The business of banking in India is governed by Banking Regulation Act, 1949 and Reserve Bank of India Act, 1934. As per Section 5(c) of the Banking Regulation Act, 1949 a “Banking Company” means any company which transacts the business of banking in India. As per Section 5(b) of the Banking Regulation Act, 1949, “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.
The bank performs following functions:
The Section 22 of Banking Regulation Act articulates that to carry out business of banking in India, one has to take license from Reserve Bank of India
In addition to the business of banking, a banking company may engage in any one or more of the following forms of business:
Section 8 of Banking Regulation Act prohibits banks from engaging activity of trading and associated risks. However it can do such buying or selling in connection:
Read Next: Constitution of Banks
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