Brave Series Abridged

BRAVE SERIES ABRIDGED VERSION

PART A - Banking Related Acts 157

SNAPSHOT OF IMPORTANT SECTIONSOF THE VARIOUS ACTS

CHAPTER 1 - Important Sections of SBI Act, 1955

Sections Details/Particulars

1 Chapter 1-Short title & commencement

2 Definitions

Chapter 2-Incorporation & Share Capital of SBI

3 Establishment of State Bank

4 Authorised Capital

5 Issued Capital

Chapter 3-Transfer of Undertaking of the Imperial Bank to State Bank

6 Transfer of assets & liabilities of the IBI to SBI

7 Transfer of service of existing officers and employees of the IBI

8 Existing provident and other fund of the IBI

9 Compensation to be given to shareholders of IBI

Chapter-4 Shares

10 Transferability of shares

11 Restrictions on voting rights

12 Shares to be approved securities

13 Register of shareholders

13A Register of beneficial owners

14 (Repeales)

15 Trusts not to be entered on the register of shareholders

Chapter-5 Management

16 Offices, branches & agencies

17 Management

18 Central Board to be guided by directions of Central Government

19 Composition of the Central Board

20 Term of office of chairman, managing director, etc.,

21 Local Boards

21A Term of office of members of Local Board

21B Power of Local Board

21C Local Committees

22 Disqualifications for directorship of Central Board or membership of Local Board orCommittees

23 Vacation of office of directors, etc.,

24 Removal from office of directors, etc.,

25 Casual vacancies

26 Remuneration of directors

BRAVE - Banking Related Acts and Various Enactments158

27 Powers and remuneration of chairman

28 Powers and remuneration of vice-chairman

29 Powers and remuneration of managing director

30 Executive and other committees of the Central Board

31 Meetings of the Central Board

31A Meetings of Local Boards

Chapter-6 Business of the State Bank

32 State Bank to act as agent of the Reserve Bank

33 Other business which the State Bank may transact

34 Business which the State Bank may not transact

35 State Bank may acquire the business of other Bank

35A Arrangement with the State Bank on appointment of directors to prevail

Chapter-7 Funds, Accounts and Audit

36 Integration and Development Fund

37 Reserve Fund

38 Disposal of profits

39 Books to be balanced each year

40 Returns

41 Audit

42 Balance Sheet, etc., of State Bank may be discussed at general meeting

Chapter-8 Miscellaneous

43 State Bank may appoint officers and other employees

43A Bonus

44 Obligations as to fidelity and secrecy

45 Bar to liquidation of State Bank

46 Indemnity of directors and members of Local Boards and Local Committees, etc.,

47 Defects in appointment or constitution not to invalidate acts or proceedings

48 (Repealed)

49 Power of Central Government to make rules

50 Power of Central Board to make regulations

51 Requirements of foreign law to be complied within certain cases

52 (Repealed)

53 (Repealed)

54 (Repealed)

55 No proceeding to lie in India against Imperial Bank after appointed day

56 References to the Imperial Bank, the Bank of Bengal, etc., in other laws

57 Dissolution of Imperial Bank, etc.,

The First Schedule � compensation for the Transfer of shares of the Imperial Bankto the Reserve Bank

The Second Schedule- Declaration of Fidelity and Secrecy

The Third Schedule- (Repealed)

The Fourth Schedule-(Repealed)

The Fifth Schedule-(Repaled)


CHAPTER 2Important sections of RBI ACT

SECTIONS CONTENTS

Sec. 2(e) Scheduled Bank: As per this Section, a scheduled bank means a bank whosename is included in the 2

nd schedule of RBI Act 1934. For inclusion, a bank should

satisfy conditions laid down in section 42(6).The essential condition of capital isthat the affairs will be conducted by the bank in a way that will not jeopardize theinterests of the depositors.

Bank which are not included in the 2nd

Schedule of RBI are called Non-scheduledBank.

Sec.17 Types of Business: Defines various types of business which RBI may transact,which include acceptance of deposit without interest from Central/State government,any other person/institution, purchase/sale of foreign exchange, securities,rediscounting the bills/promissory notes, grant loans etc.

Sec.18 Energy Loans: RBI provides emergency loans to banks on liberal terms.

Sec.21 Right to Transact Govt. Business: RBI has the right to transact Govt. businessin India i.e. remittance, exchange, keeping deposit free of interest etc.

Sec.22 Bank Notes: Sole right to issue bank notes.

Sec.23 Issue Department: Bank notes shall be issued by Issue Deptt. Against securityconsisting of gold coins, bullion, rupee coins, foreign securities and other approvedsecurities.

Sec.24 Denomination of Notes: RBI issues all currency notes for denomination2,5,10,20,50,100,500,1000,5,000,10,000. It has power to direct discontinuationor non-issue of currency note of any denomination. The currency note ofdenomination of rupee 2 and 5 has already been discontinued.

Sec.28 Rules for Refunding Value: RBI can frame rules for refunding value of mutilated,soiled or imperfect notes as a matter of grace.

Sec.31 Prohibits issue of Bill of Exchange, Hundi or Promissory Note payable to bearer: Noperson in India other than RBI or the central Govt. is authorized to draw, acceptmake or issue any bill of exchange, hundi, and promissory note payable to bearer.Further it restricts on drawing bearer drafts.

Sec.33 Assets of the Issue Department: The assets if issue deptt. Consists of goldcoins, gold bullion, foreign securities etc. The aggregate value of gold coins, goldbullion, and foreign securities held as assets and the aggregate value of the goldcoins, and gold bullion so held shall not at any time be less than Rs 200 crores andRs 115 crores respectively.

Sec.42(1) Cash Reserve Ratio: RBI (Amendment) Bill 2006 has been enacted with effectfrom June 22, 2006. Consequent upon the amendment, RBI can prescribe theCash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceilingrate. Further, RBI will not be applying any interest on the CRR balances maintainedby Scheduled Commercial Banks with effect from the fortnight beginning June 24,2006 (earlier the floor limit was 3% and ceiling limit was 20%).

Sec.45-A-F Collecting and Furnishing of Credit Information: Empowers RBI to collectcredit information related to borrowers and suit-filed accounts.

· Borrower enjoying secured credit limits of Rs.10 lac and above unsecured limitsof Rs.5 lac and above: Return as on last Friday of April and approval every year.


· Doubtful, loss and suit filed accounts with aggregate of outstanding Rs.100 lacand above: Half-yearly March and September.

· Basic Statistical Return (BSR): BSR-I regarding borrowal accounts of aboveRs.2 lac. BSR-II containing information about deposits with break-up into currentsavings and term deposits.

Sec.45-H-T Provision relating to Non-banking Institution: No non-banking financialcompany shall commence business or carry on the business of a non-bankingfinancial company without obtaining a certificate of registration and having netowned fund of twenty-five lac rupees or such other amount not exceeding twohundred lac rupees, as the RBI may notify / specify.

Sec.49 Publication(Declaration) of Bank Rate: RBI shall make public from time to thestandard rate at which it is prepared to buy or re-discount bills of exchange orother commercial paper eligible for purchase under this Act.

