RBI ACT 1934

RBI ACT 1934 (useful some sections)

1.SCHEDULE 2 (E): SCHEDULE BANK MEANS A BANK WHOSE NAME IS INCLUDED IN THE 2^ND SCHEDULE OF RBI ACT 1934.

2. SEC17:    DEFINE VARIOUS TYPES OF BUSINESS WHICH   RBI MAY TRANSIT WHICH INCLUDE ACCEPTANCE OF DEPOSIT WITHOUT INTEREST FROM CENTRAL/STATE GOVT.

3. SEC18:     RBI PROVIDES EMERGENCY LOANS TO BANKS ON LIABLE TERMS.

4. SEC20:    BANKER TO THE GOVT.

5. SEC21:   RBI HAS THE RIGHT TO TRANSACT GOVT.BUSINESS IN INDIA.

6. SEC24:    DENOMINATION OF NOTES. CENTRAL GOVT CAN DISCONTINUE OR       NON ISSUE OF BANK NOTES. LIKE  2, 5.

7. SEC26:  BANK NOTES ISSUED BY RBI SHALL BE LEGAL TENDER AND   SHALLBE GUARANTEED BY CENTRAL GOVT.

8. SEC29:   BANK NOTE SHALL BE EXEMPTED FROM STAMP DUTY UNDER INDIAN STAMP ACT.

9. SEC 33: ISSUER OF CURRENCY NOTES BACKED BY GOLD AND FOREX RESERVE.

10. SEC42:  CRR SHOULD BE MAINTAINED BY SCBS IN RBI.

11. SEC42(C): EMPOWERS RBI TO ADD OR DELETE THE NAME OF ANY BANK IN 2^ND SCHEDULE OF RBI ACT 1934

12. SEC45H-45T: REGULATION RELATING TO NBFC.

13.   SEC48: EXEMPTION TO RBI FROM PAYING INCOME TAX OR SUPER TAX.

14.   SEC49: ANNOUNCE/PUBLISH BANK RATE.

shadow banking

Shadow banking is a universal phenomenon, although it takes on different forms. In advanced economies where the financial system is more matured, the form of shadow banking is more of risk transformation through securitization; while in the economically backward economies where financial market is still in a developing stage, the activities are more of supplementary to banking activities. However, in both the structures, shadow banking operates outside the regular banking system and financial intermediation activities are undertaken with less transparency and regulation than the conventional banking. In a sense, shadow banks are like icebergs - more deeply spread than what they seem to be.shadow banks raise funds, by and large, through market-based instruments such as commercial paper, debentures, or other structured credit instruments.The liabilities of the shadow banks are not insured, while commercial banks’ deposits, in general, enjoy Government guarantee to a limited extent.The type of entities which are called shadow banks elsewhere are known in India as the Non-Banking Finance Companies (NBFCs). Are they in fact shadow banks? No, because these institutions have been under the regulatory structure of the Reserve Bank of India, right from 1963 i.e. 50 full years before many in the world are thinking of doing so!The ‘NBFCs’ of India include not just the finance companies, but also a wider group of companies that are engaged in investment, insurance, chit fund, nidhi, merchant banking, stock broking, alternative investments etc. as their principal business. NBFCs being financial intermediaries are playing a supplementary role to banks. NBFCs especially those catering to the urban and rural poor, namely NBFC-MFIs and Asset Finance Companies have a complimentary role in the financial inclusion agenda of the country. Further, some of the big NBFCs viz; infrastructure finance companies are engaged in lending exclusively to the infrastructure sector, and some are into factoring business, thereby giving fillip to the growth and development of the respective sector of their operations. In short, NBFCs bring the much needed diversity to the financial sector.

To summarise, the shadow banks in India (i.e. the NBFCs) are of a different type; they have been under regulation for more than 50 years; they subserve the economy by playing a complimentary and supplementary role to mainstream banks and also in furthering financial inclusion. Yet, they do pose dangers, but of different variety; it primarily relates to consumer protection. It is the constant endeavour of Reserve Bank to enable prudential growth of the sector, keeping in view the multiple objectives of financial stability, consumer and depositor protection, and need for more players in the financial market, addressing regulatory arbitrage concerns while not forgetting the uniqueness of NBFC sector.

BANKING REGULATION ACT 1949

BANKING REGULATION  ACT 1949

1.       SEC5-B: BANKING-BANKING MEANS ACCEPTING FOR THE PURPOSE OF LENDING OR INVESTMENT OF DEPOSITS OF MONEY FROM PUBLIC REPAYABLE ON DEMAND OR OTHERWISE AND WITHDRAWABLE ANY CHEQUE, DRAFTS ORDER OR OTHERWISE.

