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Important Acts Related to Banking in India

Published on Monday, December 19, 2016
Name of the Act
Important Facts
Banking Regulation Act, 1949
1.   The Banking Regulation Act Came into force with effective from 16th March 1949.
2.     Initially, it was named as “Banking Companies Act, 1949”, but latter the name was changed to Banking Regulation Act 1949 from 1st March 1966.
3.     This Act Provides safety in the interest of depositors.

4.     This Act forbids the misuse of powers by Higher Authorities/ Staffs / Banking employees etc.
5.     Bank Employee Can take leave according to this ACTS.
SARFAESI Act, 2002
1.     Full form of SARFAESI – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
2.     This SARFAESI ACT, 2002 acts as a tool to recover the debt, bad loans i.e. NPA (Non-Performing Assets).
3.     According to this ACT, bank has the power to seize the securities of Loan Defaulters (Except Agricultural Land) without the intervention of the court.
4.     This Act also giver power of “Seize & Desist” to all banks in India.
State Bank of India Act,1955
1.     According to this the Reserve Bank of India acquired a controlling Interest in the Imperial Bank of India.
2.     This Acts also prevent the misuse of depositors Interests.
Reserve Bank of India Act,1934
1.     The Reserve Bank of India Act Came into Effect from 6th March 1934.
2.     This Acts Provides the Supervision and Regulation of the banking system in India.
3.     According to this Act, all Scheduled Bank must have minimum 5 Lakh & above pay up capital.
4.     According to this Act RBI has the power regarding the exchange of damaged and imperfect Currency Notes.
5.     According to this Act, the Maximum denomination of Currency Notes can be Rs.10,000.
6.     According to this Act, only the RBI or Union Government can issue and accept Promissory Notes which is payable on demand.
7.      According to this Act, Every Schedule Bank has a minimum capital with the RBI on Daily basis which is generally termed as CRR.
8.     This Act also says each & every bank in India needs to follow the guidelines which are implemented by RBI.
9.      According to this Act RBI can charge/fine any bank with prior notice if the bank not obeys the guidelines.
Foreign Exchange Regulation Act, 1973
1.     This Act Came in force with Effect from 1st January 1974.
2.     These Acts impose the strict rules and regulations on certain kinds of payments/transactions, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency.
3.     FERA was repealed in 1988 by the Union Government at the time of Atal Bihari Vajpayee Government and Replaced FERA into FEMA.
Foreign Exchange Management Act, 1999
1.     This Act was enacted on 29th December 2000.
2.     This Act makes offences related to foreign exchange civil offences.
3.     This Act was Enacted after Replacing FERA Act, 1973 with a New Strict Norms and guidelines.
4.     This Act enables the Reserve Bank of India and the Central Government to pass regulations and rules relating to foreign exchange in tune with the Foreign Trade policy of India.

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