Banking Regulation Act

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Questions and Answers

Who can appoint a chairman of the Board of directors or a managing director?

Government of India

Securities and Exchange Board of India

Reserve Bank (correct)

Banking company

What is the provision for a chairman of the Board of directors or a managing director appointed by the Reserve Bank?

They have to be elected by the shareholders

They are exempt from holding qualification shares (correct)

They have to be approved by the government

They are required to hold qualification shares

What happens to an appointment or removal of a director, chairman of the Board of directors or managing director under section 10A or section 10B?

It needs to be ratified by the Reserve Bank

It requires approval from the shareholders

It requires approval from the government

It has effect despite anything contained in any law or contract (correct)

Who can appoint a director of a banking company?

Reserve Bank Signup and view all the answers

What is the effect of an appointment or removal of a director, chairman of the Board of directors or managing director under section 10A or section 10B?

The person is not entitled to claim compensation for the loss or termination of office Signup and view all the answers

What provisions of the law override all other laws, contracts, etc.?

Provisions of sections 10A, 10B and 10BB Signup and view all the answers

Who is exempt from holding qualification shares in a banking company?

All of the above Signup and view all the answers

What is the section that deals with the provisions of chairman and certain directors not to be required to hold qualification shares?

Section 10C Signup and view all the answers

What happens to provisions in memorandum, articles, agreement, or resolution that contradict the Banking Companies (Amendment) Act, 1959?

They become void Signup and view all the answers

In addition to banking, what business can a banking company engage in?

Any one or more of the specified forms of business Signup and view all the answers

What is one of the forms of business a banking company can engage in?

Borrowing, raising, or taking up of money Signup and view all the answers

What can a banking company do with property that comes into its possession?

Manage, sell, and realize it Signup and view all the answers

What is one of the responsibilities of a banking company?

Undertaking trusts Signup and view all the answers

What can a banking company do with shares, stock, debentures, or debenture stock?

Acquire, hold, issue on commission, underwrite, and deal in them Signup and view all the answers

What can a banking company do with foreign exchange?

Buy, sell, and deal in it Signup and view all the answers

What is one of the things a banking company can do with employees or ex-employees?

Establish and support associations, institutions, funds, trusts, and conveniences Signup and view all the answers

What can a banking company do with securities?

Buy, sell, and deal in them Signup and view all the answers

What can a banking company do as an agent?

Act as an agent for any Government or local authority or any other person or persons Signup and view all the answers

What is the topic of Section 20 of the banking laws?

Restrictions on loans and advances Signup and view all the answers

What is the purpose of Section 24 of the banking laws?

Maintenance of a percentage of assets Signup and view all the answers

What is the authority given to the Reserve Bank under Section 35A of the banking laws?

Power to give directions Signup and view all the answers

What is the purpose of Section 26A of the banking laws?

Establishment of Depositor Education and Awareness Fund Signup and view all the answers

What is the purpose of Section 36AA of the banking laws?

Power of Reserve Bank to remove managerial and other persons from office Signup and view all the answers

What is the purpose of Part IIA of the banking laws?

Control over management Signup and view all the answers

What is the purpose of Section 21 of the banking laws?

Power of Reserve Bank to control advances Signup and view all the answers

What is the purpose of Section 27 of the banking laws?

Monthly returns and power to call for other returns and information Signup and view all the answers

Study Notes

Section 10B Provisions

The provisions of Section 10B apply to the Chairman of the Board of Directors appointed on a whole-time basis or a Managing Director appointed by the Reserve Bank.
The Chairman and certain directors are not required to hold qualification shares in the banking company.

Section 10D

The provisions of Sections 10A, 10B, and 10BB override all other laws, contracts, etc.
Any appointment or removal of a director, Chairman, or Managing Director in pursuance of Section 10A or Section 10B shall have effect, notwithstanding anything contained in any law or contract.

Business of Banking Companies

Banking companies can engage in various forms of business in addition to banking, including:
- Borrowing, raising, or taking up money
- Lending or advancing money
- Drawing, making, accepting, discounting, buying, selling, collecting, and dealing in bills of exchange, hoondees, promissory notes, etc.
- Buying, selling, and dealing in bullion and specie
- Buying and selling of foreign exchange
- Acquiring, holding, issuing on commission, underwriting, and dealing in stock, funds, shares, debentures, etc.
- Acting as agents for Governments, local authorities, or other persons
- Contracting for public and private loans and negotiating and issuing the same
- Effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of any issue of State, municipal, or other loans
- Carrying on and transacting every kind of guarantee and indemnity business
- Managing, selling, and realising any property that may come into possession of the company
- Acquiring and holding and generally dealing with any property or right, title, or interest in any property
- Undertaking and executing trusts
- Undertaking the administration of estates as executor, trustee, or otherwise
- Establishing and supporting or aiding in the establishment and support of associations, institutions, funds, trusts, and conveniences for employees or ex-employees

Other Provisions

Part IIA: Control over Management
Part IIAB: Supersession of Board of Directors of Banking Company
Part IIB: Prohibition of Certain Activities in Relation to Banking Companies

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Description

This quiz is based on Section 10B of the Banking Regulation Act, which deals with the appointment of a chairman or managing director of a banking company.

Banking Regulation Act - Section 10B