CS PROFESSIONAL- ELECTIVE 1 - BANKING LAW AND PRACTICE

MODULE 3 ELECTIVE PAPER 1

BANKING LAW AND PRACTICE

Regulatory Framework and Compliances

A. Provisions of RBI Act 1935, Banking Regulation Act 1949, Prevention of Money Laundering Act, 2002
B. Government and RBI’s Powers

1. Opening of New Banks and Branch Licensing

2. Constitution of Board of Directors and their Rights

3. Banks Share Holders and their Rights

4. CRR and SLR Concepts

5. Cash-Currency Management

6. Winding up – Amalgamation and Mergers

7. Powers to Control Advances – Selective Credit Control – Monetary and Credit Policy

8. Audit and Inspection

9. Supervision and Control – Board for Financial Supervision – its Scope and Role

10. Disclosure of Accounts and Balance Sheets

11. Submission of Returns to RBI

12. Corporate Governance

Legal Aspects of Banking Operations

1. Case Laws on Responsibility of Paying and Collecting Banker Indemnities or Guarantees – Scope and Application – Obligations of a Banker – Precautions and Rights – Laws relating to Bill Finance, LC and Deferred Payments – Laws Relating to Securities – Valuation of Securities – Modes of Charging Securities – Lien, Pledge, Mortgage, Hypothecation etc. – Registration of Firms/Companies – Creation of Charge and Satisfaction of Charge

Banking Related Laws

1. Law of Limitation – Provisions of Bankers Book Evidence Act – Special Features of Recovery of Debts Due to Banks and Financial Institutions Act, 1993

2. TDS

3. Banking Cash Transaction Tax

4. Service Tax

5. Asset Reconstruction Companies

6. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

7. The Consumer Protection Act, 1986

8. Banking Ombudsman

9. Lok Adalats

10. Lender’s Liability Act

Banker – Customer Relations

1. The legal relationship between the Banker and Customer, the Multifarious Transactions between them and the Rights and Duties of the Parties springing out of such relationship

2. Nature of Banking Business

3. Legal Nature of Banker-Customer Relationship and their Mutual Rights and Duties

4. Special Categories of Customers, such as Corporations, Partnership Firms, Hindu Joint Families, Unincorporated Bodies, Trusts, Joint Account Holders, Minors, Nominee Accounts, Liquidator, Mercantile Agents, Non-Resident Indians, Foreigners and the Legal Incidence of Each

5. Different Types of Accounts such as Current Accounts, Savings Bank Account and Fixed Deposits

6. Other Transactions between Banker and Customer such as Safe Deposit Vaults, Financial Advice, Letters of Introduction and Other Services Rendered by Banks

7. Special features of the relationship between banker and customer – Their mutual rights and duties – lien – Power to combine different accounts – Secrecy of account

Loans and Advances

1. Law, Practice and Policies governing the employment of the funds in the hands of the banker with special reference to the lending banker

2. State Policy on Loans and Advances – Priority sector advances and socio-economic policies – Financial inclusion – SelfEmployment Schemes – Women Entrepreneurs – Small Scale Industries – Agricultural Finance, Export Finance, etc. – Micro Finance – How the banker profitably uses the fund – Call loans and loans repayable at short notice – Loans and advances – Overdrafts – Legal control over bank’s deployment of funds

Securities for Banker’s Loans

1. The legal issues involved in and the practice governing the different kinds of securities for banker’s advances and loans

2. Guarantees, pledge, lien, mortgage, charge – subject matters of collateral security

3. Corporate Securities

4. Documents of title to goods

5. Land and Buildings

6. Book debts

7. Life Policies

8. Factoring; Bill Discounting; Bank Guarantees; Letters of Credit; Commercial Papers

Financial Analysis of Banks

1. Introduction; Role of financial analysis in financial management; Techniques of Financial Analysis; DuPont Model of Financial Analysis; Special issues in Financial Analysis of Banking Industry

Financial System Contemporary and Emerging Issues: An Overview

1. Introduction; Role of Financial System; Capital Flow Through Intermediary Financial Institutions; Direct Capital Flow; Primary Market Products; Primary Market Issue Facilitators; Secondary Market; Economic Importance of Financial Markets.

International Banking Management

1. International Banking : An Overview

2. Legal & Regulatory Framework

3. International Banking Operations Management

4. Risk Management in International Banking

5. Special Issues: Technology and International Banking; Globalisation and International Banking; Financial Innovations in International Banking

Electronic Banking and IT in Banks

1. IT in Banking : An Introduction

2. IT Applications in Banking- Computer-Based Information Systems for Banking; Electronic Banking; Electronic Fund Management

3. Enabling Technologies of Modern Banking- Electronic Commerce and Banking; Supply Chain Management; Customer Relationship Management; Integrated Communication Networks for Banks

4. Security and Control Systems – Cybercrimes and fraud management

5. Planning and Implementation of Information Systems

Risk Management in Banks

1. Risk Management: An Overview

2. Credit Risk Management

3. Liquidity and Market Risk Management

4. Operational Risk Management

5. Special Issues- Risk Management Organisation; Reporting of Banking Risk; Risk Adjusted Performance Evaluation

6. Basel III

Ethics and Corporate Governance in Banks

1. Ethics and Business

2. Corporate Governance

3. Corporate Social Responsibility

4. Governance in Financial Sector