JAIIB AND DB&F Paper 3 Syllabus: Legal & Regulatory Aspects of Banking

Dear Readers,


So, in the previous articles, we read and discussed about JAIIB/DB&F, exam pattern, Eligibility, Schedule, Registration fees and Syllabus of Paper 2 in detail.
Now, in this article, we will be discussing about the JAIIB/DB&F Subjects and Syllabus of PAPER 3 subject in details.

SUBJECTS OF EXAMINATION: 

(1) Principles & Practices of Banking, (Paper 1)
(2) Accounting & Finance for Bankers, (Paper 2)
(3) Legal & Regulatory Aspects of Banking (Paper 3)

PAPER 3 – LEGAL & REGULATORY ASPECTS OF BANKING

This Paper 3 Subject is divided into four Parts (A,B,C and D)

PART A – REGULATIONS AND COMPLIANCE

Legal Framework of Regulation of Banks
Business of Banking; Constitution of Banks; RBI Act, 1934; Banking Regulation Act, 1949; Role of RBI; Govt. as a Regulator of Banks; Control over Co-operative Banks; Regulation by other Authorities.

Control over Organization of Banks
Licensing of Banking Companies; Branch Licensing; Paid up Capital and Reserves; Shareholding in Banking Companies; Subsidiaries of Banking Companies; Board of Directors; Chairman of Banking Company; Appointment of Additional Directors; Restrictions on Employment; Control over Management; Corporate Governance; Directors and Corporate Governance.

Regulation of Banking Business
Power of RBI to Issue Directions; Acceptance of Deposits; Nomination; Loans and Advances; Regulation of Interest Rate; Regulation of Payment Systems; Internet Banking Guidelines; Regulation of Money Market Instruments; Banking Ombudsman; Reserve Funds; Maintenance of CRR, SLR; Assets in India.

Returns Inspection, Winding up, Mergers & Acquisitions
Annual Accounts & Balance Sheet; Audit & Auditors; Submission of Returns; Preservation of Records and Return of Paid Instruments; Inspection and Scrutiny; Board for Financial Supervision; Acquisition of Undertakings; Amalgamation of Banks; Winding up of Banks; Penalties for offences.

Public Sector Banks and Co-operative Banks
SBI and its Subsidiaries; Regional Rural Banks; Nationalized Banks; Application of BR Act to Public Sector Banks; Disinvestment of Shares by Govt.; Co-operative Banks

Financial Sector Legislative Reforms
Need, Approach for Financial Sector Legislative Reforms; Important Reforms

Recent Legislative Changes in RBI Act
Recent Legislative Changes in RBI Act, Need thereof

Financial Sector Development Council
Role and Functions of Financial Sector Development Council


PART B – LEGAL ASPECTS OF BANKING OPERATIONS

Different Types of Borrowers
Types of Borrowers; Limited Liability Partnership

Types of Credit Facilities
Cash Credit, Overdraft, Demand Loans, Term Loans, Bill Finance

Secured and Unsecured Loans, Registration of Firms and Incorporation of Companies
Definition of Secured and Unsecured loans; Need for Secured Loans; Registration of Firms; Consequences of Non-registration of Firms; Incorporation of a Company

Indemnities
Definition of Contract of Indemnity; Features of Indemnity Contract & Guarantee; Scope and Application of Indemnity Contracts to Banks; Obligations of a Banker; Precaution & Rights of an Indemnity Holder

Bank Guarantees
Definition and Types of Bank Guarantees; Banker’s Duty to Honour Guarantee; Precautions to be taken for Issuance of Bank Guarantee; Precautions to be taken for Payment under Bank Guarantee; Invocation & Enforcement.

Letters of Credit
General Considerations of Letters of credit; Parties to a Letter of credit; Types of Letters of credit; Documents under a Letter of credit; UCPDC 600; Banks obligation for payment of Letter of credit.

Deferred Payment Guarantees
Purpose of DPGs; Methods of Payment

Laws Relating to Bill Finance
Class of Bills and Laws Governing Bills; Classification of Bills; Categories of Bill Finance; Bill Finance and Legal Position of Banker

Various Types of Securities
Types of Securities; Escrow Arrangements; Trust and Retention Arrangements.

Laws Relating to Securities and Modes of Charging – I
Mortgage; Types of Mortgage; Enforcement of Mortgages

Laws Relating to Securities and Modes of Charging – II
Lien; Pledge; Hypothecation; etc.

