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    Bank

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    mails.atul
    banking law

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    © All Rights Reserved
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    Bank

    Uploaded by

    mails.atul
    8 views3 pages
    banking law

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    © © All Rights Reserved

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    banking law

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8 views3 pages

    Bank

    Uploaded by

    mails.atul
    banking law

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    Bank

    Definition:-

    R.N. Chaudhary
    Bank is a banking company which trades in money.

    Britannica
    An institution that deals in money and its substitutes and provides other money related services

    Banking

    Definition:

    Banking regulation Act 1949

    Section 5(b)
     Except ability of deposit of money from public
     For the purpose of lending or investment
     Repayable on demand or otherwise
     Withdrawable by cheque, draft order or otherwise

    Whatever bank does is banking

    Banking Company

    Definition:
    Banking Regulation Act 5(b), 5(c)
    Any Company which translates the business of banking in India.

    Conditions:-
     Accept deposit.
     Purpose, lending or investment.
     Repayable on demand or otherwise.
     Withdrawable by cheque etc.
     Institution must be a company as defined under section 3 of companies act, 1956

    Bank Vs Banking Company

     Before Nationalisation - Banking companies.


     After Nationalisation – Banks.
     All Nationalised banking companies - banks.
    Companies not Banking Company
     Company engaged in goods, manufacturer, trade
     Although accept public deposits merely to finance its business.
     Not banking company as not accepting in prescribed manner for presented purpose.

    Customer
    Person can become a customer if
     Open account in bank.
     Start transaction i.e. first transaction take place

    If a person does not have account but makes casual transaction through bank - Not
    Customer

    Sir John Paget - Some continuity in dealing.

    Commissioner of Taxation versus English, Scottish and Australian bank


     Duration is not of essence.

    Case law: Savory & Co vs Lloyds bank Ltd

     Every Single transaction – Customer

    Relationship between Customer and Banker

     Debtor and Creditor


    Case Law: Iccha Vs Nath:
    o Money deposited, became property of banker, absolutely at his disposal.

     Contractual relationship
    o Mere opening of accounts by customer and acceptance by banker – CR.

     Agency Relationship
    o Banker on behalf of customer.
    o Buy/sell securities, collect cheque, promissory note etc.

     Affording facility of drawing funds.


    o Draw funds by issue of cheque.

     Banks refusal to provide service to customer- Not Proper


    o Supreme Court -Purewal and Association versus PNB

     Relationship to be maintained meticulously.


    o Both Maintain
     By fear action
     Promptness.
     Observance of rule of law
    Otherwise defaulter liable for offence/loss
    ------------------------------
    Services/Functions Of Bank

    A) Primary/Essential/Main
    B) Subsidiary
    C) Miscellaneous

    Primary

    1. Accepting deposit
    a) lifeline of banks
    b) Basis for other activities
    c) Account types-Term Deposit-Fixed Deposit, Recurring Deposit, Saving Deposit
    1. Demand Deposit – Current Deposit (Everyday Payment)

    2. Lending of Money
    a) Source of profit
    b) Loan, advances, overdraft facility.

    3. Cheque
    a) Cheque Issuance- Exclusive rights of Banks

    4. Remittance of funds
    a) Send money to another party
    b) CBS, Draft

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