11-03-2014, 04:00 PM
BANKING REGULATION ACT, 1949
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1. Banking Regulation Act, 1949 is effective from 1-3-1949.
2. Earlier it was known as Banking Companies Act, 1949.
3. The Act is not applicable to :-
(i) Primary Agricultural Credit Societies (PACS),
(ii) Cooperative Land Mortgage/Development Banks and
(iii) Non-Agricultural primary credit societies.
4. The B.R.Act, 1949 is applicable on all Banks functioning in India.
IMPORTANT PROVISIONS ARE AS UNDER :
Section 5-b : BANKING: Banking means accepting for the purpose of lending or investment of deposits of money from public repayable on demand or otherwise and withdrawable by cheque, drafts order or otherwise.
ASSETS CLASSIFICATION:
Loan accounts are required to be classified in FOUR categories to assets :
1. Standaard Assets : Standard Assets is one which does not disclose any problems and which does not carry more than normal risk attached to the business.
2. Sub-Standaard Assets: is one which has been classified as NPA for a period not exceeding 18 months w.e.f.from the year ended March, 2001 (12 months w.e.f. March 31,2005)
3. Unsecured Substandard Accounts: Assets where no security has been obtained (or value of security was less than 10% of the balance) from the beginning, are treated as unsecured substandard accounts.
4. Doubtful Assets. : A Doubtful asset isone which has remained NPA for a period exceeding 18 months w.e.f. 1-4-2000 ( Now 12 months w.e.f. 31st March,2005).
5. Loss Assets : A Loss asset is one where loss has been identified by the bank or Internal Auditors or the RBI Inspectors, but the amount has not been written off, wholly or partly. (where no security is available).