Hello and welcome to exampundit. As a part of Banking Awareness, Banking Regulation Act 1949 is extremely important. So, today we are sharing all the most Important Sections in Banking Regulation Act 1949.
Banking Regulation Act 1949 came into force on 16 March 1949.
Passed as the Banking Companies Act 1949, it came into force from 16 March 1949 and changed to Banking Regulation Act 1949 from 1 March 1966.
The Banking Regulation Act 1949 has 56 Sections in total. There was initially 55 Sections but in 1965 the Banking Regulation Act 1949 was amended to include Cooperative banks in the 56th section.
Important Sections in Banking Regulation Act 1949
- Section 7. Use of words “bank”, “banker”, “banking” or “banking company”.
- Section 10BB. Power of Reserve Bank to appoint chairman of the Board of directors appointed on a whole-time basis or a managing director of a banking company.
- Section 11. Requirement as to minimum paid-up capital and reserves.
- Section 12. Regulation of paid-up capital, subscribed capital and authorised capital and voting rights of shareholders.
- Section 15. Restrictions as to payment of dividend.
- Section 17. Reserve Fund.
- Section 18. Cash reserve
- Section 20. Restrictions on loans and advances.
- Section 21. Power of Reserve Bank to control advances by banking companies.
- Section 21A. Rates of interest charged by banking companies not to be subject to scrutiny by courts.
- Section 22. Licensing of banking companies.
- Section 24. Statutory Liquidity Ratio
- Section 23. Prohibits banks from opening a new place of business(branches) in India or abroad, change of premises otherwise than within the same city, change otherwise than within the town or village, without prior approval of RBI.
- Section 26. Every banking company to submit an annual return to RBI in respect of all accounts in India which have not been operated upon for 10 years.
- Section 29. Accounts and balance-sheet.
- Section 35A. Power of the Reserve Bank to give directions.
- Section 36AA. Power of Reserve Bank to remove managerial and other persons from office.
- Section 36AB. Power of Reserve Bank to appoint additional directors.
- Section 36AE. Power of Central Government to acquire undertakings of banking companies in certain cases.
- Section 36AF. Power of the Central Government to make scheme.
- Section 39. Reserve Bank to be official liquidator.
- Section 46. Penalties.
- Section 47A. Power of Reserve Bank to impose penalty.
- Section 49. Special provisions for private banking companies.
- Section 49A. Restriction on acceptance of deposits withdrawable by cheque.
- Section 49B. Change of name by a banking company.
- Section 51. Application of certain provisions to the State Bank of India and other notified banks.
- Section 52. Power of Central Government to make rules.
- Section 56. Act to apply to co-operative societies subject to modifications.
Important Sections in Banking Regulation Act 1949 related to RBI’s PCA
- RBI to remove managerial persons under Section 36AA of the BR Act 1949 as applicable.
- RBI to supersede the Board under Section 36ACA of the BR Act 1949/ recommend supersession of the Board as applicable.
So, these were the most Important Sections in Banking Regulation Act 1949. These will be extremely important for upcoming Banking Exams.