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Bank

banking law

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17 views3 pages

Bank

banking law

Uploaded by

mails.atul
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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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