Introduction — Concept of Banking

Your uncle runs a textile shop in Crawford Market and takes money from relatives, promising to return it with interest. The branch near your college takes money from you and from thousands of strangers and promises to return it. Both are holding other people's money. Yet only one of them is doing the business of banking, and only one needs a licence from the Reserve Bank. Which words of the Banking Regulation Act draw that line?

In two minutes

Under s.5(b) of the Banking Regulation Act 1949, banking means accepting deposits of money from the public, for lending or investment, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise; only a licensed company may do it.

The rest of this chapter

The full explanation, the cheat sheet, every previous-year question at every mark weight, the quiz and the answer skeletons are part of Law of Banking and Negotiable Instruments on LexBlox Semester. Sign in to unlock the subject, or read Module 1 of Legal Language and Writing free.