KSLU Corner™ New AIBE previous QP

Banking Law

Semester 4 · 21 topics in 5 units

Past question papers for Banking Law

Unit I 3 topics

  1. History and evolution of banking in IndiaBanking abroad and in India from the goldsmiths and the shroffs to the Presidency Banks, the Imperial Bank and the RBI, the nationalisation of 1969 and 1980 and R.C. Cooper, and the liberalisation that followed the Narasimham Committee.7 min
  2. Bank: definition, kinds of banks and their functionsThe statutory definition of banking in s.5(b) of the Banking Regulation Act and its three elements, the kinds of banks from commercial and co-operative to RRBs, payments and small finance banks, their primary and secondary functions, and the legal questions raised by multi-functional banks.6 min
  3. Control over banking companies: management, accounts, lending, reconstruction and winding upHow the Banking Regulation Act, 1949 lets the RBI and the Central Government control a bank from licence to liquidation: licensing, board and management, capital and reserves, accounts, audit and inspection, lending and credit policy, moratorium and reconstruction under s.45, amalgamation under s.44A, suspension and winding up, with the 2025 amendments.7 min

Unit II 4 topics

  1. The central bank and the Reserve Bank of India: evolution, organisation and functionsWhat a central bank is and how it evolved, its characteristics and its economic and social objectives, and the Reserve Bank of India under the RBI Act, 1934: establishment, capital, the Central Board and Local Boards, and its role as banker to government and banker's bank.7 min
  2. RBI: monetary regulation, credit control, currency issue, exchange control and bank rateThe RBI's tools for regulating money and credit: quantitative controls (bank rate, CRR, SLR, open market operations, repo), selective credit control under s.21 of the Banking Regulation Act, the Monetary Policy Committee and the inflation target, the monopoly of note issue and demonetisation, and exchange control from FERA to FEMA.7 min
  3. Control of the RBI over non-banking companies, financial and non-financialChapter IIIB of the RBI Act: who is a non-banking institution, a financial institution and an NBFC, the principal business test, registration and net owned fund, reserve fund and liquid assets, directions, prohibition and winding up, the Peerless and crypto cases, and how deposits by non-financial companies are dealt with.6 min
  4. The Deposit Insurance and Credit Guarantee Corporation Act, 1961Why deposit insurance was introduced, how the DICGC is established and capitalised, which banks are registered as insured banks, what counts as a deposit, the extent and timing of the Corporation's liability to depositors including the 90-day interim payment of 2021, and the triangular relation of insured bank, DICGC and RBI.6 min

Unit III 5 topics

  1. Banker and customer: who they are and the legal character of the relationshipWho is a banker and who is a customer, the contract between them, and its legal character: debtor and creditor (Foley v. Hill, Joachimson), trustee, agent, bailee, lessor of lockers, and the element of trust recognised in Canara Bank v. Canara Sales Corporation.7 min
  2. Rights of a banker: lien, set-off, appropriation and chargesThe banker's general lien under s.171 of the Contract Act and where it does not reach, the right of set-off and combining accounts, appropriation of payments and the rule in Clayton's case, the right to charge interest and commission, and the statutory protections of bankers, with the debentures-in-custody problem worked out.8 min
  3. Duties of banker and customer: honouring cheques and secrecy of accountsThe banker's duty to honour cheques under s.31 of the NI Act and its limits, damages for wrongful dishonour, when payment must be refused, the duty of secrecy with the four Tournier exceptions and Indian statutory inroads, RBI v. Jayantilal Mistry, and the customer's corresponding duties.7 min
  4. Kinds of accounts, opening an account, and special classes of customersSavings, current, fixed, recurring and joint accounts, the precautions a banker takes on opening an account (KYC, mandate, nomination after the 2025 amendment), and the rules for special customers: minors, persons of unsound mind, illiterate persons, partnerships, companies, HUFs, trusts, clubs and local authorities, with the minor's FD loan problem.7 min
  5. Banking as a service: consumer protection and the RBI OmbudsmanWhy banking is a 'service' under the Consumer Protection Act, 2019, what counts as deficiency in banking service, the Commissions and their jurisdiction, and the RBI's own redress machinery from the Banking Ombudsman Scheme to the Integrated Ombudsman Schemes of 2021 and 2026.6 min

