Syllabus - Banking Law August

SUBJECT: LAW OF BANKING
Faculty Dr. Y. Papa Rao & Ms. Year/Semester 4and 5/ VII & IX
Navita Aggarwal semester
Course Banking Law Period August to

Name December
No of 30+30 Session Duration 50 Minutes
Classes
 INTRODUCTION:
The whole world runs for or after money and the Banking Industry procures it to
people, may be, for running household or company or for a simple car for a
salaried employee. The banking industry handles finances in a country including
cash and credit. Banks are the institutional bodies that accept deposits and grant
credit to the entities and play a major role in maintaining the economic stature
of a country. From the period of nationalisation of Banks to liberalisation and
further demonetisation of currency, the Industry has seen major changes in
system over the years with the advancement in technology and needs of the
people. Furthermore, E Banking, Foreign Banks, listing of Banks in Stock market,
merger of Banks, Capitalisation of Banks have made Banking an interesting and
necessary area to study.
In this carved framework, the course is designed to

 Discuss the conceptual background of Banking Industry starting from
advent of money
 Elaborate the development of this Industry in different shapes of accounts
and credits with its features
 Ascertain the laws applicable to the said Industry
 Ascertain new emerging dimensions in banking system including e-
commerce, e-banking, Mobile Banking, and cross selling business
 Demarcate the nature of Foreign Banking and new currency in form of
cryptocurrency
 OBJECTIVES OF THE COURSE:
This course is an attempt towards imparting knowledge of various aspects of

Banking regime and upon successful completion of course a student will be able
to:
 Handle legal aspects of Banking vis- a vis a customer
 Deal with operational part of Banking Law as a lawyer
 Grip the interdisciplinary reading of Banking Law with Law of contract,

Transfer of Property Act, Family Law and other substantive Laws
 Appreciate the importance of Banking in Macroeconomy of a country
 Recognise the issues with which the Industry is crippled
 DIDACTICS
This subject requires teaching to be a combination of theory with practice. So,

the teaching should direct the attention from evolution to current position of this
Industry. The methodology demands a step by step guide as to how Banking
forms a part of macroeconomy of country, what is the meaning of certain terms
like CRR, SLR, consortium lending, either or survivor clause in an account and
how this all should be of interest for a law student. In this endeavour teaching
will be by discussion of provisions relating to the said law which directly or
substantively govern Banks along with interdisciplinary study of other laws with
illustrations. A brief scheme of the Banking operations is provided herewith for
the students to make them understand as to what all they will learn with this
study.
Since, the sessions are in offline mode, the enrolled students will be encouraged
to participate in classes via minor assignments in form of quiz, MCQs or
addressing an issue based on facts. Simultaneously, focus will be directed to the
practical aspects of Banking Law and varieties of situations which arise before a
lawyer when the law is applied on facts of the case.
 EVALUATION
S. No. Assessment Task Percentage of Final Grade

a. Small Assignments in form of MCQ, 25%
one-word answer, Fill out Gaps, short
problem, short essay
b. Mid-Term Examination 25%
c. End Term Examination 50%
 COURSE MODULE
 MODULE [I]: Indian Banking System {12 CLASSES}
a. Advent of Currency and Banking system: Nationalisation of Banks and

afterwards
b. Reserve Bank of India as a Guardian of Indian Banking System:

History of RBI Act and relation of Banks vis- a – vis RBI
c. Structure and function of Banking Institutions—The different types of

Banks viz. Central Bank, Commercial Bank, Co-operative Banks,
Specialized Banks, Regional Rural Banks (RRBs), NABARD, Financial
Institutions and their respective functions – An Overview
MODULE [II]: BANK & CUSTOMER {10 CLASSES}
a. Different Types of Accounts: Legal character of Banker – Customer

relationship
b. Personal Banking and Corporate Banking: How law directs the relationship
c. Banking Ombudsman and RTI
d. Laws Governing recovery process in Banks- IBC, SARFAESI, RDDBFI &

civil courts
e. Recent cases of Frauds in Banking Industry and laws applicable
Module [III] TRENDS OF BANKING BUSINESS: {8 CLASSES}
a. Bank Guarantees and letter of credit with UCPDC Guidelines
b. Banking and Technology
c. Foreign Banking in India
MODULE [IV] THE NEGOTIABLE INSTRUMENT ACT, 1881 {15 CLASSES}
Legal aspects of Negotiable Instrument in general and special features of the

following instruments in particular:
a. Promissory Note, Bill of Exchange, Cheque, Drawer, Drawee, Payee,
Holder, Holder in due course, Inland Instrument, Foreign Instrument,
negotiable Instrument, Negotiation, Indorsement, inchoate stamped
Instruments.
b. Crossing of Cheques-- Criminal liability on dishonor of Cheque (Section
138 – 142) the law relating to payment of customers cheque-- rights and
duties of paying banker and a collecting banker.
MODULE [V] BANKING REGULATION ACT, 1949 {8 CLASSES}
a. Control over Management.

