BANKING AFFAIRS

Detailed explanation-1: -45-IC. (1) Every non-banking financial company shall create a reserve fund and transfer therein a sum not less than twenty per cent. of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.

Detailed explanation-2: -In terms of Section 20(1) of the Banking Regulation Act, 1949, a bank cannot grant any loans and advances on the security of its own shares. Section 20(1) of the Banking Regulation Act, 1949 also lays down the restrictions on loans and advances to the Directors and the firms in which they hold substantial interest.

Detailed explanation-3: -(iii) By order of the Court under the Banker’s Books Evidence Act, 1891. When the court orders the banker to disclose information relating to a customer’s account, the banker is bound to do so.