Premium Essay

Statutory & Other Restrictions on Loans & Advances

In: Business and Management

Submitted By pavanbangaru
Words 4985
Pages 20

[Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]



Advances against bank's own shares:
A bank cannot grant any loans and advances on the security of its own shares.( Section 20(1) of the Banking Regulation Act, 1949)

Advances to bank's Directors :
Banks are prohibited from entering into any commitment for granting any loans or advances to or on behalf of any of its directors, or any company/firm in which any of its directors is interested as partner, manager, employee or guarantor (B.R Act (Section 20(1).

‘Loans & advances’ include, among others:-
• Purchase of or discount of bills from directors and their concerns.
• Issuance of guarantees and opening of L/Cs on behalf of the bank’s directors.

Restrictions on Power to Remit Debts
A banking company shall not, except with the prior approval of the Reserve Bank, remit in whole or in part any debt due to it by any of its directors or any firm or company in which the directors are having interest or partner or guarantor. (Sec. 20A of BR Act)

Restrictions on Holding Shares in Companies
Banks should not hold shares in any company except as provided in sub-section whether as pledgee, mortgagee or absolute owner, of an amount exceeding 30 percent of the paid-up share capital of that company or 30 percent of its own paid-up share capital and reserves, whichever is less. (Section 19(2) of the Act)

The banks should not hold shares whether as pledge , mortgagee or absolute owner, in any company in the management of which any managing…...

Similar Documents

Premium Essay

Trust Bank Bangladesh Limited

...Non-availability of some preceding and latest data.  Some information was withheld to retain the confidentiality of the bank.  I was placed to this department for only 2 months of time and working like a regular employee hindered the opportunity to put the better effort for the study. With all of this limitation I tried my best to make this report as best as possible. So readers are requested to consider these limitations while reading and justifying any part of my study. CHAPTER-2 2.1 BACKGROUND OF THE BANK Trust Bank Limited is one of the leading private commercial bank having a spread network of 41 branches across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2010. The bank, sponsored by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide range of modern corporate and consumer financial products Trust Bank has been operating in Bangladesh since 1999 and has achieved public confidence as a sound and stable bank. 2.2 VISION, MISSION ,POSITIONING STATEMENTS AND VALUES VISION We aim to provide financial services to meet customer expectations so that customers feel that we are always there when they need us, and can refer us to their friends with confidence. We want to be a preferred bank of choice with a distinctive identity. MISSION Our mission is to make banking easy for our customers by implementing one-stop service concept......

Words: 4013 - Pages: 17

Free Essay

Credit Appraisal at Hdfc Bank

...PROJECT REPORT ON {Commercial Credit Appraisals} “It Revolves around Character, Collateral & Capacity”   FOR {HDFC Bank}   BY ()       Submitted in partial fulfillment of requirements for award of  Post Graduate Diploma in Management   ATHARVA SCHOOL OF BUSINESS Marve Road, Charkop Naka, Malad (W), Mumbai 400 095   DECLARATION   I hereby declare that the Project titled "{Commercial Credit Appraisals With HDFC Bank Ltd}" submitted as a part of the study of Post Graduate Diploma in Management (PGDM) is my original work. The Project has not formed the basis for the award of any other degree, diploma, associate ship, fellowship or any other similar titles.     Place: Mumbai Date:   CERTIFICATE   This is to certify that () has completed the Project "{Commercial Credit Appraisals}" under the guidance of Prof. in partial fulfillment of the requirements for the award of Post Graduate Diploma in Management for the academic period 2009-11.       Signature of the Guide                                                          Signature of the Director Place: Mumbai Date:   ACKNOWLEDGEMENTS   I take this opportunity to express my gratitude and extend my thanks  to all those whose help and guidance made this endeavor successful.    I extend my sincere thank to Shri Sunil Rane, Executive President, Atharva Education Trust; Shri N. S. Rajan,......