b. Prohibition of certain activities in relation to Banking Companies.
c. Acquisition of the undertakings of Banking Companies.
d. Suspension of Business and winding up of Banking Companies.
e. Special provisions for speedy disposal of winding up proceedings.
f. Powers of the Central Government towards Banking Companies.
MODULE [VI] CONTROL OF BANKS IN INDIA {7 CLASSES}
The role of banking institutions in the socio-economic development of the

country- Advanced to priority sector and Credit Guarantee Scheme.
a. Social Control of Banks.
b. Priority lending.
c. Promotion of underprivileged classes, Development work and
participation in national economy. [Narshimam Committee
Recommendations]
RFERENCES: -
 K. Subrahmanyan, Banking Reforms in India (1997) Tata Maigraw Hill, New

Delhi.
 M.A. Mir, The Law Relating to Bank Guarantee in India (1992), Metropolitan
Book, New Delhi.
 Mitra, The Law Relating to Bankers’ Letters of Credit and Allied Laws (1998)
University Book Agency, Allahabad.
 Narasimham Committee report on the Financial System (1991) – Second
Report (1999)
 Principles of Banking Law (Third Edition) [ROSS CRANSTON, QC, MP,
Centennial Professor of Law, LSE]
 R.K. Talwar, Report of Working Group on Customer Service in Banks
 R.S. Narayana, The Recovery of Debts due to Banks and Financial Institutions
Act, 1993(51 of 1993), Asia Law House, Hyderabad.
 Subodh Markandeya and Chitra Markandeye, Law Relating to Foreign Trade
in India: Being a Commentary on the Foreign Trade, (Development and
Regulation) Act 1992, Universal Law Publishing Co. Pvt. Ltd. Delhi.
 V. Conti and Hamaui (eds.), Financial Markets’ Liberalization and the Role of
Banks’, CambridgeUniversity Press, Cambridge, (1993)
 R.K. Gupta: BANKING Law and Practice (2012) in 3 Vols. Modern Law
Publications.
 Prof. Clifford Gomez: Banking and Finance - Theory, Law and Practice (2011)
PHI Learning Private Limited
 J.M. Holden: The Law and Practice of Banking (1998) Universal Law
Publishing.
 S R Myneni, Law of Banking, (2017, 3rd edition) Asia Law House, Hyderabad.
 M.L. Tannan, Tannan’s Banking Law and Practice in India (Eighth Edition-
2015), India Law House, New Delhi,2 volumes
 Ellinger's Modern Banking Law (2011)(Fifth Edition) [E. P. ELLINGER,
Professor of Law, National University of Singapore, EVA LOMNICKA, Professor
of Law,King's College, London and a practising barrister, and RICHARD
HOOLEY, Professor of Law, King's College London and Fellow of Fitzwilliam
College, Cambridge].
LEGISLATIONS:
 Banking Regulation Act 1949

 Reserve Bank of India Act 1934
 Recovery of Debts due to Banks and other Financial Institutions 1993
 Securitization asset Recon construction and Enforcement of Security
Intere3st 2002
 Insolvency and Bankruptcy Code 2016
 Foreign Exchange Management Act 1999
 Indian Contract Act and other substantive laws
Cases: -
 Asian resurfacing of Road agency Pvt Ltd vs Central bureau of
Investigation (2018)
 UCO Bank vs Deepak Debbarama (2016)
 Sampelly Satyanarayana Rao vs Indian Renewable Energy Development
Agency (2016)
 Manu Mathew vs Catholic Syrian Bank Ltd (2017)
 Shyampati Devi v. Nandlal Prasad And Others (2008)
 State Bank of India vs United Breweries Holdings Limited (2017)
 State Bank of Hyderabad vs Rabo Bank (2015)
 Iris Computers Ltd. v. State Bank of India (2019)

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SUBJECT: LAW OF BANKING

Course Banking Law Period August to

In this carved framework, the course is designed to

 OBJECTIVES OF THE COURSE:

This course is an attempt towards imparting knowledge of various aspects of

 Handle legal aspects of Banking vis- a vis a customer

 Deal with operational part of Banking Law as a lawyer

 Grip the interdisciplinary reading of Banking Law with Law of contract,

 Recognise the issues with which the Industry is crippled

This subject requires teaching to be a combination of theory with practice. So,

S. No. Assessment Task Percentage of Final Grade

 MODULE [I]: Indian Banking System {12 CLASSES}

a. Advent of Currency and Banking system: Nationalisation of Banks and

b. Reserve Bank of India as a Guardian of Indian Banking System:

c. Structure and function of Banking Institutions—The different types of

MODULE [II]: BANK & CUSTOMER {10 CLASSES}

a. Different Types of Accounts: Legal character of Banker – Customer

c. Banking Ombudsman and RTI

d. Laws Governing recovery process in Banks- IBC, SARFAESI, RDDBFI &

e. Recent cases of Frauds in Banking Industry and laws applicable

Module [III] TRENDS OF BANKING BUSINESS: {8 CLASSES}

a. Bank Guarantees and letter of credit with UCPDC Guidelines

b. Banking and Technology

c. Foreign Banking in India

MODULE [IV] THE NEGOTIABLE INSTRUMENT ACT, 1881 {15 CLASSES}

Legal aspects of Negotiable Instrument in general and special features of the

MODULE [V] BANKING REGULATION ACT, 1949 {8 CLASSES}

a. Control over Management.

The role of banking institutions in the socio-economic development of the

 K. Subrahmanyan, Banking Reforms in India (1997) Tata Maigraw Hill, New

 Banking Regulation Act 1949

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