This document summarizes key regulations for banks in India regarding liquid asset maintenance, statutory liquidity ratio (SLR), cash reserve ratio (CRR), restrictions on loans and advances, penalties for non-compliance, bank liabilities, and management requirements. It states that banks must maintain 25% of their time and demand liabilities as liquid assets like gold or government securities (SLR), and a specified fraction of total deposits as reserves with the Reserve Bank of India (CRR). It also outlines penalties for banks, restrictions on certain types of loans, required disclosures, and composition of the board of directors.

1. MAINTENANCE OF LIQUID ASSETS

2. Sec 24 of Banking Regulation Act 1983
• Every Banking Company in India has to
maintain the following liquid assets:
- Statutory Liquidity Ratio (SLR)
- Cash Reserve Ration (CRR)

3. Statutory Liquidity Ratio (SLR):
• Amount of liquid assets such as precious
metals(Gold) or other approved securities, that
commercial banks in India require to maintain as
reserves other than the cash.
• SLR is used to limit the expansion of bank credit,
for ensuring the solvency of banks (even if all the
loans by the bank go bad, the bank can still
retrieve a part of it by selling the
gold/govt. securities
• In India SLR has to be 25% of its time liabilities &
demand liabilities

4. CONCEPTS
• Time liabilities are liabilities which the banks
are liable to pay after a certain period of time.
E.g. 1 year fixed deposit
• Demand liabilities are liabilities which the
banks are liable to pay on being demanded by
the customer. E.g. A savings account

5. Cash Reserve Ratio (CRR):
• Cash Reserve Ratio (CRR) is a specified
minimum fraction of the total deposits of
customers, which commercial banks have to
hold as reserves either in cash or as deposits
with RBI. CRR is set according to the
guidelines of RBI
• The ratio is decided by RBI from time to time

6. RESTRICTIONS ON LOANS AND
ADVANCES

7. Sec 20 of the Act lays down following
restrictions
• On security of its own shares
• On behalf of director
• Any firm/ or subsidiary/holding company in
which director is partner, manager, employee
or guarantor
• Any individual in respect of whom any of its
director is a partner/guarantor

8. FINES & PENALTIES

9. • False statement/omits any imp statement- 3
years Jail+ fine
• Non-disclosure of books of accounts/documents-
Rs. 500/offence, Rs. 50/day
• As per sec 35,any deposit against the law, every
director/officer will be fined twice the amt of
deposits
• Any other provisions against the law (default by a
person)-fine 50000/ twice of default..with further
2500 per day
• Default by company- every person included will
be punishable

10. LIABILITIES

11. • Non disclosure of books, accounts or docs
• True copy of instruments of customers
• Full discharge of depositors money
• Notice of claims of depositors shall be
receivable
• Safe custody- nominee after death
• Any damage caused due to access to locker-
no suit will be laid
• Fake-misleading docs etc-fine

12. MANAGEMENT

13. Constitution of BOD:
• Sec 10 provides that every banking company is
required to constitute its board of directors in such a
way that not less than 51 % of the total number of
members consist of,
a) special knowledge or practical experience in
Accountancy, agriculture , rural economy, banking,
economics and law. At least 2 of them have in
cooperation and small scale industry.
b) No substantial interest or connection with anyone of
any company or firm.
• Any director of the company can hold the office
continuously for the period not exceeding 8 years.

14. Chairman
• One with special knowledge, experience as a
banker and member of BOD
• He is required to be as its whole time
employer
• He shall hold the office for a period not
exceeding 5 years.
• Appointment must be to the satisfaction of
RBI

15. Thank you