LAWS – BANKING

Various Laws Affecting Bankers

1. RBI Act 1934

2. Banking Regulation Act 1949

3. Negotiable Instrument Act 1881

4. Indian Contract Act 1872

5. Indian Partnership Act 1932

6. The Companies Act 1956

7. Consumer Protection Act 1986

8. Banking Ombudsman Act 2006

9. Transfer of property Act 1882

10. Foreign Exchange Management Act 1999

11. Indian Stamp Act 1899

12. Code of Civil Procedure 1908

13. Banker’s book Evidence Act 1891

14. Information Technology Act 2000

15. Right to Information Act 2005

16. Recovery of Debt Due to Banks And Financial Institutions Act 1993 (DRT Act)

17. Securitisation & Reconstruction of Financial Assets and Enforcement of Security interest Act 2002 (SARFAESI Act 2002)

Indian Contract Act 1872

Who is competent to contract – Sec 11

Every person is competent to contract who is of the age of majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which he is a Subject

A minor is a person who has not attained majority. According to Sec 3 of Indian Majority Act 1875, a minor is a person who has not completed 18 years of age. Where a guardian has been appointed by court (for minor’s person or property or both) , the minor attains majority on completion of 21 years.

A contract with a minor is void ab-initio (Right from inception)

Contract with a minor is void but minor’s discharge on cheque having received money by him is valid. Hence, Banks open deposit accounts in the name of the minor in his/ her single name provided he can read & write and is capable of understanding as to what he/she is doing.

According to Sec 26 of N.I. Act, a minor can draw, endorse or negotiate a cheque or bill of exchange binding all parties