?
?
Non-banking companies, firms & other unincorporated associations of persons and individuals can accept deposits from public. Acceptance of deposits is regulated by RBI under Chapter IIIB of RBI Act. Other companies are regulated by Central Govt. under Companies (Acceptance of Deposit) Rules – under section 58 of Companies Act.
?
?
Other unincorporated associations of persons, firms and individuals whose principal business is lending or acceptance are now prohibited under section 45S of RBI Act (1997 amendment) to accept deposits from public, except relatives. This prohibition does not apply to those who are mainly engaged in manufacturing or trading.
?
?
A separate statute has been introduced for regulation of financial companies and redressal of grievances of depositors of such companies (Financial Companies Regulation Bill 2000 pending approval) The bill also aims to prohibit acceptance of deposits by individuals and unincorporated associations of individual, except for loans from relatives.
?
?
?
Necessary to have a licence from RBI for commencing or carrying on the business of banking (Sec 22 BRA) Every Bank must use the word “Bank” as part of their name. Can any other company use the word “Bank”, “Banking”, “Banker” in its name?
?
? ?
Can any other company use the word “Bank” in its name? No. Any Exceptions?
? ?
Any Exceptions? Subsidiaries of banks & associations of banks.
?
What are the permitted businesses of Banks?
? ? ? ?
What are the permitted businesses of Banks? Borrowing, raising or taking up money Lending or advancing money – with or without security Drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hundis, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, CDs, Scrips, & other instruments & securities tranferable or negotiable or not
?
Individual Assignment:
? The list above is indicative. Prepare the list of permissible businesses by Banks. ? Also list the businesses that are prohibited for any bank to undertake. Are there any exceptions to this prohibitions?
?
What the various categories of constitutions of banks?
?
? ? ? ?
What the various categories of constitutions of banks? Body corporate – under special statutes Companies – Cos Act 1956 Foreign Companies Corporative Banks – Corporative Societies Act
?
Include
? Nationalised banks [Banking Companies (Acquisition & Transfer of Undertaking) Act 1970 & 1980) ? SBI & its associates [SBI Act 1954] ? Regional Rural Banks [RRB Act 1974]
?
? ? ?
Banking company defined in Sec 5(e) of BRA – as a company that transacts business of banking Incorporated under the Sec 3 of the Companies Act 1956 Foreign Banks registered under Sec 591 of the Companies Act 1956 These banks are governed by Cos Act in respect of their constitution & as reagard their business – BRA & RBI Act
?
Registered under:
? Central Act, Multi-Units Cooperative Societies Act – for multi state cooperative banks ? State Act – for single state
?
Group Assignment:
? List all banks, except for all cooperative banks, as per their constitution ? Get details of these banks – registered office, no of branches, CMD, size of the bank, etc.
?
Enacted to:
? Regulate the issue of Bank notes ? For keeping reserves for securing monetary stability in India ? Operate the currency & credit system of the country
?
Subsequent amendments increased the scope of RBI
?
Subsequent amendments increased the scope of RBI to include:
? Incorporation, capital management & business of banks ? Management of forex forex reserves ? Collection & furnishing of credit information ? Financial supervision of banks & FIs ? Publication of bank rate, reserve fund, credit funds, etc. ? Audit & accounts of Banks ? Penalties for violations of the provisions of the Act
?
Individual Assignment:
? What is the management structure of RBI? ? Where are its offices located? ? What are the various denomination of currency it prints? ? By what means does it lend to Govt.?
? ? ?
Provide regulation of Banking Industry The Act does not apply to agricultural credit societies & cooperative land development banks Act:
? Regulates entry into banking business by licensing ? Puts restrictions on shareholding, directorship, voting powers, & other aspects of banking companies ? Can regulate – loans & advances, rates of interest, audit, inspection, submission of balance sheets, ? Control over management of Banks, ? Winding up procedures ? Penalties for violation
?
Can Govt. regulate the Banks?
?
Which are the other Authorities?
doc_572484151.pptx
Commercial Banking and India
? ? ? ? ?
Definition and nature of Banking Constitution of different types of Banks Regulatory Scheme Role of RBI & Govt. PSBs & Cooperative Banks
?
Which are the laws that govern the Banking Industry?
?
Which are the laws that govern the Banking Industry? Banking Regulation Act 1949 RBI Act 1934 Through these laws, RBI & GOI exercise control over Banks
? ? ?
?
?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its __________.
?
? ?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its constitution What are the types of constitutions?
?
?
All regulatory provisions are not uniformly applicable to all banks Applicability depends on its constitution – statutory corporation, banking company or corporative society.
?
What is the definition of Banking?
? ?
What is the definition of Banking? Acceptance of deposits of money from public for the purpose of ________.
? ? ?
?
