BANKING REGULATION ACT 1949 Passed as the Banking companies Act1949 (came into force w.e.f 16.03.49. It was made applicable to J & K in 1956 (and now applicable throughout India). The act is not applicable to Primary Agriculture Societies, Co-operative land mortgage banks and non-agriculture primary Credit Societies.
Banking is defined under Section 5-b means accepting for lending or investment of deposits of money from public repayable on demand or otherwise and withdraw able by cheque, drafts order or otherwise
Important Sections :-
| Section | Description |
| 5-a | Approved securities |
| 5-b | Baking is defined (Accepting deposit for lending & investment) |
| 5-f | Demand Time liabilities |
| 5-n | Secured loan or advances |
| 6-1 | Banking business |
| 6-2 | Restriction on business |
| 7 | Use of word banking |
| 8 | Restrictions on business of trading of goods except realization of securities held by it. |
| 9 | Banks prohibited in holding Immovable properties more than 7 years except acquired for own use |
| 10 | Management prohibition period of chairman and director etc. 5 year may extend for further 5 year |
| 11 & 12 | Paid up capital, reserves and rules foreign banks |
| 13 | Commission or brokerage |
| 14/14A | Prohibit a banking company from Creating a charge upon any unpaid capital of company. |
| 15 | Prohibits of payment of dividend |
| 17-1 | To create reserve fund 20% net profit transferred before dividend(RBI –directs banks to transfer 25% net profit before dividend w.e.f, 2011) |
| 18 | Cash reserve |
| 19 | Permit bank to form subsidiary company |
| 19-2 | No banking company shall hold shares in any company any amount exceeding 30% of its own paid up share capital + reserve or 30% of the paid up share capital of that company whichever is less. |
| 20 | Bank cannot grant loan against security of their own share |
| 21 | Control over advances by RBI |
| 21A | Rate of interest charged by banks are not subject to scrutiny by courts |
| 22 | Licensing of banking companies from RBI |
| 23 | Branch Licensing |
| 24 | Statutory liquidity ratio |
| 26 | Unclaimed Deposits |
| 29 | Bank to publish Balance Sheet |
| 30-I | Balance sheet to be got audited from qualified Auditors |
| 31 35 | Submit Balance sheet and audit Report within 3 months Inspection of Banks by RBI |
| 35A | Powers to give directions in public interest |
| 36 | RBI can terminate Chairman or any employee |
| 45 | RBI has power to apply to Central Govt. for suspension of business by a banking company and prepare a scheme of reconstitution or amalgamation. |
| 45Y | Preservation of Records |
| 45 ZA-ZF | Nomination Facilities on Bank deposits ,safe deposit articles and lockers |
| 45Z | Return the paid instruments |
| 47A | RBI can impose penalty for various kind of violations |
| 52 | Central Govt can make rules for all matter |