Chapter: Business Science - Banking Financial Services Management - Overview of Indian Banking System

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The RBI ACT 1934

KEY ACTS GOVERNING THE FUNCTIONING OF INDIAN BANKING SYSTEM, COLLECTION AND FURNISHING OF CREDIT INFORMATION

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

 

    Organisation structure

 

    Central Board of Directors - 20 members,

 

    One Governor-1

 

    Deputy Governors-4

 

 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

 

Monetary Role

 

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

 

Advances

 

Credit facilities

 

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

 

institutions:

 

Chapter IIIC: Prohibition of acceptance of deposits by unincorporated bodies:

 

Chapter IIID: Regulation  of transactions inderivatives,  money  market instruments or

 

securities:

Derivatives,

 

Money market instruments,

 

repo and securities

 

Chapter IV : General Provisions

Contribution of central government to reserve funds,

 

National, Rural, Industrial and housing credit,

 

appointment,

 

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)


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