Words: 7476 - Pages: 30

Premium Essay

Rbi Exposure Norms

...SUMMARY OF MASTER CIRCULAR ON EXPOSURE NORMS INTRODUCTION As a prudential measure aimed at better risk management and avoidance of concentration of credit risks, the Reserve Bank of India has advised the banks to fix limits on their exposure to specific industry or sectors and has prescribed regulatory limits on banks’ exposure to individual and group borrowers in India. In addition, banks are also required to observe certain statutory and regulatory exposure limits in respect of advances against / investments in shares, convertible debentures /bonds, units of equity-oriented mutual funds and all exposures to Venture Capital Funds (VCFs). Banks should comply with the following guidelines relating to exposure norms. Purpose This is a summary on Master Circular providing framework of the rules/regulations/instructions issued by the Reserve Bank of India to Scheduled Commercial Banks relating to credit exposure limits for individual / group borrowers and credit exposure to specific industry or sectors, and the capital market exposure of banks. Definition of 'Credit Exposure' The total amount of credit extended to a borrower by a lender. The magnitude of credit exposure indicates the extent to which the lender is exposed to the risk of loss in the event of the borrower's default. Credit Exposures to Individual / Group Borrowers • Exposure to a single borrower not to exceed 15% of bank’s capital funds • Exposure to a group of borrowers not to exceed 40% of......

Words: 4093 - Pages: 17

Premium Essay

Contract Employment

...period of time. Employment contract is that form of contract for personal service which the courts recognize as expressing the social relationship of employer and employee, as opposed to the other relationships. ESSENTIAL FEATURES: The essential features of contract of employment are * offer * acceptance * consideration * competent parties * legal object and * free consent. LITERATURE REVIEW NATURE OF CONTRACT EMPLOYMENT A contract of employment also contains various other terms and conditions to which both employee and employer are bound. A breach of such terms and condition will repudiate the contract. The terms and conditions are regarding wages, status designated, place of working, timings, list of benefits to be given during employment, restraint of trade, if any etc. Another important condition is regarding the settlement of disputes between the employer and the employee. The terms and conditions must be provided to the employee before or at time of signing the agreement, so that he can understand the terms he is going to be bound by. After reading all the terms and conditions of the agreement, it should be signed by both the parties. A subsequent notification will indeed amount to modifications in the original contract and will not bind the other party unless he has assented thereto. In a normal contract the negotiating parties stand at equal footing. But in case of employment contract, the employee is always at the receiving......

Words: 1914 - Pages: 8

Premium Essay


...TASK 1 An employer’s obligations to his employee regarding pay are that an employer must administer pay, deduct taxes and pay benefits to their employees, employers must administer PAYE, National Insurance (Class 1 and 1a), Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay and student loan deductions. An employer must provide employees with an itemised pay statement and pay employees with an itemised pay statement and pay employees in full at an agreed time. Employers must provide paid holidays for all workers, and pay men and women equally for equal work. Should a situation arise where an employer can not provide work they must pay ‘guarantee payments’. An employer must provide paid paternity and paid maternity leave to qualifying employees. An employer must pay employees at least the minimum wage prescribed by law. TASK 2 An employer can employ a 15 year old youth but only for certain hours and jobs. A 15 year old can not be employed in places such as a factory or industrial site. There are local bylaws which list the jobs that children can not do. These bylaws may also have other restrictions relating to working hours and conditions or require an employment permit. As an adolescent a 15 year old employee is entitled to two days rest each week and 12 hours rest in any 24 hours hour period. They must not work during school, before 7am or after 7pm, and are entitled to a break of at least 1 hour after working 4 hours. During term time a 15...

Words: 2278 - Pages: 10

Premium Essay

Business and Management this competitive world. Bangladesh is a promising one, but was still in the list of most poor countries. We are very much needed by qualified persons, new ideas, to utilize our resources and for development of entrepreneurship. For this why we need to convert our knowledge into practical. In this case term paper is very much beneficiary for a student of business. Summary: Accounting standard is very much needed for an organization to be internationalized. To maintain the unique system in the accounting system one company has to follow every provision of the IAS. Otherwise lots of problem will be created to be internationalized. Bank Asia followed the IAS in preparing the financial statement. Even in the notes they disclose the other part which makes clearer to the users of the financial statement. In the notes they disclose what the provisions of banking act,1994,& company act,1991 that they followed. This is the part of corporate governance which they ensured. Even Bank Asia followed international corporate governance institutional guideline to prepare financial statement. For this why any one can easily understand the information of Bank Asia’s financial statement. Contents | | |Page Numbers | |Chapter - 01 | Introductory Aspects |07 ......

