PAPER 3 – LEGAL & REGULATORY ASPECTS OF BANKING
It Consist of 4 Module
MODULE A –
REGULATIONS AND COMPLIANCE
Legal Framework
of Regulation of Banks
Business of Banking; Constitution
of Banks; RBI Act, 1934; Banking Regulation Act, 1949; Role of RBI; Govt. as
a Regulator of Banks; Control over Co-operative Banks; Regulation by other Authorities.
Control over
Organization of Banks
Licensing of Banking Companies;
Branch Licensing; Paid up Capital and Reserves; Shareholding in Banking
Companies; Subsidiaries of Banking Companies; Board of Directors;
Chairman of Banking Company; Appointment of Additional Directors; Restrictions on Employment; Control over Management; Corporate Governance; Directors
and Corporate Governance.
Regulation of
Banking Business
Power of RBI to Issue Directions;
Acceptance of Deposits; Nomination; Loans and Advances; Regulation of
Interest Rate; Regulation of Payment Systems; Internet Banking
Guidelines; Regulation of Money Market Instruments; Banking Ombudsman; Reserve Funds;
Maintenance of CRR, SLR; Assets in India.
Returns
Inspection, Winding up, Mergers & Acquisitions
Annual Accounts & Balance
Sheet; Audit & Auditors; Submission of Returns; Preservation of Records and
Return of Paid Instruments; Inspection and Scrutiny; Board for Financial Supervision;
Acquisition of Undertakings; Amalgamation of
Banks; Winding up of Banks;
Penalties for offences.
Public Sector
Banks and Co-operative Banks
SBI and its Subsidiaries;
Regional Rural Banks; Nationalized Banks; Application of BR Act to Public Sector Banks;
Disinvestment of Shares by Govt.; Co-operative Banks.
Financial Sector
Legislative Reforms
Need, Approach for Financial
Sector Legislative Reforms; Important Reforms.
Recent
Legislative Changes in RBI Act
Recent Legislative Changes in RBI
Act, Need there of
Financial Sector
Development Council
Role and Functions of Financial
Sector Development Council
MODULE B – LEGAL
ASPECTS OF BANKING OPERATIONS
Different Types
of Borrowers
Types of Borrowers; Limited
Liability Partnership
Types of Credit
Facilities
Cash Credit, Overdraft, Demand
Loans, Term Loans, Bill Finance
Secured and
Unsecured Loans, Registration of Firms and Incorporation of Companies
Definition of Secured and
Unsecured loans; Need for Secured Loans; Registration of Firms; Consequences of
Non-registration of Firms; Incorporation of a Company
Indemnities
Definition of Contract of
Indemnity; Features of Indemnity Contract & Guarantee; Scope and Application of
Indemnity Contracts to Banks; Obligations of a Banker; Precaution & Rights of an
Indemnity Holder.
Bank Guarantees
Definition and Types of Bank
Guarantees; Banker’s Duty to Honour Guarantee; Precautions to be taken for
Issuance of Bank Guarantee; Precautions to be taken for Payment under Bank Guarantee;
Invocation & Enforcement.
Letters of
Credit
General Considerations of Letters
of credit; Parties to a Letter of credit; Types of Letters of credit; Documents
under a Letter of credit; UCPDC 600; Banks obligation for payment of Letter of credit.
Deferred Payment
Guarantees
Purpose of DPGs; Methods of
Payment.
Laws Relating to
Bill Finance
Class of Bills and Laws Governing
Bills; Classification of Bills; Categories of Bill Finance; Bill Finance and Legal
Position of Banker.
Various Types of
Securities
Types of Securities; Escrow
Arrangements; Trust and Retention Arrangements.
Laws Relating to
Securities and Modes of Charging – I
Mortgage; Types of Mortgage;
Enforcement of Mortgages
Laws Relating to
Securities and Modes of Charging – II
Lien; Pledge; Hypothecation; etc.
Registration and
Satisfaction of Charges
Definition of Charge; Procedure
for Registration of Charge; Effect of Nonregistration of Charges; Provisions of Law
relating to Registration of Charges.
