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Exam Guides — Banking Law

25 detailed 16-mark model answers across 5 units. Each answer includes Summary, Mind Map, Key Points, Provisions/Cases, Last-Minute Revision, 5-Min Answer, and Full Answer tabs — structured and ready for KSLU exams.

25Model
Answers
5Units
Covered
8Tabs per
Question
16Marks
Each
U1
Introduction to Banking Law
Banking regulation, RBI functions, banker-customer relationship, KYC & AML
Open Unit 1 →
Question 1
Origin, Growth & Development of Banking in India
16 marksMost Asked
Presidency Banks → Imperial Bank → SBI | Nationalisation 1969, 1980 | Narasimham Committee | LPG Reforms
Question 2
Reserve Bank of India — Functions & Role
16 marksMost Asked
RBI Act 1934 | Note issuance, banker to govt, monetary policy, credit control, supervision
Question 3
Banker-Customer Relationship — Nature & Types
16 marksMost Asked
Debtor-Creditor, Bailor-Bailee, Principal-Agent, Trustee-Beneficiary, Mortgagor-Mortgagee
Question 4
KYC Norms & Anti-Money Laundering
16 marksImportant
Customer identification, due diligence, risk categorisation, PMLA 2002, suspicious transaction reporting
Question 5
Rights & Obligations of Banker and Customer
16 marksImportant
Right of lien, set-off, appropriation | Duty of secrecy, honour cheques, Tournier's case
U2
Deposits & Accounts
Types of deposits, special customers, nomination, passbook, garnishee orders
Open Unit 2 →
Question 1
Types of Deposits — Demand, Time & Recurring
16 marksMost Asked
Savings, Current, Fixed, Recurring | DICGC insurance up to Rs. 5 lakh | Interest rate rules
Question 2
Accounts of Special Customers — Joint, Minor, Insolvents, Lunatics
16 marksMost Asked
Joint account operations | Minor's account under guardian | Insolvency — Official Assignee | Lunatic — Court of Wards
Question 3
Nomination & Settlement of Claims of Deceased Depositors
16 marksMost Asked
S.45ZA-ZF BR Act | Nomination procedure | Succession certificate vs nomination | Simplified procedure
Question 4
Passbook — Evidentiary Value & Legal Effects
16 marksImportant
Passbook as settled account | Estoppel | Errors — bank's right to rectify | Not conclusive proof
Question 5
Garnishee Order & Attachment of Bank Deposits
16 marksImportant
Order Nisi vs Order Absolute | Effect on banker | Joint account attachment | Safe custody items
U3
Loans, Advances & Credit Control
Types of credit facilities, credit control methods, pledge, hypothecation & mortgage
Open Unit 3 →
Question 1
Types of Credit Facilities — Loans, Overdraft & Cash Credit
16 marksMost Asked
Term loans, OD, CC, bills discounting | Secured vs unsecured | Short/medium/long term
Question 2
Credit Control by RBI — Quantitative & Qualitative Methods
16 marksMost Asked
Bank rate, repo/reverse repo, CRR, SLR, OMO | Selective: margin, rationing, moral suasion, direct action
Question 3
Pledge — Definition, Essentials & Rights of Parties
16 marksMost Asked
S.172 Indian Contract Act | Delivery of possession | Pawnor vs Pawnee rights | Sale on default
Question 4
Hypothecation & Mortgage — Distinction & Banker's Rights
16 marksImportant
Hypothecation (possession with borrower) vs Mortgage (immovable property) | Types of mortgage | Registration
Question 5
Banker's Lien & Right of Set-Off
16 marksImportant
General lien vs particular lien | S.171 Contract Act | Conditions for set-off | Clayton's case
U4
Negotiable Instruments
NI Act 1881 — cheques, crossing, endorsement, paying/collecting banker, S.138
Open Unit 4 →
Question 1
Negotiable Instruments — Definition, Features & Types
16 marksMost Asked
S.13 NI Act | Promissory Note, Bill of Exchange, Cheque | Bearer vs Order instruments
Question 2
Crossing of Cheques — Types and Effects
16 marksMost Asked
General vs Special crossing | Restrictive crossing | Account Payee | Not negotiable | S.123-131A
Question 3
Endorsement — Definition and Kinds
16 marksMost Asked
S.15-16 NI Act | Blank, full, restrictive, conditional, partial | Sans recours | Endorsement in full
Question 4
Paying Banker & Collecting Banker — Duties & Protections
16 marksMost Asked
S.85, S.128, S.131 NI Act | Due course payment | Statutory protection | Conversion liability
Question 5
Dishonour under S.138 + Material Alteration + Noting & Protest
16 marksImportant
S.138-142 NI Act | 30-day demand notice | Complaint within 30 days | Material alteration effects
U5
Lending, Ombudsman & E-Banking
Lending principles, securities, Banking Ombudsman, E-Banking, DRT & SARFAESI
Open Unit 5 →
Question 1
Good Lending Principles & Precautions
16 marksMost Asked
Safety, Liquidity, Purpose, Diversity, Profitability, Security | PSL 40% ANBC | PMMY, DRI Scheme
Question 2
Securities for Advances — Kinds & Precautions
16 marksMost Asked
Land, Goods, Documents of Title, Stock Exchange Securities, LIC Policies | Pledge vs Hypothecation
Question 3
Banking Ombudsman — Powers, Functions & Rejection
16 marksMost Asked
RBI scheme | CGM rank | Award up to Rs. 20 lakh | Integrated Ombudsman 2021 | Grounds for rejection
Question 4
E-Banking Services & Recent Trends
16 marksMost Asked
RTGS, NEFT, ECS, ATM, Internet/Mobile Banking, UPI, POS | Cards | Challenges — security, rural access
Question 5
DRT & SARFAESI Act — Jurisdiction, Powers & Functions
16 marksImportant
RDDBFI Act 1993 | 39 DRTs, 5 DRATs | SARFAESI 2002 — recovery without courts | 60-day notice | NPA process

Complete Syllabus Reference

Unit 1 — Introduction to Banking Law

Origin, growth and development of banking in India. Definition of banking and banking company. Types of banks. Reserve Bank of India — functions and role. Banker-customer relationship — nature and types. KYC norms and anti-money laundering. Rights and obligations of banker and customer.

Unit 2 — Deposits & Accounts

Types of deposits — demand, time and recurring. Opening and operation of accounts. Special customers — joint account, minor, insolvents, lunatics, married women, trustees, executors, companies, partnership firms. Nomination and settlement of deceased depositor claims. Passbook — legal effects and evidentiary value. Garnishee order and attachment.

Unit 3 — Loans, Advances & Credit Control

Types of credit facilities — loans, overdraft, cash credit, bills discounting. Secured and unsecured advances. Pledge, hypothecation, mortgage, lien and assignment. Credit control by RBI — quantitative and qualitative methods. Banker's lien and right of set-off.

Unit 4 — Negotiable Instruments

Negotiable Instruments Act, 1881 — promissory note, bill of exchange, cheque. Features and types. Crossing of cheques — general, special, restrictive, not negotiable. Endorsement — definition, kinds. Paying banker and collecting banker — duties and statutory protections. Dishonour of cheques under S.138. Material alteration. Noting and protest.

Unit 5 — Lending, Ombudsman & E-Banking

Principles of sound lending. Secured and unsecured loans. Different kinds of securities for advances — goods, hypothecation, immovable property, gilt-edged securities. Banking Ombudsman — powers, functions and grounds of rejection. E-Banking services — internet banking, mobile banking, ATMs. Debt Recovery Tribunals. SARFAESI Act, 2002.