Words: 5657 - Pages: 23

Premium Essay

Alm Practice in Banks: a Perspective of the Southeast Bank Ltd.

...Paid-Up-Capital and Reserve reached 19,000.06 million as of December 31, 2011. The incumbent Chairman of the Bank is Mr. Alamgir Kabir, FCA, a professional Chartered Accountant. The Bank’s Managing Director is Mr. Mahbubul Alam, an eminent banker of the country with 43 years experience in both nationalized and local private sector banks to his credit. The Bank, in the meantime, successfully completed 17th year of banking operations recording significant growth in all the performance indicators. In 2011, the Bank earned an after tax profit of Tk. 1,912.19 million. The deposit of the bank grew by 18.58 percent to Tk.127, 178.22 million and advance by 14.16 percent to Tk.107, 288.56 million compared to those of 2010. During the last five years (2007-2011), the Bank achieved an average annual growth of 23 .52 percent in deposit, 22.29 percent in advances, 28.12 percent in export and 28.94 percent in import and 47.15 percent in remittance. During the last six years, the export volume increased by three times to Tk.75,982.06 million and foreign remittance increased by almost four times to Tk.49,544.10 million. Today it has become one of the country’s leading banks in the private sector. Operational excellence coupled with qualitative improvements continued to be of paramount importance to the Bank. At present, the Bank has 84 branches and 2 Off-Shore Units across the country. Plans have been drawn to open another 12 branches in 2012 (Southeast Bank Ltd., Annual Report 2011,......

Words: 9186 - Pages: 37

Premium Essay

Financial Statement

...AB Bank Limited BCIC Bhaban 30-31 Dilkusha Commercial Area Dhaka 1000 AB Bank Limited _____________________ Auditors’ report and consolidated financial statements for the year ended 31 December 2011 S. F. AHMED & CO Chartered Accountants House 25, Road 13A, Block D, Banani, Dhaka 1213, Bangladesh Telephones (880-2): PABX 989-4346 & 989-4258 Others 881-6467 & 881-5101 Fax (880-2): 882-5135 E-mails: (i) (ii) Website: Auditors’ Report to the Shareholders of AB Bank Limited We have audited the accompanying consolidated financial statements of AB Bank Limited (“the Bank”) and its subsidiaries, namely, AB Investment Limited, AB Securities Limited, Cashlink Bangladesh Limited, AB International Finance Limited and AB Exchange (UK) Limited which comprise Consolidated Balance Sheet at 31 December 2011 and Consolidated Profit and Loss Statement, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and Liquidity Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards, and for such internal control as management considers necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud and......

Words: 43601 - Pages: 175

Premium Essay

Financial System

...3. Classification of Financial Instruments lassification of financial instruments and identification of their nature is one of the most important phases for compilation and presentation of monetary statistics. Like other classifications used in monetary statistics, it is also advisable here to follow international standards that would help to make statistics comparable across countries’ and ensure its unity. In carrying out classification, there will be a need to consider features of a country’s banking and financial system paying a due regard to their development prospects. C Financial instruments are financial contracts of different nature made between institutional units. These comprise the full range of financial claims and liabilities between institutional units, including contingent liabilities like guarantees, commitments, etc. Financial asset is defined as any contract from which a financial claim may derive for one party and a financial liability or participation in equity for another. Financial instrument can exist only between two institutional units. Where financial instruments are compounded, i.e. represent a set of several instruments, for compilation of statistics there will be a need to distinguish them into separate instruments so that each of them includes only a single pair of institutional units. Financial assets are contracts that do not contain contingency, i.e., irrespective of any conditions, generate financial claims having demonstrable......

