In terms of Section 5(1) (5) of the Banking Regulation Act, 1949, a banking company means any company which

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In terms of Section 5(1) (5) of the Banking Regulation Act, 1949, a ‘banking company’ means any company which

A	accepts deposits from the public
B	undertakes lending of money
C	transacts the business of banking in
D	All of the above

Explanation:

Detailed explanation-1: -(i) “Banking” does not include other commercial activities of the banking institution; Rustom Cavasjee Cooper v. Union of India, AIR 1970 SC 564. (ii) The essential characteristic of banking is the ability to receive money by way of deposit from the customers and also to honour the customers’ cheque.

Detailed explanation-2: -Section 5A of Banking Regulation Act 1949: Act to override memorandum, articles, etc. (b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.]

Detailed explanation-3: -(b) “banking company” means any company which transacts the business of banking in India and includes the State Bank 2[and a subsidiary bank], but does not include the 3[Tamil Nadu Industrial Investment Corporation Limited].

Detailed explanation-4: -Section 20 of Banking Regulation Act, 1949 (B.R. Act, 1949) prohibits banks from granting any loan or advance to any of its Directors.

There is 1 question to complete.