CHAPTER 3

Important sections of Banking Regulations Act-1949SECTION DESCRIPTION

Sec.5(a) Approved Securities: It mean such securities authorized by the Central Govt. ofsecurities in which a trustee may invest money of trust under Indian Trust Act1882.

Sec.5(b) Banking: Banking means the acceptance of deposit for the purpose of lending orinvestment, the deposits of money from the public, repayable on demand orotherwise, and withdrawal by cheque, draft, order or otherwise.

Sec.5(c) Banking Company: It means any company, which transacts the business ofBanking in India.

Sec.5(ca) Banking Policy: Policy which is specified from time to time by RBI.

Sec.6 Forms of Banking Business: In addition to the banking business, a bankingcompany may engage in raising/accepting deposits, borrowing, money lending oradvancing of money, dealing in bills of exchange, hundis, promissory notes, issuingletter of credits, buying and selling of foreign exchange, safe deposit locker, safecustody, acting as an agent for any Govt. or local authority, undertaking theadministration of estates as executor, trustee, leasing, mortgaging etc, or anyother form of business which the Central Govt. may notify in the official Gazette.

Sec.8 Prohibition on Trading: No banking company shall directly or indirectly deal onthe buying or selling of goods (every kind of movable property other than actionableclaim), except in connection with realization of security held by it.

Sec.9 Disposal of Non-Banking Assets: No bank shall hold any immovable propertyhowsoever acquired (except for its own use) for any period exceeding 7 years.RBI may extend the period by 5 years where it is satisfied that such extensionwould be in the interest of the depositors of the bank.

Sec.10 Employment of Managing Agents: The period of office of an MD/whole timeChairman cannot exceed 5 years at a time (may be renewed or extended byfurther periods not exceeding 5 years on each occasion). No bank can employ aperson who is/has been adjudged insolvent or has suspended payment to hiscreditors or his compounded with his creditors or who has been convicted of anoffence involving moral turpitude.


Sec.11 Paid up Capital and Reserve Requirement.

For Domestic Banks � Minimum Paid up Capital and Reserves Rs. 5 lac.

For Foreign Banks � Minimum Rs. 15 lac (it is Rs. 20.00 lac where the bank hasplace of business in Bombay, or Calcutta or both).

Sec.12 Capital Structure � The ratio of authorized, subscribed and paid-up capital mustbe minimum 4:2:1.

Sec.13 Restriction on Commission, Brokerage, Discount etc: Stipulation that a bankwill not pay commission, brokerage, discount, etc. more than 2.5% of the paid upvalue of one share.

Sec.14 Prohibition on Charge on Unpaid Capital: No bank shall create any chargeupon any unpaid capital. Any such charge shall be invalid.

Sec.14(a) Prohibition of Floating Charge on Assets: No Banking company shall create afloating charge on the undertaking or any property unless the same is certified inwriting by RBI.

Sec.15 Payment of Dividend: Prohibits payment of dividend by any bank until all of itscapitalized expenses have been completely written off.

Sec.16 Common Directors: No bank shall have a director on its Board of Directors anyperson who is a director of any other banking company.

Sec.17(1) Reserve Fund: Stipulation that a bank must create reserve fund equivalent to notless than 20% of profits out of the balance of profit of each year, before anydividend is declared (RBI has enhanced it to 25% of net profit w.e.f. 31

st March

2001).

Sec.18 Cash Reserve: Every banking company, not being a scheduled bank shall maintain3% of demand and time liabilities by way of cash reserve with itself or by way ofbalance in current account with RBI.

Sec.19 Restriction on nature of subsidiary company: A bank shall not form anysubsidiary company except for undertaking business which is permissible for abanking company.

Sec.19(2) Holding of Shares of any Company: No banking company shall hold shares inany company whether as pledge, mortgagee or absolute owner of an amountexceeding 30% of paid-up share capital of that company or 30% of its own paid-up capital and reserves, whichever is less.

Sec.20 Restriction on advances against own shares: No banking company shall grantloans/advances on the security of its own shares, since it shall amount to purchaseof its own capital.

Sec.21 Powers to Control Advances: Where the Reserve Bank is satisfied that it isnecessary and expedient in the public interest or in the interest of depositors orbanking policy they may frame any policy which shall be binding on bankingcompanies generally or on any banking company in particular. RBI can restrict thebanks from lending against certain notified commodities, maintenance of a minimummargin, ceiling limit of advance or the charging of a minimum rate of interest etc.

Sec.21(a) Rate of Interest charged by banks not to be subject to scrutiny by Courts:A transaction between the banking company and its debtor shall not be reopenedby any court on the ground of excessive charging of rate of interest.

Sec.22 Licensing of Banking Companies: No Banking company can commence thebusiness without obtaining the license from RBI.

Sec.23 Restriction on Opening of New and Transfer of Existing Place of Business:Prior permission of RBI is required for opening of new branch, sub-office, sub payoffice, and extension counter etc except for one month.


Sec.24 Maintenance of SLR: A banking company is required to maintain at the close ofbusiness on any day a certain percentage of its total demand and time liabilities inIndia in form of cash, gold and unencumbered approved securities. This is knownas SLR.

· Minimum SLR 25% and Maximum 40% to be maintained.

· SLR to be maintained with reference to Total Demand and Time Liabilities as onlast Friday of the second preceding fortnight.

Sec.25 Assets in India: The assets of every banking company as on last Friday of everyquarter must not be less than 75% of its demand and time liabilities in India.

Sec.26 Return of Unclaimed Deposits: Every Bank shall within 30 days after the closeof each calendar year submit a return to RBI on all deposit accounts which havenot been operated upon for 10 years (unclaimed accounts). In case of FixedDeposits, this period will start from due date i.e. date of expiry of such fixedperiod.

Sec.29 Accounts and Balance Sheet: Balance sheet and Profit & Loss a/c must beprepared as on last working day of March every year in the format given in IIISchedule of the Act.

Sec.30 Audit: The balance sheet and profit and loss account shall be audited by a personduly qualified.

Sec.31 Submission of Return: The a/cs and balance sheet together with the auditorsreport shall be published in the prescribed manner and 3 copies of the same shallbe furnished to RBI within 3 months from the end of the period to which thebalance sheet pertains.

Sec.35 Inspection: empowers RBI to undertake inspection of banks.

Sec.35(A) RBI has been given powers to give directions to the banks in the public interest arein the interest of banking policy so that banking is not conducted detrimental tothe interest of the depositors and also secures proper management of bankingcompany.

Sec.36(AA) Powers to Remove Managerial or other persons: Where the RBI is satisfiedthat in the public interest or for preventing the affairs of a banking company beingconducted in a manner detrimental to the interest of the depositors or for securingthe proper management of any banking company, RBI may remove from officeany Chairman, Director or other officers or employees of the banking company.

Sec.44(A) Amalgamation of Banking Companies: The Scheme containing the terms ofamalgamation shall first be approved by general body by two third majority invalue and then further approval by RBI is required.

Sec.45(y) Preservation of Bank Records: Central Govt. in consultation with RBI haspower to frame rules regarding preservation of books, accounts and otherdocuments.

Sec.45 Z Returns of Paid Instruments to Customer: Guidelines for returning the paidinstruments to customer by keeping a true copy.

Sec.45 ZA Nomination: For nomination in Deposit accounts.