What is the definition of Banking? Acceptance of deposits of money from public for the purpose of lending and investment. Such deposits – repayable on demand or for period of time agreed by the banker & customer. Withdrawal by cheque, draft, order, etc.
?
Accept “deposits” how?
? ?
?
Accept “deposits” how? Accept “deposits” in form of money and nothing else. What does “public” imply?
? ?
?
What does “public” imply? Public – accepts deposits from anyone who offers money for such purpose. Can the Bank refuse to accept from any person?
? ? ?
Can the Bank refuse to accept from any person? A banker can refuse to open an account of an undesirable person/ entity Opening of an account is subject to certain stringent conditions these days to curb flow of money to finance terrorism.
?
Can anyone other than a bank accept deposits withdrawal by cheque?
?
?
Can anyone other than a bank accept deposits withdrawal by cheque? No
?
?
?
Non-banking companies, firms & other unincorporated associations of persons and individuals can accept deposits from public. Acceptance of deposits is regulated by RBI under Chapter IIIB of RBI Act. Other companies are regulated by Central Govt. under Companies (Acceptance of Deposit) Rules – under section 58 of Companies Act.
?
?
Other unincorporated associations of persons, firms and individuals whose principal business is lending or acceptance are now prohibited under section 45S of RBI Act (1997 amendment) to accept deposits from public, except relatives. This prohibition does not apply to those who are mainly engaged in manufacturing or trading.
?
?
A separate statute has been introduced for regulation of financial companies and redressal of grievances of depositors of such companies (Financial Companies Regulation Bill 2000 pending approval) The bill also aims to prohibit acceptance of deposits by individuals and unincorporated associations of individual, except for loans from relatives.
?
?
?
Necessary to have a licence from RBI for commencing or carrying on the business of banking (Sec 22 BRA) Every Bank must use the word “Bank” as part of their name. Can any other company use the word “Bank”, “Banking”, “Banker” in its name?
?
? ?
Can any other company use the word “Bank” in its name? No. Any Exceptions?
? ?
Any Exceptions? Subsidiaries of banks & associations of banks.
?
What are the permitted businesses of Banks?
? ? ? ?
What are the permitted businesses of Banks? Borrowing, raising or taking up money Lending or advancing money – with or without security Drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hundis, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, CDs, Scrips, & other instruments & securities tranferable or negotiable or not
?
Individual Assignment:
? The list above is indicative. Prepare the list of permissible businesses by Banks. ? Also list the businesses that are prohibited for any bank to undertake. Are there any exceptions to this prohibitions?
?
What the various categories of constitutions of banks?
?
? ? ? ?
What the various categories of constitutions of banks? Body corporate – under special statutes Companies – Cos Act 1956 Foreign Companies Corporative Banks – Corporative Societies Act
?
Include
? Nationalised banks [Banking Companies (Acquisition & Transfer of Undertaking) Act 1970 & 1980) ? SBI & its associates [SBI Act 1954] ? Regional Rural Banks [RRB Act 1974]
?
? ? ?
Banking company defined in Sec 5(e) of BRA – as a company that transacts business of banking Incorporated under the Sec 3 of the Companies Act 1956 Foreign Banks registered under Sec 591 of the Companies Act 1956 These banks are governed by Cos Act in respect of their constitution & as reagard their business – BRA & RBI Act
?
Registered under:
? Central Act, Multi-Units Cooperative Societies Act – for multi state cooperative banks ? State Act – for single state
?
Group Assignment:
? List all banks, except for all cooperative banks, as per their constitution ? Get details of these banks – registered office, no of branches, CMD, size of the bank, etc.
?
Enacted to:
? Regulate the issue of Bank notes ? For keeping reserves for securing monetary stability in India ? Operate the currency & credit system of the country
?
Subsequent amendments increased the scope of RBI
?
Subsequent amendments increased the scope of RBI to include:
? Incorporation, capital management & business of banks ? Management of forex forex reserves ? Collection & furnishing of credit information ? Financial supervision of banks & FIs ? Publication of bank rate, reserve fund, credit funds, etc. ? Audit & accounts of Banks ? Penalties for violations of the provisions of the Act
?
Individual Assignment:
? What is the management structure of RBI? ? Where are its offices located? ? What are the various denomination of currency it prints? ? By what means does it lend to Govt.?
? ? ?
Provide regulation of Banking Industry The Act does not apply to agricultural credit societies & cooperative land development banks Act:
? Regulates entry into banking business by licensing ? Puts restrictions on shareholding, directorship, voting powers, & other aspects of banking companies ? Can regulate – loans & advances, rates of interest, audit, inspection, submission of balance sheets, ? Control over management of Banks, ? Winding up procedures ? Penalties for violation
?
Can Govt. regulate the Banks?
?
Which are the other Authorities?
doc_572484151.pptx