Banking Law
Tamil Nadu Dr. Ambedkar Law University · LL.B. Semester 3 · TA3E
Unit I — Nature and Development of Banking
History of Banking in India and England - Different types of Banks and specific laws relating to them - Banking by individuals, Partnership firms, Cooperatives, Companies, Foreign Companies; Scheduled and Non scheduled Banks - Nationalization of Banks.
Unit II — Banker and Customer
Definition of ‘Banker’ - Business permitted and prohibited for a Banking Company. Definition of ‘Customer’- General Relationship between Banker and Customer. Special types of Bankers, Customers - Minors, Lunatics, illiterates, Executors, Hindu Joint Family, Partnership firms, Joint Stock companies, clubs, Societies, Charitable Associations, Trustees etc Banker as Borrower - Forms of Borrowing, Discounting of bills, Different types of deposits, payment before due date and Repayment of different types of deposits, attachment of deposits by the Courts and income tax authorities. Different types of accounts - Formalities involved for opening accounts, operating accounts, legal aspects of entries in pass books, effect of false entries, closing of a bank account. Duties of a Banker: To honour Cheques, To maintain secrecy, To disclose information, Countermanding of Cheques by customers. Rights of a Banker- General lien, set off, to combine accounts, to charge interest and service charges, appropriation (Rule in Clayton’s case) Banking instruments: Bank notes, Banker’s drafts, deposit receipts, letters of credit, indemnities, travelers Cheques, postal orders, dividend warrants, bonds.
Unit III — Paying Banker
Precautions to betaken by the paying banker-when banker must refuse payment, statutory protection given to the paying banker, Banker as payer of domiciled bills, Recovery of money paid by mistake.
Unit IV — Collecting Banker
Collecting banker as Holder for value - collecting banker as agent, conversion by collecting banker; duties and liabilities of a collecting banker; statutory protection given to the collecting banker.
Unit V — Laws Relating To Loans, Advances And Investments By Banks
Subsidiary business operations of bankers with special reference to Safety Deposit Lockers - Liability of banker in case of bank robberies and fraud by bank employees - Vicarious liability of the bank - Recovery of loans and advances - Recovery of debts due to banks, Financial Institutions Act, 1993. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002-Debt Recovery Tribunal-Banking and Insurance ombudsman.
Unit VI — Miscellaneous
RBI’s control over commercial banks - Special Status of RBI and State Bank of India - Subsidiary Banks - Effect of winding up of Banking companies - Rights of customers on winding up of companies - Necessity for reforms in Indian Banking Law to meet global challenges. E-Banking- ATM-CDM-Smart Cards-Net Banking- Electronic clearance system-Legal Issues,Regulating E-transactions, Reserve Bank of India’s contribution,e-bank issues,International transactions, credit cards and internet related laws,secure electronic transactions Negotiable Instruments :
Unit VII — Definition And Characteristics
Definition, Characteristics and categories of Negotiable Instruments, Definition and Characteristics of Promissory Note, Bill of Exchange and Cheques, Distinctions between them, Different Kinds of Bills, Hundis, Letters of Credit.
Unit VIII — Parties to Negotiable Instruments
Holder, holder in due course, Rights and Privileges of a Holder in Due Course, Capacity of parties.
Unit IX — Presentation
Presentation for Acceptance, Types of Acceptance, Presentation for payment; Maturity, when presentation is excused and when is it unnecessary. Effects of non presentation.
Unit X — Negotiation
Negotiation of Negotiable instruments, Negotiation distinguished from Assignment. Modes of Negotiation, kinds of Endorsements, negotiation by unauthorized persons.
Unit XI — Discharge And Dishonour
Discharge of instrument, Modes in which parties are discharged, Material alterations, dishonour of a bill of exchange; Modes of dishonour, Notice of Dishonour, Effect of dishonour, Noting, Protest, Compensation, Acceptance for Honour, Payment for Honour, Drawee in case of need.
Unit XII — Liability
Liability of various parties -Drawer, Maker, Drawee, Endorser; Liability for unjustified dishonour. When a banker is justified in refusing payments on a Cheque. Liability of transfer by delivery. Liability under Accommodation bills, Liability on Foreign instruments.
Unit XIII — Presumptions in favour of Negotiable Instruments.
Presumptions in favour of Negotiable Instruments.
Unit XIV — Cheques
Crossing of a Cheque, Different types of crossing, who may cross, payment of crossed Cheques, Rights of Holder against Banker.
Unit XV — Dishonour of Cheques
Dishonour of Cheques Civil and Criminal Liability for dishonour of Cheques under section 138 to section 142 of the Amended Negotiable Instruments Act.