Sec.45 ZC Nomination: For nomination in Safe Custody accounts.

Sec.45 ZE Nomination: For nomination in Locker accounts.

Sec.46 Penalties: Whoever in any return, balance sheet or other documents willfullymakes a statement which is false in any material particular or willfully omits tomake a material statement shall be punishable with imprisonment for a term whichmay extend to three years and shall also be liable to fine.


CHAPTER-4CRR & SLR -(Scheduled Commercial Banks)

SLPARTICULARS

CASH RESERVE STATUTORY LIQUIDITYNO. RATIO(CRR) RATIO(SLR)

1 Concept andObjectives

2 Provision

3 Limits

4 Current Obligation

5 Applicable on

6 Maintained with

7 Type of Investment

8 Requirements

CRR is a quantitative tool ofmonetary and credit policyto regulate the moneysupply in the economy. RBIby varying the CRRregulates the lendablefunds of the commercialbanks.

Section 42(1) of ReserveBank Act �1934

Subsequent to amendmentsto RBI act minimum/maximum are no moreprescribed. CRR will bestipulated by RBI as per itsdiscretion.

5.5% (w.e.f.6th Jan 2007).

Net Demand and TimeLiabilities (NDTL) In Indiaon fortnightly basis.

RBI

In cash only

Fortnightly Basis:Saturday to following Friday� 14 days.Daily Basis: All schedulecommercial banks arerequired to maintainminimum CRR balance upto 70% of the total CRRrequirement on all days ofthe fortnight.

STATUTORY LIQUIDITYRATIO(SLR)

SLR is a quantitative tool ofmonetary and credit policy toregulate the money supply inthe economy. RBI by varyingthe SLR regulates the lendablefunds of the commercial banks,by way of investments in Govt.securities.

Section 24 (2-A) of BR Act �1949.

Minimum 25% andMaximum 40%

25%

Total Demand and TimeLiabilities in India as on the lastFriday of the second precedingfortnight.

To be kept in Securities withinIndia.

(a) In cash (b) Gold or (c)Unencumbered approvedsecurities defined u/s 5(a) and25(a) of BR Act.

Last Friday of second precedingfortnight.


SLPARTICULARS


9 Conversion

10 Loans out of FCNR(B) Deposits andIBFC Deposits

11 Interest

12 Penalties

Overseas foreign currencyassets and bank credit inIndia in foreign currency infour major currencies viz.US $, GBP, Japanese Yenand Euro at the FEDAI noonmean rate to be convertedon reporting Friday.

Loans out of ForeignCurrency Non-ResidentAccounts (Bank), FCNE (B),and Inter Bank ForeignCurrency Deposits to beincluded.

As per RBI (Amendment)Bill 2006 w.e.f. June 22,2006, RBI can prescribeCRR without any floor rateor ceiling rate. Further, RBIwill not be paying anyinterest on the CRRbalances w.e.f. the fortnightbeginning June 24,2006.

Any shortfall in themaintenance of CRR isreckoned against theeligible cash balancerequired to be maintainedon the NDTL. The totalamount on interest payableso arrived at is beingreduced by an amountcalculated at the rate of25% per annum on theamount of shortfall.

Overseas foreign currencyassets and bank credit in Indiain foreign currency in fourmajor currencies viz. US $,GEP, Japanese Yen and Euro atthe FEDAI noon mean rate tobe converted on reportingFriday.

Loans out of Foreign CurrencyNon-Resident Accounts (Bank),FCNE (B), and Inter BankForeign Currency Deposits tobe included.

Return depends upon type ofinvestment made by the bank.

If a bank fails to maintainrequired amount of SLR, it shallbe liable to pay to RBI inrespect of that default, thepenal interest for that day atthe rate of 3% per annumabove bank rate on theshortfall and if the defaultcontinuous on the nextsucceeding working day, thepenal interest may be increasedto a rate of 5% per annumabove the bank rate for theconcerned days of default onthe shortfall.


SLPARTICULARS


13 Returns All SCBs are required tosubmit to RBI a provisionalreturn in Form A within 7days from the expiry ofrelevant fortnight. It is usedfor preparing presscommuniqué.

The final Form A is requiredto be sent to RBI within 20days from expiry of therelevant fortnight.

Banks should submit to theRBI before 20th day of everymonth, a return in Form VIII,showing the amounts of SLRheld on alternative Fridayduring immediate precedingmonth with particulars of theirDTL in India on such Fridays orif any such Friday is publicholiday under NI Act, at theclose of business of thepreceding working day.

CHAPTER 5Various Types of Banker Customer Relationships

Some important relationships based upon the nature of business conducted by the banks aregiven below:

SL. TYPE OF POSITION POSITIONNO. TRANSACTION OF BANK OF CUSTOMER

1 Deposit Accounts, CC (with Credit Balance) Debtor Creditor

2 O.D, CC, Loan Accounts (with debit balance) Creditor Debtor

3 Collection of Cheques Agent Principal

4 Sale or Purchase of Securities Agent Principal

5 Issuing / Purchase of Draft by purchaser Debtor Creditor

6 Payee of Drafts at Paying Branch Trustee Beneficiary

7 Mail Transfers, Telegraphic Transfers Agent Principal

8 Complying with Standing Instruction Agent Principal

9 Providing Various Services to non Agent PrincipalAccount Holders

10 Money / Cheques deposited pending Trustee BeneficiaryInstructions for disposal thereof

11 Safe Custody of Articles Bailee Bailor

12 Leasing of Locker Lessor LesseeLandlord TenantLicensor Licensee

13 Mortgage of Immovable Property Mortgagee Mortgagor

14 Pledge of Securities / Shares Pledgee Pledgor

15 Hypothecation of Securities Hypothecatee Hypothecator

16 Sale / Purchase of Shares etc Agent Principal

17 Maintaining Currency Chest (RBI�s property) Agent Principal


18 Fixed Deposit has matured but the customer Debtor Creditorhas not taken the payment so far.

19 A wrong credit given by the bank where the Beneficiary Trusteeamount has not so far been recovered.

CHAPTER 6

Important Sections of Negotiable Instruments Act,1881

SECTION CONTENTS / TITLE

1 Act is applicable throughout India including J & K

3 Banker includes any person acting as a banker and any post office saving bank

4 Definition of Promissory Note

5 Definition of Bill of Exchange

6 Definition of Cheque

8 Holder

9 Holder in due course

10 Payment in due course

13 Meaning of Negotiable instrument

15 Endorsement: Endorsement should be in free running handwriting and not in blockletters also it should tally, letter to letter, with the name of the payee in the cheque

18 When there is difference in amount between the words and figures, the amount inwords is to be treated as the amount ordered by the drawer to pay

20 Inchoate Instrument

22 Three days of grace for calculating the maturity date of usance instrument

25 Maturity date in holiday usance instrument is payable on next preceding businessday

26 Minor may draw, endorse and accept a negotiable instrument so as to bind all partsexcept himself

31 Liability of drawee banker: Banker to compensate for wrongful dishonour

45A Holder rights to get duplicate of lost bill

63 The drawee of a Bill of Exchange has to accept it within 48 hours of presentation(excluding public holidays)

82 If no rate of interest is mentioned in the Promissory Note, interest @ 18% p.a. is tobe paid

85-A Protection paying banker in case of Bank drafts.