Words: 5536 - Pages: 23

Premium Essay

Auditing in Banks

...Insurance By Ms. ANERI SHAH ROLL NO.88 K.J.SOMAIYA COLLEGE OF ARTS, & COMMERCE, VIDYAVIHAR (EAST), MUMBAI-400077 CERTIFICATE This is to certify that Ms.ANERI SHAH of Banking & Insurance Semester V (Academic Year) 2012-2013 has successfully Completed Project on “A STUDY ON BANK AUDITING” under the guidance of PROF.SONALI DEOGIRIKAR (Mrs.SMITA DAYAL) (Dr.SUDHA VYAS) Course co-ordinator Principal INTERNAL EXAMINER EXTERNAL EXAMINER (Mrs. SONALI DEOGIRIKAR) Project Guide DECLARATION I, Ms. ANERI SHAH the student of - Banking & Insurance - Semester V (2013-2014) hereby declares that I have completed Project on “A STUDY ON BANK AUDITING”. Wherever the data/information has been taken from any book or other sources have been mentioned in bibliography. The information submitted is true and original to the best of my knowledge. Student’s Signature Ms. ANERI SHAH (ROLL NO.88) ACKNOWLEDGEMENT On the event of completion of my project “A STUDY ON BANK AUDITING”. I take the opportunity to express my deep sense of gratitude towards all those people without whose guidance, inspiration, & timely help this project would have never seen the light of day. Heartily thanks to Mumbai University for giving me the opportunity to work on this project. I would also like to thank our principal Dr. SUDHA VYAS for giving us the brilliant opportunity to work on this project. . I find great pleasure in expressing my deepest sense of gratitude towards......

Words: 15830 - Pages: 64

Premium Essay

Banking Sector Performance, Regulation and Bank Supervision

...largest banks) share in deposits decreased from 46.0 percent in 2003 to 42.8 percent in 2004. On the other hand, PCBs' deposits in 2004 amounted to Taka 588.0 billion or 44.3 percent of the total industry deposit against Taka 468.2 billion or 41.1 percent in 2003. FCBs' deposits in 2004 rose by Taka 11.00 billion or 13.0 percent over the previous year. The DFIs' deposits in 2004 were Taka 75.1 billion against Taka 62.6 billion in 2003 showing an increase of 20.0 percent over the year. 5.2 In 2004, the nationalized commercial banks (NCBs) held 39.6 percent of the total industry assets against 41.7 percent in 2003. Evidently, NCBs' domination in this area is showing a declining trend, while PCBs’ share rose to 43.5 percent in 2004 against 40.8 percent in 2003. The foreign commercial banks held 7.2 percent of the industry assets in 2004, showing a little decrease by 0.1 percentage point over the previous year. There has been a decline in the operation of the DFIs with their shares of assets of only 9.7 percent in 2004, against 10.2 percent in 2003. Aggregated Balance Sheet 5.4 Assets: Aggregate industry assets in 2004 registered an overall increase by 14.0 percent over 2003. During this period, NCBs' assets increased by 8.2 percent and those of the PCBs rose by 21.2 percent. Loans and advances played a major role on the uses of fund. Loans and advances amounting to Taka 1,047.1 billion out of aggregate assets of Taka 1,725.5 billion Table......

Words: 7734 - Pages: 31

Premium Essay

Depository Institutions: Commercial Banking Industry of Bangladesh

...sheet activities of commercial banks is discussed. In chapter 5 we have described some important regulations of commercial banks those are regulated by Bangladesh Bank. Some provisions of Banking Company Act 1991 were discussed. From this discussion, we have found that Banking Companies Act 1991 was amended 7 times. We have showed the regulations important for banking industry. Under Basel-II, banks in Bangladesh are instructed to maintain the Minimum Capital Requirement (MCR) at 10.0 percent of the Risk Weighted Assets (RWA) or Taka 4.0 billion as capital, whichever is higher. In chapter 6 we have showed the performance and trends. The amount of capital was increased showing capital growth of 216.8 percent. The ratio of NPL to total loans of all the banks had shown an overall declining trend from its peak in 2000 up to 2011. But the ratio increased in 2012, decreased again in 2013 then increased at end June 2014. Technical competence & leadership of mid and senior level management, compliance to plan and respond to changing circumstances, etc., are also taken into consideration in evaluating the quality of management. There was an increasing trend in the percentage of liquid assets in total assets of the banks during the last four years. TABLE OF CONTENTS Chapter No Name of Content 1. Preliminaries 1.1 Origin of the report 1.2 Scope of the report 1.3 Methodology of the report 1.4 purpose of the......