Registration and Satisfaction of Charges
Definition of Charge; Procedure for Registration of Charge; Effect of Non-registration of Charges; Provisions of Law relating to Registration of Charges

Case Laws on Responsibility of Paying Bank
Negotiable Instruments Act and Paying Banks; Liability of Paying Banker; Payment in due course; Payment in Good Faith; Whether Payment under Mistake Recoverable

Case Laws on Responsibility of Collecting Bank
Statutory protection to Collecting Bank; Duties of Collecting Bank


PART C – BANKING RELATED LAWS

Recovery of Debts due to Banks and Financial Institutions Act, 1993(DRT Act)
Objective of the Act, Constitution of Tribunal, Procedure to be followed, Enforcement process

Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI)
Constitutional Validity; Definitions; Regulation & Reconstruction; Enforcement of Security Interest; Central Registry; Offences & Penalties; Miscellaneous Provisions

Banking Ombudsmen Scheme
Purpose; Extent; Definitions; Establishment; Powers; Procedure for Redressal Grievance

Bankers Books Evidence Act, 1891
Applicability; Definition; Important Provisions

The Legal Services Authorities Act, 1987
Lok Adalats- Organisation; Jurisdiction; Disposal of Cases; Awards

The Consumer Protection Act, 1986 and CERSAI
Preamble, Extent & Definitions; Consumer Protection Councils; Consumer Disputes Redressal Agencies; Objectives and important provisions of Central Registry of Securitisation Asset Reconstruction and Security Interest of India

The Law of Limitation
Definition; Computation of Limitation; Important Provisions in schedule to the Limitation Act

Tax Laws
Income Tax; Commodity Transaction Tax; Service Tax

Negotiable Instruments Act, 1881
Applicability; Definition; Important Provisions

Payment & Settlements Systems Act, 2007
Applicability; Definition; Important Provisions


PART D – COMMERCIAL LAWS WITH REFERENCE TO BANKING OPERATIONS

Indian Contract Act, 1872
Meaning and essentials of contract; Contract of Indemnity & Rights of Indemnity Holder; Contract of Guarantee; Contract of Bailment; Contract of Pledge; Contract of Agency

The Sale of Goods Act, 1930
Features; Sale & Agreement to Sell; Conditions and Warranties; Express & Implied; Rights of Unpaid Seller
Indian Partnership Act, 1932
Definition & Types of Partnerships; Relation of partners to one another & to third Parties; Minor admitted to benefits of partnership; Dissolution of a firm; Effect of non registration; Limited liability partnerships formation, registration, rights and liabilities of partners

Definition and features of a company
Definition & Features of a Company; Distinction between Company and Partnership

The Companies Act, 1956 (Now Companies Act, 2013 )
Definition, Features & Types of companies; Memorandum and Articles of Association; Doctrine of Ultra Vires, Constructive Notice, Indoor Management; Membership of Company- Acquisition, Cessation, Register, Rights & Duties of Members, Prospectus; Directors; Winding up of Companies

Foreign Exchange Management Act, 1999
Important Terms; Powers of RBI, Regulation and Management; Directorate of Enforcement

Transfer of Property Act, 1882
Sale, Mortgage of Immovable Property; Types of Mortgages; Sale with and without court
intervention; Lease of Immovable Property

The Right to Information Act, 2005
Applicability; Definition; Important Provisions

Right to Information and Obligation of Public Authorities
Obligations; Procedure; Disposal; Appeal; Orders; Penalties.

The Prevention of Money Laundering Act, 2002
Obligations; Records to be Maintained; Procedure for Maintaining & Furnishing Information; Maintenance & Verifications of Records of Identity of Clients.

Information Technology Act, 2000
Definitions; Electronic Governance; Certifying Authorities; Digital Signature Certificates; Penalties; Appeal.


On the very next upcoming Articles, we will be discussing about the subjects and how to plan for it, study for it. We will be starting up with Notes, Quizzes and finally we together will start the preparation for these.

We want our readers to be on the top of every profession specially our Banking aspirants and bankers who think that there is no way to stop where you are and there is never a stop to your growth. And believe us You can’t miss these courses. It is not mandatory but yes it is very very important for your knowledge and growth in any banking or financial institution.

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