85-(1) Paying banker is protected by payment in due course of an order cheque which isproperly endorsed by the payee or his agent

85-(2) Protection to Paying banker in case of bearer cheque. Once a bearer, always a bearer

87 Material alteration of Negotiable Instrument renders it void

89 Paying Banker gets protection where a cheque is materially altered but does notappear to have been altered

SL. TYPE OF POSITION POSITIONNO. TRANSACTION OF BANK OF CUSTOMER


99 Noting

100 Protest

118 Presumptions as to negotiable instruments of consideration

123 Cheque crossed Generally

124 Cheque crossed Specially

128 Payment in due course of crossed cheque

130 Not Negotiable crossing � The transferee cannot have a better title to the chequethan that of the transferor

131 Collecting Banker�s protection in respect of crossed cheques

138 Dishonour of cheque for insufficiency, etc. of funds in the account

139 Presumption in favour of holder

142 The payee / holder of the cheque should file a case within 1 month under Sec 138 ofNI Act

HOLDER (Sec.8) HOLDER IN DUE COURSE (Sec.9)

Consideration Not essential Essential

Actual Possession Not essential Essential

Defective Title Will effect the Will not effect the instrument.instrument

Note: But due to the presumptions given in Section 118 of Negotiable Instrument Act in favourof holder this difference has become immaterial / insignificant.

Difference between BoE & ChequeBILL OF EXCHANGE CHEQUE

Can be drawn payable on demand or usance It is always payable on demand

Drawee of the bill can be any one It is drawn on a bank and such draweecan be only a bank

Usance bills need to be accepted Cheque does not require acceptance

Grace period of 3 days is allowed in Grace period is not allowedcase of usance bill

Bills are not crossed Cheque can be crossed

Can be made payable on demand or on Cheque is always payable on demand up tomaturity date (due day) the time it does not become stale.

Various types of Customers & Natural Guardians of a minora) Hindu Father and after the death of Father, the Mother of minor

b) Married Hindu Girl Husband

c) Window Hindu Girl Guardian of the husband

d) Illegitimate Boy or Mother and after her fatherillegitimate unmarried girl

e) Adopted Son Adoptive Father and after him the adoptive mother


f) Minor with Step Father Mother and after her father

g) Minor with Step Mother Father and after him mother

h) Muslim Father and after him executor of fathers will except motherand after him fathers father

CHAPTER 7

Important sections of Partnership Act 1932

S 18 A Partner is an agent of the firm for the purposes of the business of the firm.

S 19 Each partner is an agent of other partners; hence, has an equal right to manage thepartnership business.

S 20 Implied authority of a partner can be curtailed or enlarged by all partners.

S 25 Joint and several liability of partners for all acts done while he is a partner.

S 30 A minor can be admitted to the benefits of a partnership.

S 42 Death, insolvency etc of a partner dissolves the partnership.

S 69 A registered firm can sue its creditors. An unregistered firm cannot, but the creditorsof an unregistered firm can sue the firm.

CHAPTER 8

Important sections of Indian Companies Act (1956)S 11 No partnership / association can be formed with more than 20 partners. In the case

of banking firms, the number shall not exceed 10.

S 48 A company may empower person to act as its attorney. The authorization should bein writing and under the common seal of the company.

S 100 A special resolution is necessary for reduction of capital of a company; further, theapproval of National Company Law Tribunal�s (NCLT) is required.

S 125 Charges to be filed with the Registrar of companies within 30 days from the date ofcreation.

S 130(3) The Register of Charges kept by the Company Registrar is open for inspection by anyperson on payment of a fee. These facilities the prospective creditor can find outwhether any charge is subsisting on the assets of the Company.

S 135 Modification of Charge to be filed.

S 138 Satisfaction of Charge to be filed.

S 141 If a Charge is not registered within 60 days, the company or any �Interested� partycan approach NCL for registration showing satisfactory reasons for the omission.

S293 If the borrowings exceed the aggregate of the paid up capital and free reserves, the(1)(d) borrowings should be authorized by the general meeting of the shareholders.


CHAPTER 9

Verification of Documents obtained from Customers

FEATURES

Accounts of Individuals· Legal name and any other names

used.· Correct permanent address

Accounts of Companies· Name of the Company· Principal place of business· Mailing address, Telephone / Fax

Number

Accounts of Partnership Firms· Legal name· Address· Names of all partners and their

addresses, Telephone numbers.

Accounts of Trusts & Foundations· Names of trustees, settlers,

beneficiaries and signatories· Names and addresses of the

founder, the managers,/directorsand the beneficiaries, Telephone /Fax numbers.

DOCUMENTS

(i)Passport (ii) PAN card (iii) Voter�s Identity Card(iv) Letter from a recognized Identity card(subject to the bank�s satisfaction)(vi) Letter form arecognized public authority or public servantverifying the identity and residence of the customerto the satisfaction of bank: (i) Telephone bill(ii) Bank account statement (iii) Letter from anyrecognized public authority (iv) Electricity bill(v) Ration Card (vi) Letter from employer (subject tosatisfaction of the bank) (any one document whichprovides customer information to the satisfaction ofthe bank will suffice).

(i) Certificate of incorporation and Memorandum &Articles of Association (ii) Resolution of the Board ofDirectors to open an account and identification ofthose who have authority to operate the account.(iii) Power of Attorney granted to its managers,officers or employees to transact business on itsbehalf (iv) Copy of PAN allotment letter (v) Copy ofthe telephone bill.

(i) Registration certificate, if registered(ii) Partnership deed (iii) Power of Attorney grantedto a partner or an employee of the firm to transactbusiness on its behalf (iv) Any officially validdocument identifying the partners and the personsholding the Power of Attorney and their addresses(v) Telephone bill in the name of firm/partners.

(i) Certificate of registration, if registered (ii)Power of Attorney granted to transact business onits behalf (iii) Any officially valid document toidentify the trustees, settlers, beneficiaries andthose holding power of attorney, founders/managers/directors and their address (iv) Resolutionof the managing body of the foundation/association(v) Telephone bill


CHAPATER 10

Joint Accounts-Method of operation

1 OPENING OFACCOUNT

2 STOP PAYMENTOF CHEQUE

3 PREMATUREPAYMENT OFFIXED DEPOSITRECEIPT(FDR)

4 CLOSING OFACCOUNT

5 MAKING /CANCELLATION/ CHANGE OFNOMINATION

6 ATTACHMENTORDER

7 DEATH OFEITHER

8 DEATH OFEITHER /FORMER

9 LOAN AGAINSTFDR

Sl.Particulars

Either Or Former Or Joint Account No. Survivor Survivor (Two Or More)

Both have to sign

Either can stop thepayment

Either can takeprematurepayment

Either can closethe account

Both have to signfor charge innomination

Either or survivoris a joint account.As such each ofthem is equallyliable

Survivor can claimthe amount


Either candischarge the FDRand take loan

Both have to sign

Former only cantake prematurepayment

Former only cantake prematurepayment

Only former has tosign to close theaccount

Both have to signfor change innomination

Former or survivoris a joint account.As such each ofthem is equallyliable

Survivor can claimthe payment afterthe death offormer


Only former camdischarge the FDRand take loan

Both/All have to sign

Anyone can stop thepayment

Both/All have todischarge the FDR forpremature payment

Both/All have to signto close the account

Both/All have to signfor change innomination

In case of jointaccount each of themare equally liable

Surviving person andlegal heirs ofdeceased

Legal heirs along withsurviving accountholder can claim thebalance

Both have todischarge the FDR fortaking loan


Sl.Particulars

Either Or Former Or Joint Account No. Survivor Survivor (Two Or More)

