A Study of the Banking Companies Acts, 1970

The banking act has been approved and passed in the highest houses of the country just in order to provide secure, safer, and more effective utilization of the assets of the banks. In order to gain an interbank control regulation to avoid the unwarranted alteration of funds into theoretical operations and other tenacities. 

Section 19 of the constitution mentions the banking companies as acquisition and transfer of undertakings, an act of 1970. The diversity of power being exercised by not only the power-holders of the post-owners was changed into an ideology of processing and executing the bank rights and laws. With the reformation, the public and the other bank employers had got a more flexible power to exercise their betterment in finances.  

The banking regulation act was first passed or issued in the parliament in the year 1949. After many years of turnovers and debating, it became more verified, and required changes were made to it time and again. 

Banking Act of 1970

The revised lesson of the banking act made it more feasible, and its regulation became more flexible. The exercised new laws and inclusion of new laws made an easier banking service available. 

The changes and the new powers that were included under this act were:

Power to make New Regulations:

This law allowed the Board of Directors of any specific bank to make decisions regarding their bank after consultation and permission from the Reserve Bank of India. They must also make laws that should co-exist with the previous sanctions made by the Central government. 

Customary Law:

Every bank shall observe the usage and exercise of the customary law among its bankers. The bank shall not, in any case, share fraud or false information relating to its constituent affairs. Only in situations where the usage or passage of the wrong or fraudulent messages under the allowance of the law can divulge any information. 

Form of Fidelity:

Before taking up a position as the director, a member of a local board, committee, auditor, adviser, officer, or another employee of a corresponding new bank shall sign a form of fidelity and secrecy as in the Third Schedule. 

The fidelity and secrecy terms, as mentioned and declared as proof before joining, shall in no way disclose or apply any credit-related information under the Credit Information Companies. 

Banking Act in the safety of the Stakeholders

The banking act of 1970, under a section, included about the security and safety of the stakeholders. It was decided in the act that all the decisions regarding the way in which the business shall run, the way in which the business of the local boards shall be executed and regulated, the matter of giving the shareholders their equal level of share should all be decided unanimously and must be transparent and easy to exercise for all. 

It also took the concept of drafting out all the transactions made in a registration copy, which again is specifically separated into sub-sections as per the type of transaction made. 

It also gave power to the bankers to exercise power to choose the members of the board of directors. Also discusses about the manner in which any general meetings shall be convened, all according to the procedure without the inclusion of any threat or other discrepancies. 

Conclusion

Banks are the place our assets turn into our wealth for a secured future. In the early 90s, it was marked that there shall be stringent laws for the governance of banks. So, then the Bank Act came into action. The Bank Act of 1970 is one of the acts that verified and proposed the best laws that will both help the public and the bankers themselves. Today India’s banking system still is stuck with the laws made earlier, which are considered the most flexible to date.