MA0037 - BANKING RELATED LAWS AND PRACTICES

DRIVE	SPRING 2014
PROGRAM	MBADS (SEM 3/SEM 5) MBAFLEX/ MBAN2 (SEM 3) PGDBMN (SEM 1)
SUBJECT CODE & NAME	MA0037 BANKING RELATED LAWS AND PRACTICES
BK ID	1618
CREDIT	4
MARKS	60

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ASSIGNMENT

1 Explain the provisions of Banking Regulation Act enabling RBI to control deposits, loans and advances and rate of interest in the banking companies.

Answer:-Explain the provisions of Banking Regulation Act

This Act, for the banking regulation, was enacted and amended in 1949 inorder to provide necessary legal framework to banking companies. In theyear 1965, the Act was amended so as to cover cooperative banks withsome modifications. It may be noted that the Act does not apply to primary Agricultural Credit Societies and Cooperative Land Mortgage Banks. Theprovisions of the Act are applicable to banking companies in addition toother laws which are applicable to such companies, unless otherwisespecifically provided in the Act.

The Act mainly deals with the following:

2 Discuss whether banks are authorised to deal in foreign exchange can issue guarantee on behalf of person residing outside India for foreign direct investment transactions in India.

Answer:-Explain Guarantee

Contract of guarantee is a contract to perform the promise, or discharge theliability, of a third person in case of his default. The person who gives theguarantee is called the ‘surety’, the person in respect of whose default the guarantee is given is called the ‘principal debtor’ and the person to whom the guarantee is given is called the ‘creditor’.

·         A guarantee may be either oral or written (Sec 126).

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3 Discuss the provisions of Banking Regulation Act.

Answer:-Explain the provisions of Banking Regulation Act

This Act, for the banking regulation, was enacted and amended in 1949 inorder to provide necessary legal framework to banking companies. In theyear 1965, the Act was amended so as to cover cooperative banks withsome modifications. It may be noted that the Act does not apply to primary Agricultural Credit Societies and Cooperative Land Mortgage Banks. Theprovisions of the Act are applicable to banking companies in addition toother laws which are applicable to

4 Explain registration of Securitization Company or Reconstruction Company. Explain enforcement of security.

Answer:-Explain registration of securitisation company

The securitisation company or reconstruction company can commence orcarry on business only on complying the conditions below:

a. It has to obtain the certification of registration in the prescribed formatfrom the reserve bank.

b. It has to maintain the owned funds not less

5 What do you mean by arbitration under Banking Ombudsman scheme? Explain the procedure forredressal of grievances under Banking Ombudsman scheme?

Answer:-Explain arbitration

Banking Ombudsman scheme provides for arbitration andconciliation of disputes between the banks and their customers. The valueof claim in dispute under reference to arbitration should not be in excess of Rs. 10 lakh and both the parties to the dispute should agree for reference.On reference, the Banking Ombudsman himself or herself acts as anarbitrator.

Any dispute between a bank and its constituents or amongst the banks may be referred to a Banking Ombudsman for arbitration if both the parties agreefor such a reference provided that the value of the claim in such disputesdoes not exceed Rs. 10 lakh.

6 Is Securitisation Act applicable to Cooperative banks? If not, discuss the reasons.

Answer:-Explain Securitisation Act

The securitisation company or reconstruction company can commence orcarry on business only on complying the conditions below:

a. It has to obtain the certification of registration in the prescribed formatfrom the reserve bank.

b. It has to maintain the owned funds not less than Rs.

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