RBI Act Most Important Sections PDF

SEC-2 (e) SCHEDULED BANK: As per this section, a Scheduled bank means a bank whose name is included in the 2nd schedule of RBI Act 1934. The essential condition of capital is that, such banks have paid-up capital and reserves of not less than Rs. 5 lac. Bank which are not included in the 2nd Schedule of RBI are called Non-scheduled Bank.

SEC. 17 TYPES OF BUSINESS: Defines various types of business which RBI may transact, which include acceptance of deposit without interest from Central / State govt. purchase sale of forex, securities, rediscounting the bills, P/N, grant loans etc.

SEC. 21 – RIGHT TO TRANSACT GOVT. BUSINESS: RBI to transact Govt. business in India is. Remittance, exchange, keeping deposit free of interest etc.

SEC. 22. BANK NOTES: Sole right to issue bank notes

SEC. 23 ISSUE DEPARTMENT Bank rotes shall be issued by Issue Dept. against security of gold coins, bullion, rupee coins, foreign securities & other approved securities up to Rs. 200 cr.

SEC. 24 DENOMINATION OF NOTES RBI issues all currency notes for denomination of 2, 5,10,20,50,100, 200, 500,1000,2000, 5000,10000

SEC 28 – RULES FOR REFUNDING VALUE: RBI can frame rules for refunding value of mutilated, soiled or imperfect notes as a matter of grate.

SEC 29 – Bank Notes Exempted from Stamp Duty under Indian Stamp Act

SEC 31 – PROHIBITS ISSUE OF BEARER B/E, P/N PAYABLE TO BEARER: no person in India other than RBI or the Central Govt. is authorized to draw, accept make or issue any bill of exchange, hundi, Promissory note, drafts payable to bearer.

SEC 33 ASSETS OF THE ISSUE DEPARTMENT: The assets of issue deptt. consists of gold coins, gold bullion, foreign securities etc. The aggregate value of gold coins, gold bullion, and foreign securities held as assets and the aggregate value of the gold coins, and gold bullion shall not at any time be less than Rs 200 cr. and Rs 115 cr. respectively

SEC 42(1) – CASH RESERVE RATIO (CRR): Consequent to GOl’s notification of Sec. of RBI (Amendment) Act 2006 minimum statutory floor and ceiling limit no longer exists. Further, no interest will be payable on CRR balances w.e.f. fortnight beginning 31 March 2007.

CRR is maintained on fortnightly basis: Saturday to following Friday 14 days.

SEC.45-A-F COLLECTING & FURNISHING OF CREDIT INFORMATION:

Borrower enjoying secured credit limits of Rs. 10 lac and above unsecured limits of Rs. 5 lac & above: Return as on last Friday of April and Oct. every year. (Half yearly).

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

Basic Statistical Return (BSR): BSR-1 regarding borrower a/cs of above Rs. 2 lac. BSR-Il containing information about deposits with break-up into current, savings & term deposits.

SEC. 45-H-T: Regulations relating NBFC

SEC 49 – PUBLICATION (DECLARATION OF BANK RATE)

RBI shall make public from time to time the standard rate at which it is prepared to buy or re-discount B/E or other commercial paper eligible for purchase under this Act.