KEY ACTS GOVERNING THE FUNCTIONING OF INDIAN BANKING SYSTEM
The RBI ACT 1934
Ø Central bank of the country
Ø Established in April 1935 with a share capital of Rs. 5 crores
Recommendation-Hilton Young Commission.
The share capital was divided into shares of Rs. 100 each fully paid .
Reserve Bank of India was nationalized in the year 1949
Central Board of Directors - 20 members,
one Government official from the Ministry of Finance, ten nominated Directors by the Government
four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi.
Local Boards consist of five members each Central Government appointed for a term of four years to represent territorial and economic interests and the interests of co-operative and indigenous banks.
Role of RBI
a) Note issuing authority
b)banker‗s bank and Lender ofthe last resort c) Banker to the Government
d) Custodian of foreignexchange reservese) Control of credit
Non Monetary Role
a)Collection and publication of data b)regulatory and supervisory Function c)Development and promotionfunction
CHAPTER I – PRELIMINARY
Ø It extends whole of india
CHAPTER II – Incorporation,management&business
Capital - crores
Mgt- central govt
CHAPTER IIIA : COLLECTION AND FURNISHING OF CREDIT INFORMATION:
Provisions regarding the power of the bank to collect credit information,
nature of loans
procedure for furnishing information and prohibited information
credit information as may be specified in the application.
The Bank may in respect of each application levy such fees, not exceeding
Ø twenty-five rupees, as it may deem fit for furnishing credit information.
Chapter IIIB: Provisions relating to non-banking institutions receiving deposits and financial
Chapter IIIC: Prohibition of acceptance of deposits by unincorporated bodies:
Chapter IIID: Regulation of transactions inderivatives, money market instruments or
Money market instruments,
repo and securities
Chapter IV : General Provisions
Contribution of central government to reserve funds,
National, Rural, Industrial and housing credit,
Powers and duties of auditors,
Exemption of banks from income tax,
Delegation of powers,
Liquidation of the bank etc.
Chapter V Penalties:
Penalities for any person, directors,auditor and company who ever makes a wrong statement willfully,( application,declaration, return, advertisement,book, account, document)