INTRODUCTION
All banking firms based in India are governed by the Banking Regulation Act, 1949 (“Act”). It was passed in the name of the Banking Companies Act. The first edition of the Act was enforced on 16 March 1949 but was later changed into the Banking Regulation Act in 1966.
The Act was implemented in Jammu and Kashmir in 1956. Initially, only banks were affected by the provisions of this legislation. Its provisions, however, were extended to cooperative banks after the 1965 amendment.
Under the Act, the Reserve Bank of India (“RBI”) has the power to license and regulate banks. In addition, the RBI is authorized to manage and recruit boards. Moreover, the RBI can issue instructions for audits, oversee mergers and liquidations, as well as formulate banking policies.
The Act, as amended in its current form, is a comprehensive piece of legislation intended to proliferate bank business in the country. Legislators attempted to fully incorporate every aspect of banking within the Act, including its definition, licensing, and most importantly, its provisions for taking-over, amalgamation, and liquidation. Cooperative land mortgage banks, primary agriculture credit societies, and other cooperative societies are exempt from the law.
Even though the Indian Companies Act, of 1913 aimed at regulating the banking business in India, these provisions proved to be inadequate. There was a lack of organization and a poor state of the business. Private banks predominated.
There were very few people who benefited from these banks’ monopolies. The failure of many banks was also caused by an inadequacy of capital. For the banking sector to function properly, the government felt it was necessary to enact specific legislation. To exert some sort of control over the nation’s banking sector, the Banking Regulation Act, 1949 (originally the Banking Companies Act) was passed.
In this article, Team YLCC brings you the Top 50 Interview Questions On The Banking Regulations Act. Read on!
TOP 50 INTERVIEW QUESTIONS
Across the globe, freshers and experienced professionals are looking to become bankers when it comes to their career opportunities. The banking sector does not offer easy career opportunities, especially when it comes to qualifications.
A job in the banking sector requires the right academic qualifications, aptitude, sincerity, responsibility, and dedication, as well as experience if you are not applying for entry-level positions. The interview panel looks for answers to many bank interview questions and answers to clear the interview.
1. What are Floating Charges?
2. Under which section of the Act it is addressed that non-banking assets can be disposed of?
3. What is the minimum maturity period in respect of external commercial borrowings (ECB) according to the amount?
4. In which of the ratios repayment capacity in the case of term loan proposals is judged by the banks?
5. Under which section return of paid cheques to customers and nomination facility, deposit accounts, safe deposit articles are mentioned?
6. What is meant by ‘approved securities’ under the Act?
7. What is Exim Bank?
8. What are the forms of business in which banking companies may engage?
9. Can the RBI carry out an inspection of any Bank under the Act?
10. What is the Cash Reserve Ratio to be maintained by Non-scheduled banks?
11. What are the Liquidity Norms under section 24 of the Act?
12. What does not qualify to be called banks in the cooperative sector under the Act?
13. What does a ‘banking company’ means under the Act?
14. What are the compliance requirements which need to be fulfilled by a bank under the Act?
15. Under which section of the Act ‘know your customer guidelines are issued?
16. Does the Act provide for supervision of commercial banking activities?
17. Which nationalised bank was merged with Punjab National bank in 1993?
18. State the primary objective of Sukhmoy Chakravarty Committee formed in 1982?
19. Is drawing, accepting, making or issuing of any promissory note, hundi or bill of exchange expressed to be payable to bearer on demand by a person other than the RBI or the Central Government is prohibited under the Act?
20. Do a banking company incorporated in India is required to create a reserve fund?
21. Can bank grant loans or advances on the security of its shares?
22. Does the Act regulate/governs the opening of branches by the banks?
23. What is the exception to Prohibition to Trading under section 8 of the Act?
24. What are Non-Banking Assets?
25. What are the powers of a chairman of a banking company?
26. Under which section of the Act ‘preferential payment to depositors’ is mentioned?
27. What percentage of the total number of members of the Board of Directors of a banking company shall consist of persons who have special knowledge or practical experience in one or more of the prescribed fields under section 9 of the Act?
28. Can RBI impose penalties under the Act?
29. What is Depositor Education and Awareness Fund?
30. State the duty of directors and officers of a banking company.
31. How many directors of the banking company should have special knowledge or practical experience relating to agriculture and rural economy and cooperation?
32. What are the requirements are laid down under section 11 for a banking company?
33. What are the conditions relating to the capital structure of a banking company?
34. What are the restrictions on the opening of new, and transfer of existing, places of business for a banking company?
35. What are the Grounds on which the RBI can apply to the Court for a banking company’s wind up?
36. Can a banking company pay any dividend, if yes, under what circumstances?
37. How can a banking company be wind up?
38. What are the grounds of voluntary winding up?
39. What are the powers of the RBI under the Act?
40. How much cash reserve should be maintained by a banking company in India?
41. What are the provisions for the election of new directors under the Act?
42. Can a director of a banking company, other than its chairman or whole-time director, hold office continuously for a period exceeding eight years under the Act?
43. Can a person acquire by himself or act in concert with any other person, shares or voting rights of a banking company?
44. When was the State Bank of India (SBI) nationalised?
45. What are the powers of the Central Government to make rules for the preservation of records?
46. What are the special provisions for punishing offences concerning banking companies being wound up?
47. What are the new set of forms prescribed for the Balance Sheet and Profit and Loss Account of the banking company and the guidelines issued by the RBI to follow the new forms with effect from 31st March 1992?
48. Can RBI order a special audit for the public interest of depositors?
49. Brief about the privatisation of public sector banks in India.
50. What are the reasons for the privatisation of public sector banks in India?
YLCC would like to thank Nikunj Arora for his valuable contribution in this article.
