Banking Regulation Act: Sections 10B and 10D

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Questions and Answers

What is the power of the Reserve Bank according to Section 36A?

To appoint additional directors

To remove managerial and other persons from office

To supersede the Board of Directors

To give directions (correct)

What is the purpose of Section 20A?

Restrictions on power to remit debts (correct)

Licensing of banking companies

Restrictions on loans and advances

Maintenance of a percentage of assets

What is the provision for certain banking companies according to Section 36A?

Certain provisions of the Act not to apply (correct)

Production of documents of confidential nature

Part IIA to override other laws

Punishments for certain activities in relation to banking companies

What is the responsibility of the Reserve Bank according to Section 21?

To control advances by banking companies (C) Signup and view all the answers

What is the purpose of Section 27?

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

What is the consequence for certain activities in relation to banking companies according to Section 36AD?

Punishments for certain activities in relation to banking companies (D) Signup and view all the answers

What is the purpose of Section 23?

Restrictions on opening of new, and transfer of existing, places of business (B) Signup and view all the answers

What is the power of the Reserve Bank according to Section 36ACA?

Supersession of Board of Directors in certain cases (C) Signup and view all the answers

According to the provisions of section 10B, who is exempt from holding qualification shares in a banking company?

A chairman of the Board of directors appointed on a whole-time basis (C) Signup and view all the answers

Under what circumstances can the Reserve Bank appoint a director to a banking company?

Under section 10A, as specified in the banking laws (A) Signup and view all the answers

What is the effect of an appointment or removal of a director, chairman, or managing director made under sections 10A, 10B, or 10BB?

The appointment or removal has effect notwithstanding any law or contract (C) Signup and view all the answers

What is the purpose of section 10B in the context of banking laws?

To apply the provisions of section 10B to certain directors appointed by the Reserve Bank (C) Signup and view all the answers

Which of the following is NOT a consequence of an appointment or removal of a director, chairman, or managing director made under sections 10A, 10B, or 10BB?

The person appointed or removed is entitled to claim compensation for the loss or termination of office (A) Signup and view all the answers

Who is responsible for appointing a chairman of the Board of directors on a whole-time basis or a managing director to a banking company?

The Reserve Bank (C) Signup and view all the answers

What is the relationship between sections 10A, 10B, and 10BB in the context of banking laws?

Sections 10A, 10B, and 10BB are related provisions that govern appointments and removals of directors (D) Signup and view all the answers

What is the significance of section 10C in the context of banking laws?

It exempts certain directors from holding qualification shares in banking companies (D) Signup and view all the answers

What happens to any provision contained in the memorandum, articles, agreement or resolution that is repugnant to the provisions of the Banking Companies (Amendment) Act, 1959?

It becomes or is void, as the case may be (A) Signup and view all the answers

What business can a banking company engage in, in addition to the business of banking?

Any one or more of several forms of business, including borrowing, lending, and dealing in securities (C) Signup and view all the answers

What can a banking company do with securities that form part of the security for any loans or advances?

Acquire, hold, and deal with them (C) 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 covers the provisions of Sections 10B and 10D of the Banking Regulation Act, including the role of the Chairman and Managing Director, and the override of other laws and contracts.