Unit IV 6 topics

  1. Negotiable instruments: meaning, characteristics, promissory note, bill of exchange and chequeSection 13 of the Negotiable Instruments Act and the features that make an instrument negotiable, the essentials of a promissory note under s.4 with its illustrations and s.31 of the RBI Act, bills of exchange and cheques including electronic and truncated cheques, the differences between them, and the 'I promise to pay Y on order' problem.9 min
  2. Holder and holder in due course, parties to instruments, their liability and payment in due courseThe holder under s.8 and the holder in due course under s.9 with its three conditions, the privileges of a holder in due course (ss.20, 36, 42, 43, 46, 53, 58, 118(g), 120-122), the parties and their capacity, the order and nature of their liability under ss.30-39, and payment in due course under s.10.7 min
  3. Negotiation, endorsement, assignment and presentmentHow negotiable instruments are transferred by delivery and indorsement, the kinds of indorsement (blank, full, restrictive, partial, conditional, sans recours, facultative), negotiation contrasted with assignment, presentment for acceptance and for payment, maturity and days of grace, and the cheque-presented-late problem.8 min
  4. Dishonour, noting and protest, acceptance for honour, material alteration, special rules of evidence and bills in setsDishonour by non-acceptance and non-payment and the notice of dishonour, noting and protest by a notary, acceptance and payment for honour with the 'can C accept for B' problem, the effect of material alteration under s.87 and its exceptions, the presumptions and estoppels of ss.118 to 122, and bills in sets.9 min
  5. Paying banker, collecting banker and crossing of chequesThe duties of the paying banker and its statutory protection under ss.10, 85, 89 and 128, why it has none against a forged drawer's signature, crossing of cheques (general, special, not negotiable, account payee), and the collecting banker's protection under s.131 with the negligence cases, Industrial Chain Concern and Kerala State Co-operative Marketing Federation.7 min
  6. Penal provisions for dishonour of cheques (ss.138-148) and the Bankers' Books Evidence Act, 1891The ingredients of the offence under s.138 and its time limits, the presumption under s.139 (Rangappa, Bir Singh), liability of companies (Aneeta Hada), territorial jurisdiction from Bhaskaran and Dashrath Rupsingh Rathod to the 2015 amendment, interim compensation and deposit in appeal, compounding (Damodar Prabhu, Meters and Instruments), the 2021 Constitution Bench directions and Sanjabij Tari, and how bank records are proved under the Bankers' Books Evidence Act.10 min

Unit V 3 topics

  1. Lending by banks: principles, priority sector, securities, interest and penaltyThe principles of sound lending, lending to the poor through priority sector targets and inclusion schemes, the kinds of security for advances with their merits and demerits, the precautions in lending against immovable property, and the law on rate of interest and penal charges.7 min
  2. Default and recovery: Debts Recovery Tribunals and the SARFAESI ActWhy special recovery law was needed, the Debts Recovery Tribunals and Appellate Tribunals under the Recovery of Debts and Bankruptcy Act, 1993 (jurisdiction, procedure, recovery certificate, appeal and pre-deposit), and enforcement of security without court under s.13 of the SARFAESI Act, 2002, with Mardia Chemicals, Transcore, Satyawati Tondon and Pandurang Chaugule.8 min
  3. Recent trends: e-banking, ATMs, internet and mobile banking, smart and credit cards, and their legal aspectsAutomation and core banking, ATMs, internet and mobile banking, UPI and the electronic payment systems, smart cards and credit cards, expert systems, and the law that governs them: the IT Act, 2000, electronic cheques and bankers' books, the Payment and Settlement Systems Act, 2007, RBI's customer liability framework, data protection and the e-rupee.6 min