2.       SEC5F: DEMAND LIABILITIES WHICH MUST BE MET ON DEMAND AND TIME MEANS LIABILITIES WHICH ARE NOT DEMAND LIABILITIES.

3.       SEC 6-1:BANKING BUSINESS(ACCEPTING DEPOSIT,DEALING IN BILLS ,COLLECTION OF BILLS,BORROWING MONEY,LENDING MONEY,MORTGAGES,INSURANCE BUSINESS).

4.       SEC19: PERMITS BANKS TO FROM SUBSIDIARY COMPANY FOR CERTAIN PURPOSES.

5.       SEC20: BANKS CANNOT GRANT LOAN AGAINST SECURITY OF THEIR OWN SHARES.

6.       SEC21A: RATE OF INTEREST CHARGED BY BANK ARE NOT SUBJECT TO SCRUTINY BY COURTS .

7.       SEC22: LICENSING OF BANKING COMPANIES- OBTAINING OF LICENCE FROM RBI IS ESSENTIAL.

8.       SEC24:SLR

9.       SEC26:UNCLAIMED DEPOSIT

10.   SEC30I: AUDITED BY QUALIFIED AUDITORS.

11.   SEC36: RBI CAN TERMINATE ANY CHAIRMAN OR ANY EMPLOYEE OF BANK WHERE IT CONSIDERS DESIRABLE TO DO SO.

12.   SEC45: SUSPENSION OF BANKING BUSINESS.

13.   SEC ZA-ZF: NOMINATION FACILITIES.

14.   SEC52: CENTRAL GOVT CAN MAKE RULES FOR ALL MATTER.

INTERVIEW QUESTION

                                                                                INTERVIEW

1.       WHAT IS BANKING?

2.        WHAT IS CROSS SELLING?

3.       WHAT IS RETAIL BANKING?

4.       WHAT IS CAR?

5.       WHAT IS CRAR?

6.       WHAT IS ICAAP?

7.       WHAT IS SREP?

8.       WHAT IS LAF?

9.       WHAT IS NARROW MONEY AND BROAD MONEY?

10.   WHAT IS DICGC,ECGC,EXIM,EXIM,NABARD?

11.   WHAT IS CAMELS RATING?

12.   WHAT IS SMALL BANK AND PAYMENT BANK?

13.   WHAT IS DEAF SCHEME?

14.   WHAT IS PRADHAN MANTRI JAN DHAN YOJNA?

15.   WHAT IS BANKING OMBUDSMAN?

16.   WHAT IS CREDIT CONTROL?

17.   WHAT IS REPO,REV REPO,BANK RATE,MSF,MSS,OMO?

18.   WHAT IS CUSTODIAN OF FOREX?

19.   WHAT IS BASEL?

20.   WHAT IS ASBA?

21.   WHAT IS IPO,FPO,RIGHT ISSUE,OPTION,FUTURE,FORWARD,DERIVATIVE,DEMAT,BLUECHIP,MF,CAPITAL GAIN,DEVENTURE,INDEX?

22.   WHAT IS MONEY MARKET INSTRUMENT?CD,CP,TBILLS.

23.   WHAT IS PRIRITY SECTOR LENDING?

24.   WHAT IS SHG,

25.   WHAT IS DEVALUATION, DEPRECIATION?

26.   WHAT IS BPL CRITERIA (URBAN-1407,RURAL-1000)

27.   RRB CONTROLLED BY WHOM?-NABARD

28.   WHAT IS PURA?

29.   WHAT IS HOT MONEY,NEAR MONEY,COMMODITY MONEY,TOKEN MONEY,

30.   WHAT IS DISINVESTMENT?

31.   WHAT IS DEF BETN ADVANCE AND LOAN?

32.   WHAT IS SHADOW BANKING?

33.   WHAT IS PARABANKING?

34.   WHAT IS NBFC?
35.   CURRENCY CHEST?
36.  **DIF BET RD AND FD?
37.  DIF BET SA AND CA?
38.  *ABOUT NEW BANKING LICENCE?
39.  **ABOUT NPA?
40.  **ABOUT BASEL?
41.  **FINANCIAL INCLUSION?
42.  WHAT IS SHG AND JLG?
43.  ABOUT FUND TRANSFER
44.  ABOUT CHEQUE AND DEMAND DRAFT,BANK GUARANTEE,
        LETTER OF CREDIT,BANK GUARANTEE 

45.  BANKER CUSTOMER RELATIONSHIP
46.WHAT IS NARROW BANKING?
47.WHAT IS CBS?
48.WHAT IS THE DIF BETN WHITE LEVEL AND BROWN LEVEL ATM?
49.WHAT IS MOBILE BANKING AND INTERNET BANKING?
50. DIF BETN CA AND SA?
**51. NI ACT 1881?
52. NITI AAYOG?
53. RBI FUNCTIONS ?