RBI rules & Notifications (Banking) 1949

Your bank suddenly stops letting you withdraw more than a small sum, or a news flash says the Reserve Bank has told all banks to change how they lend. Parliament did not pass a new Act that morning. So where did the order come from, and why must every bank obey it? The answer lies in the Banking Regulation Act 1949 itself, which hands the Reserve Bank and the Central Government powers to make rules, issue notifications and give directions.

In two minutes

The Banking Regulation Act sets the skeleton and delegates the detail: the Central Government makes rules, the Reserve Bank issues notifications and binding directions, and every bank must comply.

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.