10 PAYMENT INCASE OF DEATHOF ONE A/cWHERENOMINATIONHAS BEEN MADE

11 GARNISHEEORDER

Payment will bemade to thesurvivor. Only onthe death of both,payment will bemade to thenominee

If order is in thejoint names it willbe applicable toEither or Survivoraccount and also inthe Individualaccounts butreverse is not true

Payment will bemade to thesurvivor. Only o thedeath of both,payment will bemade to thenominee

If order is in thejoin names fullamount will beapplicable. If it isthe formers againfull amount will beapplicable.However if it is inthe name ofsurvivor no amountis applicable

Payment will be madeto the survivors orsurvivor along withlegal heirs ofdeceased accountholder(s). Only on thedeath of both/all,payment will be madeto the nominee

If order is in the jointnames it will beapplicable to the jointaccount and also inthe individual accountbut reverse is nottrue.

Where right is available

DEPOSIT IN THE NAME OF LOAN IN THE NAME OF

Single person Jointly with others

Partner in a firm Partnership firm

Single name Same name

Proprietor Proprietorship firm

Joint-former / survivor Former

Where right not available

DEPOSIT IN THE NAME OF LOAN IN THE NAME OF

Joint account One of joint holders

Partnership firm One of the partners

Trust Trustee

Trustee Trust

Dividend A/c. of Company Loan A/c., of the Co.

Minor (under Guardianship) Guardian


CHAPTER 11

Right of Lien, Set off & Appropriation

SLPARTICULARS RIGHT OF SET-OFF APPROPRIATIONNO.

1. Legal statute

2. Meaning

3. Applicable on

4. Applied to

5. More than oneaccount of sameperson

6. Sole ProprietorAccount

7. Partners' Accounts(personal deposit)

8. Joint DepositAccounts

9. Trust Accounts

10. Future ContingentDebts

11. Quantum of Amount

12. Principal Amount &Interest

Universal customs andpractice amongst bankers

Rights of the Bank to club orconsolidate differentaccounts of same borrower

Amount of claim

Accounts in the same withsame rights

If prior agreement with thebank is to keep theaccounts separate, thenbank can't exercise thisright.

Deposit account of soleProprietor and its loan.Trading A/c can be clubbed

Partners are jointly andseverally liable and it givesthe implied authority to thebank to recover the loanamount from any of thepartners' personal accounts.

Bank can't exercise thisright on the joint depositaccount if the borrower isone of them

Not Applicable

Not applicable

Amount should be specificand final

Applicable to both

Indian Contract Act(Sections 59, 60 and 61)

Method of crediting amountdeposited by the customer toits outstanding loan in CC/Current(OD)

Amount of claim

Any of the loan accounts ofsame borrower

Applicable to the account asper directions of the borroweror implied intentions to whichaccount the amount to becredited.

Clayton's Rule is applicable.

Clayton's Rule is applicable

Applicable only to CurrentOverdraft & CC accounts andnot.

Applicable

Applicable

Amount should be specific

First interest and then principalamount (Kharavela Ind VsOrissa State Financial Corpn.-Orissa HC 1956)


SLPARTICULARS RIGHT OF SET-OFF APPROPRIATIONNO.

13. Bank's Discretionaryrights`

14. Requirement of legalnotice

15. Assignment of creditbalance to anotherbank

16. Against 2ndMortgage

17. Limitation

18. Garnishee Order

19. Death of thecustomer

At the discretion of theBank

Required except in case ofdeath, insolvency orreceipt of a garnisheeorder

Bank cannot exercise thisright if it has beeninformed of suchassignment by borrower

Allowed

No Limitation

Bank should exercise thisright for adjusting its ownsdebts before complyingwith the garnishee order

Bank has automatic andimplied right

Bank's discretion only if theborrower has not specified towhich account the amountshould be credited.

Not applicable.

Bank cannot exercise this right.

Not Applicable

No Limitation

To be obeyed

Applicable

PARTICULARS GARNISHEE ORDER ATTACHMENT ORDER

Concept

Issuing Authority

Garnishee Order is issuedby the court on theapplicable made by thejudgement creditor in asituation where thejudgement debtor fuses topay debt payable by him.The garnishee order isissued on the bankermaintaining account of thejudgement debtor.

Competent Court at therequest of judgementcreditor

Attachment Orders are issued by theAssessing Officer or Tax RecoveryOfficer on the Bank having any typeof deposit in the assessee from whommoney is due or may become due.

Government authorities such asIncome Tax, Sales Tax, CustomAuthorities etc. for collection of taxand government dues.

CHAPTER 12

Garnishee Order & Attachment Order


Legal Provision

Stages / Steps

Nature of liability

Nature of recovery

Depositor

Bank

Amount

Applicable towhich amount

Nature of dues

Limitation period

Deposits

Right of Set-off andAppropriation

Joint accounts,order received insingle name

Joint account &order in same jointnames

Order in the nameof partner, trusts,official assignee /executor receiver,administrator &liquidator etc.

Civil Procedure Code, Sec60, Order XXI, Rule 46

First, Order Nisi and thenOrder Absolute

Private liability

Recovery of private dues.

Judgement debtor

Judgement debtor's debtor

May be mentionedspecifically

On clear balance available inthe account at the time ofreceipt

Execution of decree

12 years

Demand deposits and timedeposits

Available for certain and duedebts

Not applicable

Applicable up to the orderamount

Not applicable for accountsin the name of firm as tosettle the liability of thepartners, firm accountcannot be debits. In case ofother accounts it is notapplicable as they are in therepresentative capacity.

Related status such as Income TaxAct, Sales Tax Act, Wealth Tax Act,Enforcement Directories etc.,

Always in the Absolute form.

Statutory liability.

Recovery of dues of Income Tax /Govt. dues

Assessee in default

Assessee debtor

Must be mentioned specially

Applicable on subsequent balance upto the time total amount is notrecovered.

Government liability

30 years

Demand deposits and timedeposits

Available for ascertainable and duedebts

Equal share depending upon thenumber of account holders

Applicable up to the order amount

Not applicable for accounts in thename of firm. To settle the liability ofthe partners, firm amount cannot bedebited. In case of other accounts, itis not applicable as they are in therepresentative capacity.




Deceased

Insolvent

Unutilised portionof limit against FDR

FDR as collateralsecurity

Bank's liability tohonour thecustomer's cheques

Preference

Applicable as the liabilityhas been predetermined bythe court and executionproceeding cannot bestopped after the death.

Not applicable, as afterinsolvency, the recovery isto be done by the officialAssignee / Receiver in thepreferential order

Balance Amount of FDR

Not applicable

Over and above the orderamount

Attachment order, being theliability to govt., will havethe preference overGarnishee Order if bothreceived simultaneously.

