DMHSL - Banking and Insurance Law Semester VI PDF

LL.B.
SEMESTER VI
BANKING AND INSURANCE LAW
Course Code: UL-LLB-604 Credits: 4
A) INTRODUCTION
Banks and insurance companies are both financial institutions but each has a unique role to
play. Their operations are set on different models, each having its own unique features and
challenges. This course introduces students to the principles and tools of banking and
insurance law. The evolution of the banking sector in India has been unique and has
included key developments such as nationalisation and social control over banks.
Moreover, several legal frameworks have developed which regulate banking activities and
services. Likewise, the contract of insurance involves certain key elements which students
ought to be familiar with. Focus of this course will be on facilitating students in developing
the basic understanding and knowledge about the banking and insurance sectors, their
working and the legal framework applicable to various banking services and to insurance.
B) OBJECTIVES
The core objectives of this course are to:

(a) create an understanding amongst students about the fundamental principles of
banking and its practices in India;
(b) acquaint the students with the legal framework applicable to the banking sector;
(c) familiarise students with insurance and the law applicable thereto; and
(d) create well rounded individuals familiar with the key legal framework applicable to
both banking and insurance.
C) COURSE LEARNING OUTCOME
At the end of the course, the student will be able to:

(a) develop a comprehensive understanding of the key principles of banking law in
India;
(b) understand the role of banking and insurance in the development of the national
economy;
(c) apply specialised knowledge of law developed through their understanding in
various real life matters relating to banking practices and insurance; and
(d) understand various technologies and emerging issues (such as cryptocurrency) in the
banking sector.
D) CURRICULUM
UNITS CONTENTS HOURS
60
1. Introduction 08
1.1 Indian Banking Structure, origin and history, bank

nationalisation and social control over banking and evolution
of banking institutions
1.2 Types of banks and their functions
1.3 Banker and customer: relationship, rights, and duties
1.4 Banking sector reforms in India (Narasimham Committee
Reports)
1.5 Kinds of accounts
1.5.1.1 Current Account
1.5.1.2 Savings Account
1.5.1.3 Deposit Account
1.5.1.4 Joint Account
1.5.1.5 Accounts of special customers (minor,
partnership, company, trust, etc.)
2. Legal framework applicable to banking 15
2.1 Reserve Bank of India Act, 1934

2.1.1 Establishment and incorporation of RBI
2.1.2 Central banking functions
2.1.3 Collection and furnishing of credit information
2.1.4 Amendments brought into the Act through Finance
Act, 2018
and Finance Act, 2019
2.2 Banking Regulations Act, 1949
2.2.1 Definitions of bank, banker, banking, banking
companies
2.2.2 Development of banking business and companies
2.2.3 Regulations and restrictions
2.2.4 Licensing of banking companies
2.2.5 Acquisition of undertaking of banking company
2.2.6 Suspension of business, winding up, reconstruction
and amalgamation of banking companies
2.2.7 Banking Regulations Amendment Act, 2017:
Provisions with respect to Non-Performing Assets
(NPA)
2.3 Banking Ombudsman
3. Negotiable Instruments Act, 1881 10
3.1 Negotiable Instruments

3.2 Promissory Note
3.3 Bill of Exchange
3.4 Cheque
3.5 Parties to Negotiable Instrument
3.6 Holder and Holder in Due Course
3.7 Material Alternation
3.8 Liability of Banker
3.9 Special provisions with respect to dishonour of cheques under
the NI Act 1881 (as amended) and IT Act 2001 (as amended)
4. Insurance 07
4.1 Definition and meaning of insurance

4.2 General principles of contracts of insurance
4.3 Special principles of contracts of insurance
4.4 Subject matter of Insurance
4.5 Principles applicable
4.6 Formation of contract
5. Specific types of Insurance and law 10
5.1 The Insurance Act, 1938

5.2 The Insurance Regulatory and Development Authority Act,
1999
5.3 Specific types of insurance
5.3.1 Marine insurance under the Marine Insurance Act, 1963
5.3.2 Life insurance and the Life Insurance Corporation Act,
1956
5.3.3 The General Insurance Business (Nationalization) Act,
1972
6. Emerging issues 10
6.1 E-Banking: Electronic Payments (digital cash) through ATM

and UPI
6.2 Internet Banking in India: Legal and regulatory issues
6.3 Mobile banking in India: Legal and regulatory issues
6.4 Cryptocurrency
6.4.1 Meaning and history of cryptocurrency
6.4.2 Legal validity of cryptocurrency
6.4.3 New opportunities for online currencies vis-à-vis
cybercrimes.
Self-Learning Topics (Unit wise) and Self Learning Material
Sr. Sub- Topic Reference Material

No. Unit
1 1.1 Nationalization of banks in https://main.sci.gov.in/judgment/judis/1504.pdf

India: R.C. Cooper v.
Union of India
2 5.2 IRDAI (Insurance www.irdai.gov.in

Regulatory and
Development Authority of
India)
E) RECOMMENDED READINGS/ REFERENCES
1. C.R. Datta & P.M. Bakshi, M.L. Tannan, Banking - Law and Practice in India
(21th ed., 2008)
2. R.K. Gupta, Banking – Law, and Practice (2nd ed. 2008)
3. S.N. Gupta, The Banking Law in Theory and Practice, Vol. 1, 2&3, (6th ed., 2017)
4. Prof. Clifford Gomez : Banking and Finance - Theory, Law and Practice, PHI
Learning Private Limited (2011)
5. J.M. Holden : The Law and Practice of Banking, Universal Law Publishing.
6. M.N. Srinivasan & K. Kannan (Revised by Justice K. Kannan) Principles of
Insurance Law (10th ed., 2017)
7. M.N. Mishra, Law of Insurance (9th ed., 2012)
8. J.V.N. Jaiswal: Law of Insurance, Eastern Book Company, Lucknow
Prescribed legislations:
1. Reserve Bank of India Act, 1934.

2. Banking Regulations Act, 1949.
3. Banking Regulations (Amendment) Act, 2017.
4. The Insurance Act, 1938.
5. The Insurance Regulatory and Development Authority Act, 1999.
6. Marine Insurance Act, 1963.
7. Life Insurance and the Life Insurance Corporation Act, 1956.
8. The General Insurance Business (Nationalization) Act, 1972.
9. Negotiable Instruments Act, 1881 (amended).
10. Information Technology Act, 2001 (amended).
11. The Right to Information Act, 2005

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LL.B.

BANKING AND INSURANCE LAW

Course Code: UL-LLB-604 Credits: 4

The core objectives of this course are to:

C) COURSE LEARNING OUTCOME

At the end of the course, the student will be able to:

1.1 Indian Banking Structure, origin and history, bank

2. Legal framework applicable to banking 15

2.1 Reserve Bank of India Act, 1934

3. Negotiable Instruments Act, 1881 10

3.1 Negotiable Instruments

4.1 Definition and meaning of insurance

5. Specific types of Insurance and law 10

5.1 The Insurance Act, 1938

6.1 E-Banking: Electronic Payments (digital cash) through ATM

Self-Learning Topics (Unit wise) and Self Learning Material

Sr. Sub- Topic Reference Material

1 1.1 Nationalization of banks in https://main.sci.gov.in/judgment/judis/1504.pdf

2 5.2 IRDAI (Insurance www.irdai.gov.in

E) RECOMMENDED READINGS/ REFERENCES

1. Reserve Bank of India Act, 1934.

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