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Banks
Shri M R Das
DGM
Difference between regulation
and supervision
Objectives of Regulation and
Supervision
To protect interests of depositors of banks
To ensure orderly development and conduct
of banking operations
To ensure liquidity and solvency of banks
To secure and ensure compliance with various
provisions, directions, policies etc.
To prevent any systemic crisis through
preventive and corrective measures.
Regulatory Functions
Legal Framework
RBI Act, 1934
BR Act, 1949
State Bank of India (SBI) Act, 1955, SBI
(Subsidiary Banks) Act, 1959 and Banking
Companies (Acquisition and Transfer of
Undertakings) Act 1970/1980.
RBI’s control over management
of banks
Provisions of BR Act 1949
-- u/s 10 A (2) – Constitution of the Board of
Directors
-- u/s 10 (B) – Appointment of Chairman
-- u/s 12 – Voting rights
-- u/s 36 (A) - Powers to remove managerial
and other persons
Control over operations of
banks
u/s 8
u/s 9 – Holding of immovable property
u/s 19 (2) – Holding shares of any company
u/s 20, 20 A
u/s 21
u/s 35 A
Amalgamation, reconstruction,
liquidation
u/s 36 AE – Power to acquire undertakings of
banking company (36 AF, AG)
u/s 38 – Winding up of a Banking Co.
u/s 44 (1) – Voluntary winding up
u/s 44 A – Voluntary amalgamation of
banking co.
u/s 45 – Compulsory amalgamation
Organisation of Regulatory and
Supervisory Functions