Features of Banking Regulation Act, 1949
The Act has been divided into five parts and comprises 56 sections. The main features of the act are mentioned below:
- It prevents non-banking enterprises from taking demand-repayable deposits.
- It restricts trading related to non-banking entities to remove potential risks.
- It also establishes minimum capital requirements for the bank.
- It limits dividend payouts of the bank.
- This act provides the legal framework for banks registered outside of Indiaâs provinces.
- It helps in implementing an extensive licensing program for banks and their branches.
- It determines a unique format for the balance sheet and gives the Reserve Bank authority to call for periodic reports.
- This act gives the Reserve Bank the right to examine a bankâs books of accounts.
- Enabling the central government, the authority to take action against banks that conduct in a way that harms depositorsâ interests.
- A clause that calls for the Reserve Bank of India to communicate with banking institutions regularly.
- This act also establishes a quick liquidation procedure for the bank.
- It increases the capability of the Reserve Bank of India to assist banking institutions when emergencies arise.
Banking Regulation Act, 1949: Features, Objectives and Provisions
The Banking Regulation Act was passed by the Indian Parliament in 1949. The Banking Regulation Act, 1949 is like a rulebook for banks in India. It sets out the important rules they have to follow to keep things running smoothly. This article explores its key features, objectives, and provisions for a comprehensive understanding.
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