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Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.

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Q

Which section of the Banking Regulation Act, 1949 empowers RBI to issue directions to banks in public interest?

A

Section 35A of the Banking Regulation Act, 1949 empowers RBI to issue directions to banking companies in public interest, interest of depositors, or to prevent affairs being conducted in a manner detrimental to depositors.

Q

What is the minimum capital requirement for a new banking company to be licensed under Section 22 of the Banking Regulation Act, 1949?

A

Minimum paid-up capital of Rs. 500 crore is required.

Q

What is the minimum paid-up capital and reserves required for a bank to open a new branch under the Banking Regulation Act?

A

Under Section 23 of the Banking Regulation Act, 1949, a bank must obtain prior approval of RBI to open a new place of business; no fixed statutory minimum is prescribed but RBI evaluates financial health, CAMELS rating, and prior approval norms before granting permission.

Q

Under Section 5(b) of the Banking Regulation Act, what is the statutory definition of 'banking'?

A

Accepting deposits repayable on demand for lending or investment.

Q

Under which Act is the Negotiable Instruments Act, 1881 governed and what does Section 138 specifically deal with?

A

Section 138 of the Negotiable Instruments Act, 1881 deals with dishonour of cheque for insufficiency of funds, making it a criminal offence punishable with imprisonment up to two years or fine up to twice the cheque amount, or both.

Q

What is 'crossing of a cheque' and what legal protection does it provide to the paying banker?

A

Crossed cheque must be paid through a bank, protecting against fraud.

Q

What is the limitation period for filing a suit to recover a loan secured by a mortgage under the Limitation Act, 1963?

A

The limitation period for a suit to enforce a mortgage is 12 years from the date the money secured becomes due, as per Article 62 of the Limitation Act, 1963.

Q

Under the Limitation Act, 1963, what is the time limit to file a suit on a promissory note?

A

Three years from the date the note falls due.

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