Explore the comprehensive 4th Semester LLB Banking Law Syllabus to discover key topics and modules for students, covering the laws and regulations that govern banks and financial institutions operating like banks.
Banking Law is a law specialization that lists the laws that govern how banks and other law institutes function and conduct business. Banking law covers a broad area of financial regulations. It includes not only how banks operate, but also how different financial institutions are run. For this exercise, we include any financial institutions that offer similar services to banks.
OBJECTIVES
A Vitally important economic institution socio-political and economic changes deeply influence banking. The emerging changes in India, particularly after the initiation of the planning process as an instrument of rapid economic development had molded and affected the banking structure, policies, patterns, and practices. A significant development in the banking system is diversification in bank financing. Commercial banks entered into the field of wide-ranging financial assistance to industry, both large and small scale, requiring the need for social control of the banking system eventually leading to the nationalization of banks.
The conventional banking system, found to be deficient for planned developmental purposes, paved the way for developmental banking. The fag of the last millennium witnessed an influx of foreign banking companies into India and a shift in the banking policy as part of the global phenomenon of liberalization. The legal system is adopting itself into the new mores.
This course is designed to acquaint the student with the conceptual and operational parameters of banking law, judicial interpretation, and the new and emerging dimensions of the banking system.
UNIT-I :
NATURE AND DEVELOPMENT OF BANKING LAW
History of banking in India and elsewhere- indigenous banking – evolution of banking in India – different kinds of banks and their functions. Multi-functional banks – growth and legal issues.
LAW RELATING TO BANKING COMPANIES IN INDIA
Controls by government and its agencies: On management – On accounts and audit-Lending-Credit policy-Reconstruction and reorganization-Suspension and winding up.
UNIT-II
BANKING REGULATION ACT, 1949
Evolution of Central Bank, Characteristics and functions, Economic and social objectives, The Central Bank and the State- as banker’s bank, The Reserve Bank of India as the Central Bank.
ORGANISATIONAL STRUCTURE
Functions of the RBI- Regulation of monitory mechanism of the economy – Credit control – Exchange control – Monopoly of currency issue – Bank rate policy formation. Control of RBI over non-banking companies, Financial companies, and Non-financial companies.
THE DEPOSIT INSURANCE CORPORATION ACT,1961
Objects and reasons- Establishment of Capital of DIC, Registration of banking companies insured banks, the liability of DIC to depositors. Relations between insured banks, DIC and Reserve Bank of India.
UNIT-III
RELATIONSHIP OF BANKER AND CUSTOMER:
Legal character, Control between banker and customer, Banker’s lien, Protection of bankers, Customers – Nature and type of accounts- Special classes of customers- lunatics, minor, partnership, corporations, local authorities, Rights and duties of Banker & customer. Consumer protection-banking as service.
UNIT-IV
LAW RELATING TO NEGOTIABLE INSTRUMENTS, 1881 ACT (read with the amended act of 2002) Negotiable Instrument — Kinds- Holders and holder in due course — Parties – Negotiable
— Assignment – Presentment Endorsement — Liability of parties — Payment in due course Special rules of evidence — material alteration — Noting and protest — Paying banker and collecting banker — Bills in sets — Penal provisions under NI Act- banker’s book Evidence Act
UNIT-V
LENDING BY BANKS
Good lending principles- Lending to poor masses- Securities for advances- Kinds and their merits and demerits — Repayment of loans: rate of interest, protection against penalty- Default and recovery — debt recovery tribunal.
RECENT TRENDS OF BANKING SYSTEM IN INDIA
New technology, Information technology, Automation and legal aspects, Automatic teller machine and use of the internet, Smart card, Use of expert system, Credit cards.
Prescribed Books
- Tannan, M.L., Banking Law and Practice, (Lexis Nexis,2014).
- M. S. Parthasarathy (Ed.), Khergamvala, Negotiable Instruments Act (Bombay: N.M.Tripathi Pvt Ltd, 1955)
- Justice Bhaghabati Prasad Banerjee, Guide to Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Reference Books
- Singh, Avtar, Laws of Banking and Negotiable Instruments, (Eastern Book Co., 2007)
Basu, Saroj Kumar and Alak Ghosh, A Review of Current Banking Theory and Practice, (Mc Millan, 1974) - Paget, Law of Banking, 13th Edition, (UK: Lexis Nexis,2007)
- Goyle, L.C., The Law of Banking and Bankers, (Eastern Law House, 1995)
Relevant provisions of Information Technology Act, 2000