Applicable as the liability has beenpre-determined by the statutoryauthority and recovery cannot bestopped after the death.

Not applicable. The amount has beensanctioned to do the productiveactivity and not to settle any statutoryliability.

Balance Amount of FDR

Not applicable

Over and above the order amount

Attachment order, being the liability toGovt., will have the preference overGarnishee Order if both are receivedsimultaneously.

TYPE OF CHARGE TYPE OF SECURITY COLLATERAL SECURITY

Mortgage

Pledge

Hypothecation

Lien

Assignment

Immovable securities

Moveable assets

Moveable assets

Securities which are alreadyin possession of the creditor.

Actionable claims

Land, building, machinery embeddedto the earth.

Stocks, Gold, jewellery

Stocks, motor vehicles, standingcrops.

Goods and securities exceptactionable claims and money.

LIC policies, book debts, FDR.

CHAPTER 13

Charges on Security


CHAPTER 14

Various types of Mortgage (Sec 58 of TPA)

SL. EQUITABLE SIMPLECONDITIONAL USUFRUC

ENGLISHPARTICULARS SALE TUROYNO. MORTGAGE MORTGAGE MORTGAGE MORTGAGE MORTGAGE

1 OTHER NAMES

2 U/S OF TPA

3 ALLOWEDCITIES

4 MINIMUM AMTOF LOAN

5 METHOD OFCREATION

6 WITNESSESREQUIRED

7 PURPOSE

8 MORTGAGOR

9 REGISTRATION

By deposit ofTitle Deeds

58(f)

In Bombay,Calcutta &Madras or incitiespermittedused Actpassed byState Govt.

No Limit

By Depositof Title Deed

No

Securitydebt orperform--ance ofobligation

OnlyBorrower/Guarantor

Not required

SimpleMortgage

58(B)

All overIndia

Rs 100/-

By WritingofMortgageDeed

Two

Securitydebt orperform-ance ofobligation


Notrequired

Nil

58(c)

All over India

Rs 100/-

By Writing ofMortgageDeed

Two

Security debtorperformanceof obligation


Required

Nil

58(d)

All overIndia

Rs 100/-


Two

Securitydebt orperformanceofobligation


Required

Nil

58(e)

Bombay,Calcutta &Madrasand placesnotifiedunder Actpassed byStateGovts.

Rs 100/-


Two

Securitydebt orperform--ance ofobligation


Required


SL. EQUITABLE SIMPLECONDITIONAL USUFRUC

ENGLISHPARTICULARS SALE TUROYNO. MORTGAGE MORTGAGE MORTGAGE MORTGAGE MORTGAGE

10 POSSESSIONANDOWNERSHIP

11 RIGHTS ONINCOME OFPROPERTY

12 RIGHT OFFORECLOSURE

13 RIGHT OFREDEMPTION

14 LEGAL NOTICE

15 LIMITATION

NotTransferred

WithMortgagor

No Right

Yes, availableto mortgagor

Required

12 years

NotTransferred

WithMortgagor

No Right

Yes,available tomortgagor

Required

12 years

Nottransferred butproperty issold on acondition to beretransferred ifdebt is paidback

WithMortgagor

Mortgage cansue on default

Yes, availableto mortgagor

Required

12 years

Transferredtillrepaymentof debt

WithMortgagor

No Right

Yes,available tomortgagor

Required

12 years

Title isTransfer--able butnot theposses--sion

WithMortgagor

No Right

Yes, butnotownership

Required

12 years

CHAPTER 15

Various types of Securities & their charge

Sl. Type of Type Of Mode Of Registration Of PosssessionNo. Security Charge Valuation Charge The Security

1 Land &Building

2 Plant &Machinery

Equitable Mortgageii) RegisteredMortgage

Hypothecation

Bank�sApprovedValuer

Originalinvoice anddepreciatedvalue

Possible only whenthe property is'Free Hold'. Non-encumbrancecertificate, searchreports and priorsale deeds shouldbe gone throughproperly.

In case ofcompanies, chargeshould be gotregistered with the

Title Deedsremain withthe Bank

The physicalpossessionremains withthe



3 Stocks

4 Railway/LorryReceipts, Air-way Bill AndBill Of Lading

5 LIC Policies

6 NSC, IndiraVikas PatraOther Govt.Securities

7 Bank�s OwnTermDeposits

i) Hypothecationii) Pledge

Pledge of Receiptsof Bills in full set ofissue

Assignment ofReceipts

Pledge & Security

Pledge & Security

MarketReport,Newspapers,Invoices.-do-

Invoice

Surrendervaluecertificateissued by thecompany

Face Valueplus Interestaccruedthereon

Face Valueplus interestaccrued

Registrar ofCompanies.

By way ofobtaininginventories andstock reports atregular intervals-do-

By way of deliveryand a validendorsement.Though no legallyrequired, butRailway orTransportauthorities shouldbe notified.

By way ofassignment infavour of the Bank

Blank endorsementor transferassignment infavour of the bank

By way ofAssignment

borrowers,bank hasconstructivepossession

Physicalpossessionremains withthe borrowerand bank hasan equitablechargephysicalpossessionremains withbank in anindependentlyaccessiblestore.

Documentsof titleremain withthe bank

OriginalPoliciesremains withthe bank

OriginalSecuritiesremain withthe Bank

Originaldepositreceiptremains withthe bank



8 Ornaments

9 UTI, SharesOf ApprovedCo�s

10 Book Debts

11 Supply Bills

Pledge

Pledge

Hypothecation

Hypothecation

Newspapers,weightcertificatefromapprovedjeweler

Newspapers,SEBIapprovedagents andbrokers.

Books of theparty,certificatefrom a Act

Certificateissued by theGovt.undertakinginvoices, copyof contractand deliverynote.

Delivery /possession

Letter of Pledge,Blank TransferDeeds /Dematerialization

Hypothecationdeed andassignment letter

A letter ofinstruction to thePSU for making thepayment to thebank

Jewellery iskept in safecustody withthe bank.

Certificatesremain withthe bank

N.A.

N.A

CHAPTER 16

Hypothecation & Charge

SLPARTICULARS HYPOTHECATION PLEDGENO.

1 Legal Provision

2 Definition

Section 2(n) of Securitization &Reconstruction of FinancialAssets & Enforcement ofSecurity Interest Act, 2002

A charge in or upon anymovable property, existing orfuture, created by a borrowerin favour of a secured creditorwithout delivery of possessionof the movable property tosuch creditor, as a security forfinancial assistance and

Section 172 of The IndianContract Act, 1872

The bailment of goods assecurity for payment of a debtor performance of a promise.


SLPARTICULARS HYPOTHECATION PLEDGENO.

3 Parties

4 Nature ofSecurities

5 Nature ofCharge

6 Rights ofOwnership

7 Rights of Sale

8 Possession

9 Delivery of Goods

10 Limitation period

11 General lien

12 Degree of care

includes floating charge andcrystalisation of such chargeinto fixed charge on movableproperty.

