Section 138 of Negotiable Instrument Act deals with the provision of Dishonoring of Cheque due to insufficiency etc, of funds in the account. It come into force from 1-4-1989 vide the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 with the objective of not only protecting the interests of the genuine drawers…
Introduction Post 2008 global financial crisis, reputation of financial institutions including banks was tarnished leading to declining trust in conventional banking systems. Banks worldwide subsequently reported significant liquidity shortage (Milne, 2018)as, in the US, crisis hit big financial powerhouses like JPMorgan Chase, Morgan Stanley; Finland reported considerable decline in private investments (Söderlund & Kestilä-Kekkonen, 2014);…
NATURE OF BANK GUARANTEE: INDEPENDENT AND AUTONOMOUS A bank guarantee is an undertaking by a bank or a banking institution to undertake to pay against the beneficiary’s demand for payment. Where a bank unconditionally and irrevocably promises to pay on demand (i.e. guarantees payment), the amount of liability undertaken in the guarantee without any reference…
Meaning:According to Sec. 5 of the Banking Regulation Act, 1949, a banking company means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawn by Cheque, Draft, Order, or otherwise. In short, a banking company means and includes any company which carries…
Role and functions of National Bank for Agriculture and Rural Development (NABARD) NABARD is a Development Bank which came into existence post the enactment of the NABARD Act of 1981 and is regulated by the RBI. The ownership of these banks lies in the hands of the Government of India. It is a National Financial…
The collapse of the housing market, banking sector and the consequent financial crisis of 2007-08 showed the regulatory loopholes in the system, its flaws, defaults, inefficiencies. Therefore, in order to promote cooperation between central banks of different countries, foster financial stability and have internationally accepted standards for banking and regulation, the Bank for International Settlement…
In accordance with the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980, a policy of nationalization of banks was brought about India. On its 50th anniversary, Niranjan Rajadhyaksha stated in his opinion piece that “The second volume of the official history of the Reserve Bank of India describes bank nationalization as the single-most-important economic…
The Insolvency and Bankruptcy Code, 2016 (“Code”), has created a lot of confusion in the past regarding their resolution over the banking sector and the other financial service providers. The inefficiency of the said code to regulate these institutions lies in the nature of its applicability. The code is clearly enacted in a manner that it resolves…
Generally, laws on money lending aim to safeguard the interest and rights of the borrower by imposing licensing requirements on money lenders, limiting the interest rates charged on loans by them, and implementing more such rules and policies so as to control and regulate the activities of private money lending and that of the money…
INTRODUCTION The Supreme Court of India overturned a circular (the VC Circular) issued by India’s central bank, the Reserve Bank of India (RBI), on constitutional grounds on March 4, 2020, which banned the use of regulated banking and payment channels for the selling and purchase of virtual currency (the IAMAI case). 3 This reaffirmed the…
