This document provides an overview of banking and banking law in India. It defines banking as accepting deposits from the public for lending or investment. It describes different types of banking systems and notes that banking is regulated through legislation like the Banking Regulation Act of 1949. The Act establishes the framework for banking business and regulations. It also discusses the role of the Reserve Bank of India and how banks support economic development through activities like financing agriculture, trade, and industry.

1. Banking and Insurance Law

2. Banking System
Banking system occupies an important place in a nation’s economy.
Bank is indispensable institution in a modern society.

3. Definition of Banking
The term “Banking” is defined as “accepting, for
the purpose of lending or investment, of deposits of
money from the public, repay able on demand or
otherwise and withdrawable by cheque, draft”.

4. Banking System
 Branch banking System
 Unit Banking System
 Group Banking System
 Chain Banking
 Deposit Banking System
 Mixed Banking System
 Pure Banking System

5. Banking Legislation in India
 Banking business its own distinctive features as compared to all other
trades and business.
 A banking company deals mainly with the money of a large number of
depositors, who have hardly any say in the conduct of the affairs of the
company.
 Banking regulation Act 1949, is the main piece of central legislation in
India embodying such specific provisions relating to the banking
business.

6. The law relating to banking, as we find in India today,
is the outcome of the gradual process of evolution. Before
1949 the Indian Companies Act 1913, contained special
provisions relating to banking companies, which were felt
inadequate and were subsequently incorporated in the
comprehensive legislation passed in 1949 under the name
of Banking Companies Act ( re-designated as the Banking
Regulation Act in 1966).

7. Banking Regulation Act, 1949
Main Provisions of the BR Act 1949
 Part I – preliminary (Sec 1 to 5 A)
 Part II – Business of Banking Companies.
 Part II A – Control and Management
 Part II B – Prohibition of certain in relation to banking companies.
 Part II C – Acquisition of the Undertakings of Banking Companies in
certain cases.
 Part III – Suspension of Business and Winding up of Banking
Companies.

8.  Part III A – Special provisions for speedy disposal of
winding up proceedings.
 Part IV – Miscellaneous
 Part V – Main Provisions as applicable to co-operative
banking.

9. Reserve Bank of India Act 1934
Main Provisions of the RBI Act 1934
 Loans and Advances from the Reserve Bank
 Maintenance of Statutory Reserves by the scheduled
banks.
 Collection and furnishing of credit information.

10. Role of Banks in Economic Development
 Capital formation = 20,00,000 – 10,00,000 = 10,00,000
 Financing Agriculture
 Financing trade
 Financing Industry
 Financing Employment
 Supporting Monetary Policy
 Assist in Innovations
 Banks Influence the Interest Rate
 Priority sector
 Implementation of the policies of the Govt.

11. Functions of Central Bank / RBI
 Issue and Regulation of currency
 Banker, Agent and Advisor to the Govt.
 Custodian of foreign exchange reserves
 control of credit
 research and data collection
 control money supply
 minimum reserve system
 clearance, settlement and transfer.
 Provide long term finance

12. Thank You….