Case Laws on
Responsibility of Paying Bank
Negotiable Instruments Act and
Paying Banks; Liability of Paying Banker; Payment in due course; Payment in Good
Faith; Whether Payment under Mistake Recoverable.
Case Laws on
Responsibility of Collecting Bank
Statutory protection to
Collecting Bank; Duties of Collecting Bank.
MODULE C –
BANKING RELATED LAWS
Recovery of
Debts due to Banks and Financial Institutions Act, 1993(DRT Act)
Objective of the Act,
Constitution of Tribunal, Procedure to be followed, Enforcement process.
Securitisation
and Reconstruction of Financial Assets and Enforcement of Securities
Interest Act (SARFAESI)
Constitutional Validity;
Definitions; Regulation & Reconstruction; Enforcement of Security Interest; Central
Registry; Offences & Penalties; Miscellaneous Provisions.
Banking
Ombudsmen Scheme
Purpose; Extent; Definitions;
Establishment; Powers; Procedure for Redressal Grievance.
Bankers Books
Evidence Act, 1891
Applicability; Definition;
Important Provisions.
The Legal
Services Authorities Act, 1987
Lok Adalats- Organisation;
Jurisdiction; Disposal of Cases; Awards
The Consumer
Protection Act, 1986 and CERSAI
Preamble, Extent &
Definitions; Consumer Protection Councils; Consumer Disputes Redressal Agencies;
Objectives and important provisions of Central Registry of Securitisation Asset Reconstruction and Security Interest of India.
The Law of
Limitation
Definition; Computation of
Limitation; Important Provisions in schedule to the Limitation Act.
Tax Laws
Income Tax; Commodity Transaction
Tax; Service Tax
Negotiable
Instruments Act, 1881
Applicability; Definition;
Important Provisions
Payment &
Settlements Systems Act, 2007
Applicability; Definition; Important
Provisions
MODULE D –
COMMERCIAL LAWS WITH REFERENCE TO BANKING OPERATIONS
Indian Contract
Act, 1872
Meaning and essentials of
contract; Contract of Indemnity & Rights of Indemnity Holder; Contract of Guarantee;
Contract of Bailment; Contract of Pledge; Contract of Agency.
The Sale of
Goods Act, 1930
Features; Sale & Agreement to
Sell; Conditions and Warranties; Express & Implied; Rights of Unpaid Seller.
Indian
Partnership Act, 1932
Definition & Types of
Partnerships; Relation of partners to one another & to third Parties; Minor admitted to
benefits of partnership; Dissolution of a firm; Effect of non registration; Limited liability
partnerships formation, registration, rights and
liabilities of partners.
Definition and
features of a company
Definition & Features of a
Company; Distinction between Company and Partnership
The Companies
Act, 1956 (Now Companies Act, 2013 )
Definition, Features & Types
of companies; Memorandum and Articles of Association; Doctrine of Ultra
Vires, Constructive Notice, Indoor Management; Membership of Company Acquisition, Cessation, Register, Rights & Duties of Members, Prospectus; Directors;
Winding up of Companies.
Foreign Exchange
Management Act, 1999
Important Terms; Powers of RBI,
Regulation and Management; Directorate of Enforcement.
Transfer of
Property Act, 1882
Sale, Mortgage of Immovable
Property; Types of Mortgages; Sale with and without court intervention; Lease of
Immovable Property.
The Right to
Information Act, 2005
Applicability; Definition;
Important Provisions.
Right to
Information and Obligation of Public Authorities
Obligations; Procedure; Disposal;
Appeal; Orders; Penalties.
The Prevention
of Money Laundering Act, 2002
Obligations; Records to be
Maintained; Procedure for Maintaining & Furnishing Information; Maintenance &
Verifications of Records of Identity of Clients.
Information
Technology Act, 2000
Definitions; Electronic
Governance; Certifying Authorities; Digital Signature Certificates; Penalties; Appeal.
