Banking Law & Practice

Lets
Revise

Presente
d By
Bhavana

Agenda
S.No

Description

Indian Contract Act 1872

Relationship Between Banker & Customer

Rights Of a Banker

Duties Of a Banker

Bankers Obligations

Negotiable Instrument Act 1881 , Cheque

Bill Of Exchange

Consumer Protection Act ,Law Of Limitation

1963

Right to Information Act 2005, Information

Technology Act 2000

10

Bankers Book Evidence Act 1891, SARFAESI

Act 2002

11

Banking Ombudsman Scheme 2006

Indian Contract Act 1872

Prop
os
al

Ofer

Promis
e

Types Of Contract

abl
d
i
o
V
e
tra
n
o
C
ct

Val
Con id
tr a
ct

Voi
Co n d
tr a
ct

Ille
ga l
Con
trac
t

Un
e
ble nforc
Con ea
tr a
ct

Further Classified into

Imp
l

C
t
i
c
Ta

ied
C on
trac
t

ess
r
p
x
E
act
r
t
n
Co

ct
a
r
t
on

General and Special Relationship

Debtor and Creditor

Trustee and Beneficiary
Lessor and Lessee
Principal and Agent

Right
to
Gener
al
Lien
Pay
Only
When
Deman
ded

Rights
Of a
Banker

Right
to
Approp
riation

Right
to Set
Of

Right
to
Receiv
e
Commi
ssion

Repay
Money

Receive
Money

Duties Of a
Banker

Give notice
before
closing A/c

Maintain
Secrecy

Bankers Obligations

Abide
By the
Garnish
ee
Order

Honour
Cheque
s

No Wrongful
dishonour Of
Cheques

Negotiable Instrument Act, 1881

Transferred from person to person

towards settlement of monetary dues
without a physical cash is called
Negotiability
The paper used for such transactions is
called a Negotiable Instrument

Types of Negotiable Instruments

By Status

Bill of Exchange
Promissory Notes
Cheques

By Usage or
Custom

Hundis
Share Warrants
Bankers Drafts
Bearer Debentures
Railway Receipts
Circular Notes

Cheques

A Cheque is always Payable On demand.

S.No

Parties to a Cheque

Drawer: One who draws the Cheque

i.e. the account holder.

Drawee: The bank on which the

cheque is drawn.

Payee: The person who is named in the

cheque to Receive payment.

Endorser: The Payee who desires to

use the same Cheque to make his
payment to someone else.

Endorsee: the person who receives the

cheque from Endorser.

Example

For example , Pritam has an account with AN

Bank. He wants to pay R.s 2000 to Geeta.
Pritam:
Drawer

Draws
Cheque
to pay
Geeta

Geeta
Receives
Payment

AN Bank:
Drawee

Balu:
Endorsee

Geeta:
Payee

Balu
Receives
Payment

Geeta:
Endorser

Endorses
same
Cheque to
pay Balu

1.
2.

Endorsement
Classes of Endorsement

.Blank or General Endorsement

.Full or Special Endorsement
.Partial Endorsement
. Restrictive Endorsement

Types of crossing

General Crossing
Special Crossing
Not Negotiable
Account payee

What is Bearer and Order Cheque ??

Consumer Protection Act (COPRA),

1986

Banks Improper Conduct

Consumer Power

Law Of Limitations 1963

Introduction
Reasons for Statutes of Limitation
Triggering the Statutory Period
Limitation Period

Right to Information(RTI) Act, 2005

Right to information Include :

Access
Information

Inspect
Information

Obtain
Information

Application and Information

Fees
Rs. 2 for each
Page A4 Size Or
A3 Size

Right to
Information

Application
Fees Rs
10(Cash/DD/P
O)
Free Of Cost if
applicant is
below
poverty Line

Larger Page as
per Charge or
Cost Price
Sample and
model as per
costinspection
Or price
Free
for first hour.
Then, Rs.5 for
Every 15
minutes
Rs. 50 for Floppy
/ diskette
Rs. 2 per copy of
extract Or cost
of publication

Information Technology (IT), Act 2000

Information
Technology Act
2000 and Banks

DUE
DILIGENCE

Bankers Book Evidence Act 1891

Bankers Book Evidence Act

Definition Of Certified Copy
Bankers Certifications on bank
records used as Evidence

SARFAESI Act, 2002

Introduction
Asset
Reconstruc
tion
Company

Bank

Bad
LoanNPA

Borrowe
rs

Cont

Empowering Bankers
Borrower
Default
Asset Reconstruction

Banking Ombudsman Scheme,

2006

Grounds Filling Complaint to the

Banking Ombudsman
Methods to Filing the complaint
Complaint Resolution