Friday, 26 May 2017

Banking regulation act, 1949 - Important General Knowledge (GK) Facts

Hello readers, Banking regulation act, 1949 - Important General Knowledge (GK) Facts Facts related to boost your General Knowledge for competitive exams.

Banking regulation act, 1949 - Important General Knowledge (GK) Facts

The Banking Regulation Act 1949 is applicable throughout the country. In addition to this Act, all those who are involved in banking are acting as a supplementary act. Like the Negotiable Instrument Act, Company Act 1956, which was passed as the banking company Act 1949. This act, passed in the Banking Companies Act, 1949, came into light on 16 March 1949, and the same Act became changed on March 01, 1966 as the Banking Regulations Act 1949. It is important that this Act was effected in Jammu and Kashmir in the year 1956. Banking Regulation Act is not suitable in respect to primary agricultural, credit societies, non-agricultural committees and cooperative land mortgage banks.


Definitions :

Banking - Banking means accepting money from the public as a deposit amount. These deposits or investments, loan and demand etc. are done to fulfill the tasks. These currencies can be withdrawn through drafts or checks etc.

Banking company - The banking company is a company that completes banking business in India. This company resolves the issues of the states which have been given in the Companies Act,

Business permission for a banking company (Section 6)

• To lend security / unrecognized / and to get money on lending, issuing passenger checks and foreign currency notes. And, buying and transferring the deposit and transferring it and purchasing securities (bonds and other securities) from customers.
• Doing business of all types of guarantees and editing financial operations and indemnity business.
• Selling, managing the claims of the property of the bank, which is necessary to be obtained in the context of its occupation.
• Editing all the tasks of the Trust's undertakings.
• Editing the necessary tasks for the company's development and growth. Also work for his progress.
• To execute business activities which are given in government notifications and defined by it.

Prohibition on Trade (Section 8)

According to this clause no banking company can directly or indirectly manage the activities related to the purchase or sale of any item or its exchange.

Disposal of Non Banking Assets (Section 9)

In respect of the repayment of the bank borrowings, no bank can keep any property for a period of more than seven months in relation to the settlement of debts or liabilities. If considered necessary, this period can be extended by the Reserve Bank of India for this period again for 5 years.

Reserve Fund (Section 17)

Every banking company should save / produce more amount than the amount received in tax and interest. The reserve amount should be up to 20 percent at any rate of the benefit amount of the bank. If the cumulative amount of reserve fund and securities premium is more than the total paid up capital of the company, then this can be exempted in this regard.

Cash Reserve (Section 18)

About 3% of the total demand and liabilities should be secured in the current account in the form of cash reserve with Reserve Bank of India. This liability will not be included in the amount received from Reserve Bank of India / Exim Bank / Development Bank or any other bank. It should be noted that this amount should be kept / deposited on the last Friday of the second fortnight of every month. This withdrawal should be deposited by Reserve Bank of India before the twelfth day of every month.

Accounting & Balance Sheet (Section 29)

Banking companies should formulate a reference plan for the balance sheet and profit and loss account on the last working day of every accounting year for the prescribed forms in the third schedule. Above the account where there are three directors from the directors, the sign should be signed by the three directors. If the number of directors is up to three, then all the directors of the same position must be signed. In the case of a corporate banking company outside the nation, this signature should be signed by the head of the accounts or the manager of the company in India.

Audit of banking company (Section 30)

1. Accounts related to balance sheets and profits and losses should be audited in accordance with Article 29 by an auditor who is a qualified person under the law and ready to discharge his duties, should be audited.

2. Banking company has to get an approval from the Reserve Bank of India in respect of the appointment / re-appointment / auditors.

3. If the Reserve Bank of India is not satisfied with the financial facts of the bank, then it may order special order for the examination of the data related to the bank's account. And the total expenditure in this regard will be disbursed to the banking company itself.

4. The auditor's obligations, powers and subject areas are described in Section 227 of the Companies Act, 1956.

Additional disclosure requirements
  • If the information given is correct and the transaction done by the company comes under the purview of the powers of the companies. So fair and right approach should be adopted by the company.
  • asset protection
  • If there is any other thing to be disclosed if needed
  • This kind of report of the auditor should be presented to the Reserve Bank in three copies in a prescribed manner. If the Reserve Bank of India considers it appropriate, it can increase the return period of this equipment up to three months.

Thank You. All the Best.

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