CAIIB · BRBL

Legal Framework of banks

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

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Which Act is the primary legislation governing the establishment and functioning of commercial banks in India?

The Banking Regulation Act, 1949 is the primary legislation that governs the establishment, regulation, and winding up of banking companies in India.

What is the full form of SARFAESI Act enacted in 2002?

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest

What is the definition of 'banking' as per the Banking Regulation Act, 1949?

Banking is defined as accepting deposits of money from the public for the purpose of lending or investment, repayable on demand or otherwise and withdrawable by cheque, draft, order, or otherwise.

Which authority supervises and regulates non-banking financial companies (NBFCs) in India?

Reserve Bank of India under RBI Act, 1934

Which authority has the power to grant a licence to a banking company to commence banking business in India?

The Reserve Bank of India (RBI) has the power to grant or refuse a licence to a banking company to commence banking business in India under Section 22 of the Banking Regulation Act, 1949.

Under which section of the Banking Regulation Act can RBI cancel a banking licence?

Section 22 of the Banking Regulation Act, 1949

What is the minimum paid-up capital requirement for a new private sector bank in India as per RBI guidelines?

A new private sector bank in India requires a minimum paid-up voting equity capital of Rs. 500 crore as per the RBI's licensing guidelines.

What is the maximum period for which a bank can be placed under moratorium?

Six months, extendable up to a total of one year

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