· Borrower-Hypothecator· Bank-Hypothecatee

Movable

· Equitable· Floating

With the borrower

Through Court of Law

With Borrower

· Actual· Symbolic· Constructive

3 years

Not Available

Borrower to take care of theHypothecated goods

· Borrower-Pledgor / Pawnor.· Bank-Pledgee/Pawnee

Moveable

· Legal· Fixed

With the borrower

Private Sale- after givingreasonable notice (Sec-176-contract Act)

With Bank

Not applicable

No Limited Period

Available

The bank is bound to take asmuch care of the goods bailedto the bank as a man ofordinary prudence would, undersimilar circumstances, take ofhis own goods of the samebulk, quantity and value as thegoods bailed.


CHAPTER 17

Various types of Charge on Securities

SL. PARTI-LIEN

ASSIGN- HYPOTHE-PLEDGE MORTGAGENO. CULARS MENT CATION

1 Meaning

2 LegalStatute

3 Applications

4 Differenttypes ofAssetscovered

5 Possession

6 Rights ofBank to Sell

Right toretain theamount tilladjustmentof the debt.U/s 171 ofContract Act

IndianContract Act

On goodsandsecurities

Goods andsecurities

With theBank

Bank cannotsell but onlyretain

Transfer ofrights,interests,or title infavour ofthecreditor.U/s 3

Transfer ofPropertyAct

Title deeds,instruments,policies

SupplyBills, LICPolicies,BookDebts, FDR

With theBank

Can claimamountfrom theissuers

Not defined inany legalstatute. It isextendedconcept ofpledge. It is acharge onmoveablesecurities withdebtor havingthe possessionof the same

Nil

Movablegoods

Stocks,Vehicles, Plant& Machinery,Standing crops

With theBorrower

Can convertthehypothecationinto pledge

Bailmentof goodsas securityforpaymentof debtandinterest.U/s 172 ofContractAct

IndianContractAct

Movablegoods

Shares,KVP, NSC,Materialsor othergoods notembeddedto theearth

With theBank

Can sellaftergiving anotice

Transfer ofinterest in someimmovableproperty forsecuringexisting or afuture debt(Sec-158 ofTransfer ofProperty Act)

Transfer ofProperty Act

Immovableproperty

Land, Building,Machineryembedded tothe earth

With the Debtor

Can sell


CHAPTER-18

Safe Deposit Articles & Lockers

SL PARTICULARS SAFE DEPOSIT LOCKERSNO. OF ARTICLES

1 Banker -CustomerRelationship

2 Leasing out thespace

3 Operation

4 Third Parties

5 Nomination

6 Acceptance ofArticles

7 Type ofPackaging

8 Particulars of theDepositors

Bank is a Bailee and theCustomer is a Bailor.

No space is leased out to thecustomer

There is no involvement of thecustomer with the operation ofthe vault where the valuableshave been kept by the bank

In case the depositor is verywell know and is of very goodreputation, the bank candeliver the articles to anauthorized third person afterproper verification of hisidentify

Nomination is allowed to oneperson

The customer delivers thevaluables/articles to the bankfor keeping in safe custody

Bank accepts sealed packets orenvelops duly signed by thecustomer

The packets has a mention offull particular of the depositor

The Bank is a lessor and thecustomer is a lessee.

A small locker in the lockerscabinet is leased out to thecustomer.

The locker is operated jointlyby the bank and the customerby using master key and hirerskey simultaneously

Lockers could be hired in thenames of joint persons andcould be authorized to beoperated by the persons byPower of Attorney with priorarrangements with the bank. Ifthere is no such priorarrangement, third parties arenot allowed to operate thelockers

In case locker has been hiredby a single person, 'nominationis permitted in favour of oneperson only. However, if thelocker is hired jointly - jointoperations, each person cannominate one (but not morethan two)

The customer itself keeps thearticles in the locker.Bank is not concerned with thepacking of the articles

The bank is not concerned withthe packing of the articles

Locker cabinets are immovablein the strong room. The bank canonly see whether the lockershave been property locked afterthe customer has completed theoperation or not.


SL PARTICULARS SAFE DEPOSIT LOCKERSNO. OF ARTICLES

The bank charges periodical rentas per size of the locker

The customer operates thelocker itself and may take outany article as per need.

Contents of the lockers could bedelivered only to the legal heirsafter recovery of rent, if any,and completion of all theformalities.

If no legal heirs turn up, bankcan issue a notice at theaddress of the deceased andissue a Public Notice in the newspapers. A period of 3 years issufficient to wait and thereafter,the bank can break-open thelocker. The articles so recoveredwould be properly recorded andkept in safe custody.

9 Duty of the Bank

10 Charges

11 Delivery ofarticles

12 Death of theDepositor

The bank is expected to takeproper and extra care regardingsafely of the articles depositedby the customer

The bank takes chargesaccording to the size of thearticles

The customer can take thedelivery of the goods onsurrender of safe custodyreceipt

In the event of death of thedepositor, in case, if on someenvelop, if has been mentionedthat it contains a 'Will' and thename of person to whom it is tobe delivered; the bank candeliver the same onidentification of the person.Articles can be delivered to thenominee, if any.Succession Certificate is notvalid in respect of Safe Depositof Articles of a deceased.Only Probate of the 'Will' orLetter of Administration isrequired for delivery of thearticles

CHAPTER 19

Important sections of Banker�s Book of Evidence Act 1891

S 4 A Certified copy is a prima facie evidence of the entry in the records of the bank.

S 6 The Court may order inspection of any banker�s books in a proceeding before it. Furtherit may also order taking out copies of the banker�s books.

S 8 The order of a court for production and inspection of books of the bank shall be construedas referring to an order made by an officer of the rank of Superintendent of Police andabove as specified by the Govt.


CHAPTER 20

Important sections of Indian Contract Act-1872:

SECTION CONTENTS

11 Minor cannot enter into a contract.

25 An agreement without consideration is void.

25(3) A promise to pay a time-barred debt is valid.

28 An agreement curtailing the normal limitation period for filling a civil suit is void.

42 In a joint promise, all the promisors are liable both jointly and severally.

43 Any or more joint promisor may be compelled to perform whole of the promise.

59-61 Appropriation of payment (Clayton�s Rule).

68 Loans to minors to meet necessaries of life are binding on the minor�s estate: Quasi-contracts.

72 Payment made by mistake or under coercion must be returned.

124 Definition of Indemnity.

126 Definition of Guarantee.

128 Surety�s liability is co-extensive with that of the principal debtor, unless providedotherwise.

129 Continuing guarantee extends to a series of transactions.

131 Death of a surety revokes the continuing guarantee for future transactions.

133 Any change in the contract, without surety�s consent, discharges the surety.

134 Surety is not liable if principal debtor is released from liability, by any act or omissionof the creditor.

152 Bailee is not liable for loss, destruction / deterioration of things bailed, if he hasexercised the standard of care as defined in S 151.

