BAnking regualtion act detailed ppt related to important sections and its explanations

2. 1. Nationalised banks
2. Non-nationalised banks
3. Cooperative banks

3.  Stability and standing of banking institutions.
 Dual control:
1. Entry
2. Expansion

4. S.
No.
Parts Topics Sections
covered
1. I Preliminary 1 to 5A
2. II Business of Banking Companies 6 to 36 A
3. IIA Control over management 36AA to 36AC
IIAB Supersession of Board of Directors of Banking
Company
36ACA
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. V Application of the Act to cooperative Banks 56

5.  Definition of ‘banking’ and ‘banking company’ [S. 5(b) and 5(c)].
 Business of banking company [S. 6]

6.  Section 7: use of words “ bank”, “banker”, “banking” or
“banking company”.
 Section 8: prohibition of trading

7.  Sections 10, 10A, 10B, 10BB, 10C, 10D
 Sections 36AA,36AB, 36AC, 36ACA

8.  No banking company:
1. Employ or be managed by a managing agent or
2. Will have employ following persons:
a. Who are adjudicated insolvent or convicted
b. Whose remuneration comes in form of commission or share
in profit.
c. Whose remuneration is excessive in opinion of RBI.

9. 3. Shall be managed by a person who is
a. Director of a subsidiary of the banking company or
b. A company registered under Section 25 of ICA.
(A temporary director with such a profile can be appointed for not
more than a period of 3 months)
c. Person engaged in any other business or vocation
d. When term of appointment has exceeded 5 years.

10.  Minimum 50% of the BOD shall have special knowledge or practical
experience in any of the following:
1. Accountancy
2. Agriculture and rural economy
3. Banking
4. Co operation Not less
than 2 in
agr, rural,
cooperation or small
scale industry
5. Economics
6. Finance
7. Law
8. Small scale industry
9. Any other important area as in opinion of RBI.

11.  Shall not:
1. have a substantial interest , or employee, manager or managing
agent in
a. Any company , not being company under Section 25, Companies Act
b. Any firm which is not a small scale industrial concern
c. Proprietor of business which is not a small scale industrial concern

12.  No director, other than chairman or whole time director shall hold
office exceeding 8 years.
 A chairman or whole time director who has been removed from the
position under this Act shall not be reappointed as a director for a
period of 4 years.
 If any of the requirements are not fulfilled then the same shall be
re constituted.

13. I
 One director shall be appointed on whole time or a part time basis
as chairman of the BOD.
 Appointed on whole-time basis- entrusted with the management of
whole of the affairs of the banking company.
II
When part time:
 When previous approval of RBI
 Management shall be entrusted to a managing director.

14. 1. when the position has been vacant for some time
2. RBI can appoint a whole time director or managing director.
4. Shall hold office for a period not exceeding 3 years.
5. Shall draw pay and allowances from RBI

15.  Section 10C: chairman and certain directors not to hold
qualification shares. [Qualification shares are the minimum
number of shares a person must own, as provided in the articles of
the company, in order to qualify to become a director of the
company.]
 Section 10D: provisions of Section 10A & 10 B to override all other
laws. [any such person shall not be entitled to claim any
compensation for the loss or termination of office]

16.  No director who is already a director in any other banking
company.

17.  Sections 36AA,36AB, 36AC, 36 ACA
 Section 36AA: Power to remove
1. Where necessary due to interest of the depositors or for
securing the proper management.
2. by a written order remove any chairman, director, chief
executive officer or any other officer.
3. Reasonable opportunity of making representation has to be
given.

18. 4. Against such an order an appeal can be made within 30 days to
the central government.
5. Such a decision of the central govt shall be final and shall not
be called into question in any court.
6. Such an official shall not be able to be directly or indirectly be
appointed again for a period of 5 years.

19. 1. If RBI is of the opinion that in interest of the banking policy
or in public interest of the bank or depositors.
2. Additional director shall hold the office
 During the pleasure of the RBI
 For a period not exceeding 3 years

20.  RBI in consultation with Central Govt.
 In public interest or for preventing the affairs of any banking
company being conducted in a manner detrimental to the
interest of the depositor or any banking company or for
securing proper management .
 By reason in recording, supersede BOD for a period not
exceeding 6 months.

21.  This can be extended for 12 months.
 An administrator may be appointed with consultation of Central
Govt.
 Committee can be appointed to assist the administrator.
 Before 2 months of expiry of the period of suspension, a general
meeting shall be called on by the adm. to elect new managerial
officials and BOD.