Words: 9131 - Pages: 37

Premium Essay

Anunual Report

...69TH ANNUAL REPORT 2013-14 04 WHAT’S INSIDE CORPORATE OVERVIEW STATUTORY REPORTS 02 Corporate Information 44 Notice 03 Mission, Vision and Values 53 Directors’ Report 04 Chairman’s Message 69 Management Discussion & Analysis 08 Board of Directors 104 Corporate Governance 12 Tata Motors at a Glance 14 Major Launches during the Year 125 Secretarial Audit Report Chairman’s Message 16 Presence across Markets To ensure long-term competitiveness of Tata Motors, the company also took several steps under the Horizonext strategy. FINANCIAL STATEMENTS 18 The NEXT Level in Design 20 The NEXT Level in Driving Experiences 22 The NEXT Level in Fuel Economy 14 24 The NEXT Level in Connectivity 26 Corporate Social Responsibility at Tata Motors Standalone Financial Statements 126 Independent Auditors’ Report 130 Balance Sheet 131 Statement of Profit and Loss 132 Cash Flow Statement 134 Notes to Accounts 30 Awards and Accolades 32 Financial Performance Our products represent the Horizonext philosophy with best-in-class offerings. 170 Independent Auditors’ Report 36 Summarised Balance Sheet and Statement of Profit and Loss (Consolidated) Major Launches during the Year Consolidated Financial Statements 172 Balance Sheet 38 Summarised Balance Sheet and Statement of Profit and Loss (Standalone) 40 Funds Flow - Last Five Years 41 Financial Statistics 173 Statement of......

Words: 117039 - Pages: 469

Premium Essay

Economy and Financial Sector

...certificates of deposits and other types of commercial borrowings. The major risk a bank runs is liquidity risk. Under any circumstances a bank has to honor its commitments. As a result, it has to make sure that enough liquidity is available to meet fund requirements in situations like liquidity crisis in the market, policy changes by central bank, a name problem of the bank etc. So, a bank’s balance sheet should have enough liquid assets for meeting contingencies. Here, I can introduce with the theoretical development of asset liability management from the different aspects of The City Bank Limited. Then I can show their policy and statements regarding to the managing their assets liabilities and then I have shown their liquidity analysis through the external analysis to assess their recent market condition. The whole analysis part is undergone from 2004 to 2008. In this analysis part I have analyzed different ratio related to liquidity management so that liquidity position of CBL can easily be assessed. Then I have shown the maturity model from 2004 to 2008. In this analysis CBL’s weighted average assets and liabilities are compared. Here we can see that except 2004 the bank’s assets’ weighted average maturity always higher than its weighted average liabilities’ maturity. Then I also analyze the ratio related to assets’ quality of CBL. Then I have performed the statistical analysis. In this part I have shown trend analysis on loans & advances, deposit and net liquidity......

Words: 8580 - Pages: 35

Premium Essay

Cash Flow

...69TH ANNUAL REPORT 2013-14 04 WHAT’S INSIDE CORPORATE OVERVIEW 02 Corporate Information 03 Mission, Vision and Values 04 Chairman’s Message 08 Board of Directors 12 Tata Motors at a Glance 14 Major Launches during the Year 16 Presence across Markets 18 The NEXT Level in Design 20 The NEXT Level in Driving Experiences 22 The NEXT Level in Fuel Economy 24 The NEXT Level in Connectivity 26 Corporate Social Responsibility at Tata Motors 30 Awards and Accolades 32 Financial Performance 36 Summarised Balance Sheet and Statement of Profit and Loss (Consolidated) STATUTORY REPORTS 44 Notice 53 Directors’ Report 69 Management Discussion & Analysis 104 Corporate Governance 125 Secretarial Audit Report Chairman’s Message To ensure long-term competitiveness of Tata Motors, the company also took several steps under the Horizonext strategy. FINANCIAL STATEMENTS Standalone Financial Statements 126 Independent Auditors’ Report 130 Balance Sheet 131 Statement of Profit and Loss 132 Cash Flow Statement 134 Notes to Accounts Consolidated Financial Statements 170 Independent Auditors’ Report 172 Balance Sheet 173 Statement of Profit and Loss 174 Cash Flow Statement 176 Notes to Accounts Subsidiary Companies 207 Financial Highlights 210 Listed Securities issued by Subsidiary Companies during FY 2013-14 14 Major Launches during the Year Our products represent the Horizonext philosophy with best-in-class offerings. 38 Summarised Balance Sheet and Statement of Profit and...

Words: 116965 - Pages: 468