Welcome to IIBF’s - JAIIB Virtual Classes. PRINCIPLES OF BANKING Module A & B April 15/2008. Financial System in India . Financial Sector consists of three main segments viz., 1) Financial institutions -banks, mutual funds, insurance companies 2) Financial markets -money market,
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PRINCIPLES OF BANKING
Module A & B
debt market,capital market, forex market
- Banking in India is governed by
BR Act,1949 and RBI Act,1934
- Banking in India is controlled/monitored
by RBI and Govt of India
- The controls for different banks are different
based on whether the bank/s is/are
a) statutory corporation
b) a banking company
c) a cooperative society
- BR Act covers banking companies and
cooperative banks, with certain modifications.
- BR Act is not applicable to
a) primary agricultural credit societies b) land development banks
licence for banks
Reserve Bank of India
powers and functions of RBI
business of banks
depositories/bankers to the issues
Mutual funds help their investors to enhance their value by investing the funds in capital market.
in India have diversified their banking activities by offering Para Banking facilities like
including ATM cards
mentioned foreign currencies and interest is also earned in such foreign currencies
account/s is/are for genuine purpose
important due to various reasons.
banks need to be careful in dealing with their clients.
- Securitisation and Reconstruction of
Financial Assets and Enforcement of
Security Interest Act (SRFAESI) was
enacted in 2002
_ Securitisation Company/Reconstruction
Company (SCRC) can finance the
acquistion from own resources or rise
sources from Qualified Institutional
viz., manufacturing units and service companies.
in plant and machinery and for service companies investments in equipment are
considered for classification as SMEs
- Loan documents are classified as
primary and secondary
- Documents are obtained based on the
type of credit facility/constitution of the borrower/nature of securities offered by the borrowers
- Documents should have a clear title
and can be valid to be enforced in a
court of law
- Wherever required documents need to be
executed by authorised persons.
of Evidence Act :
be produced for inspection of court
- certified copies
- copies made from or compared with