Banking Law and Regulation Contents Units Introduction Central Bank and Legal System Structure and Formation of Bank and Financial Institutios Major Banking Law Bank Regulation and Central Bank Policy for Bank and FIs Legal Provision Relating to Negotiable Instrument Bank and Customer Relationship Bank Lending and Securities Legal Aspects of Trade Finance Legal Challenges in Banking Business

Meaning and concept of Bank and Financial Institutions What is a bank?

Concept of Bank Simply , Bank is defined as institution that deals with money. The legal definition of bank is more important because other types of financial institutions also offers the similar services but are not subjected to the same regulation as banks. Modern bank is defined as “bank is that what bank does.” Issues notes Accept deposits Grants loan Credit creation and controls Acts as agent Service provider and profit maker Medium of exchange Manage the payment system of the country

“Bank is an institution whose principal operations are concerned with the collection of the temporarily idle money of the general public for the purpose of advancing to other for expenditure.” -Kent “Banking means the accepting for the purpose of lending or investment of deposit of money from the public repayable on demand or otherwise , and withdrawal by cheque draft or otherwise.” Banking Regulation Act of India

Types of Bank Three main types of Bank Central Bank Commercial Bank Development Bank Other types of Bank Merchant banks (eg. Ace Development Bank) Industrial banks Exchange banks Saving bank Rural banks Cooperative banks