170 Bailee has particular lien over the things bailed to him.

173 Pledgee can retain the goods till he receives his payment.

182 Agent and Principal defined.

BAILMENT

148 Bailment defined.

151 Bailee to take reasonable care of goods bailed to him.

171 Bankers, factors etc have a general lien.

172 Pledge defined

176 Statutory notice of sale to be given to the Pledgor before sale of good when hedefaults to pay.

AGENCY

185 No consideration required for Agency.

190 An agent cannot delegate his authority.

201 Death / Insolvency / Insanity of the debtor terminate Agency.

202 Agency coupled with interest � agency not terminated by death.


CHAPTER 22

SECTION DEALING WITH NOMINATION

Particulars Acceptance of nomination Pay / deliver only the nominee

Deposits Section 45ZA Section 45ZB

Safe Custody Section 45ZC Section 45ZD

Lockers Section 45ZD Section 45ZF

(Nomination provision available as under)

Types of A/c Nature of A/c Nominee

Deposits Single / Joint One only

Safe Custody Only single One only

Lockers Single One only

Joint-E/S One only

Joint-E/S One only

Joint operation Each can nominate one(but not more than two)

Types of nomination forms

Account Registration Cancellation Variation

Deposit DA-1 DA-2 DA-3

Safe Custody SC-1 SC-2 SC-3

Lockers SL-1 or SL 1A joint SL-2 SL-3 or SL 3A joint

NRI Accounts: The nomination facility is available in both resident as well as non-residentaccounts.

Nature of A/c Status of Nominee Provision of settlement in favour of nominee

Resident Non-Resident Repatriation of fund to non-resident nominee ascredit to NRE/FCNR account of nominee requiresprior RBI approval.

Non-Resident Resident Repatriation of fund outside India requires RBIpermission, irrespective of the accountmaintained by NRI. For credit to residentnominee, no RBI approval is required.

Non-Resident Non-Resident Repatriation of fund requires RBI permission, bututilization in India requires no approval.


CHAPTER 23

Limitation Act, 1963

Article 1 For the balance due on amutual, open and Current A/c, wherethere have been reciprocal demandsbetween the parties.

Article 19 For money payable formoney lent.

Article 22 For money deposited underan agreement that it shall be payableon demand, including money of acustomer in the hands of his banker sopayable.

Article 31 On a bill of exchange orpromissory-note payable at a fixed timeafter date.

Article 32 On a bill of exchange payableat sight, or after sight but not at fixedtime.

Article 33 On a bill of exchangeaccepted payable at a particular place

Article 34 On a bill of exchange orpromissory note payable at a fixed timeafter sight or after demand.

Article 35 On a bill of exchange orpromissory note payable on demand andnot accompanied by any writingrestraining or postponing the right tosue.

Article 36 On a promissory note orbond payable by installments.

Article 37 On a promissory note, bondpayable by instalments which providesthat if default be made in payment ofone or more instalments, the whole shallbe due.

DESCRIPTION Period of TIME FROM WHICH PERIOD OF SUIT Limitation BEGINS TO RUN

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

The close of the year in which the lastitem admitted or proved is entered inthe a/c; such year to be computed asin the a/c.

When the loan is made

When the demand is made

When the bill or note falls due

When the bill is presented

When the bill is presented at thatplace

When the fixed time expires

The date of the bill or note

The expiration of the first term ofpayment as to the part then payableand for the other parts the expirationof the respective terms of payment.

When the default is made unlesswhere the payee or beneficiarywaives the benefit of the provisionand when fresh default is made inrespect of which there is no suchwaiver.



Article 39 On a dishonoured foreign billwhere protest has been made and noticeis given.

Article 54 For specific performance of acontract

Article 61 By a mortgagor(a) To redeem or recover possession of

immovable property mortgaged(b) To recover possession of immovable

property mortgaged and afterwardstransferred by the mortgage for avaluable consideration

Article 63 By a Mortgageea) For foreclosureb) For possession of immovable

property mortgaged

Article 116 Under the Code of CivilProcedure 1908a) To a High Court from any decree or

orderb) To any other court from any decree

or order

Article 117 For a decree or order of anyHigh Court to the same Court

Article 118 For leave to appear anddefend a suit under summary procedure.

Article 119 Under the Arbitration Act,1940a) For the filling in Court of an award;b) For setting aside an award or getting

an award remitted for reconsideration

Article 120 Under the Code of CivilProcedure 1908 to have the legalrepresentation of a deceased plaintiff orappellant or of a deceased defendant orrespondent, made a party.

3 years

3 years

30 years

12 years

30 years

12 years

90 days

30 days

30 days

10 days

30 days

30 days

90 days

When the notice is given

The date fixed for the performance, orif no such date is fixed when the plaintiffhas notice that performance is refused.

When the right to redeem of torecover possession accruesWhen the transfer becomes known tothe plaintiff

When the money secured by themortgagee becomes due.When the transfer becomes entitled topossession.

The date of the decree or order

The date of the decree or order.

The date of the decree or order

When the summons is served

The date of service of the notice ofthe making of the awardThe date of service of the notice ofthe filling of the award.

The date of death of the plaintiff,appellant defendant or respondent, asthe case may be.



Article 127 To set aside a sale inexecution of a decree including any suchapplication by a judgment-debtor

Article 137 Any other application forwhich no period of limitation is providedelsewhere in this connection.

60 days

3 years

The date of the sale

When the right to apply accrues

CHAPTER 24

LIMITATION ACT IMPORTANT SECTIONS

Sec 3 Courts cannot condone the delay in filing the suits due to expiry of limitation

Sec 4 When there happens to be a court holiday on the day, the limitation is expiring,then suit can be filed on the next working day of the court but limitation is notextended.

Sec 5 Courts can condone the delay in preferring appeals

Sec 9 Where once the time has begun to run, no subsequent disability or inability toinstitute a suit or make an application stops it. This rule is strictly applied.However, there are some exceptions allowed vide

Sec 12 In computing the period of limitation for an appeal or application, the timetaken for obtaining a copy of the judgement/order shall be excluded

Sec 14 In computing the period of limitation, the time, and diligence and in good faith,another civil proceeding against the same party for the same relief shall beexcluded

Sec 15(1) If an institution of a suit or application has been stayed by injunction or order,the period of the continuance of the injunction or order will not be reckoned forthe purpose of limitation

Sec 15(2) When notice has been given or sanction requested from the Govt. before theinstitution of a suit in accordance with law, limitation will be suspended duringthe period of notice

Sec 15(5) In computing the period of limitation for any suit, time during which the defendanthas been absent from India shall be excluded

Sec 17 In case of fraud or mistake, the period of limitation will not begin to run untilthe plaintiff or applicant has discovered the fraud or mistake, or could withreasonable diligence, have discovered it

Sec. 12 to 15. Wherein running of time is suspended


Sl. ActionNo.

1 Time to be allowed to the borrower/guarantor in demand notice to repay thedues

2 Time within which the borrower cansubmit representation/objection to theabove notice

3 Time within which the Bank has to conveyits decision against the aboverepresentation/objection

4 Time within which Borrower can file apetition in the DRT against Bank for havingtaken possession of property

5 Maximum time within which DRT has topass the order for the above

6 Time within which the Bank/Borrower canfile appeal with the Appellate Tribunalagainst the order of the DRT

7 Minimum Time Bank has to permit for theborrower to repay the debt, while issuingthe sale Notice

CHAPTER 25

SARFAESI ACT-TIME FRAME TO BE OBSERVED

Time Limit

60 days from the date of notice


7 days from the date of receipt of therepresentation/objection

Within 45 days from the date of action ofthe Bank

Within 4 months from the date of applicationin the DRT

Within 45 days from the date of receipt ofthe order of the DRT


n