Unit-I: History and Introduction to Banking

Syllabus: History of the Banking Regulation Act — Salient features — Banking Business and its importance in modern times — Different kinds of Banking — Impact of Information Technology on Banking.

Part A: 6-Mark Questions

1. Meaning of Banking
2. Scheduled Banks
3. Banking business
4. Banker

Part B: 15-Mark Questions

1. Trace the History of Banking System in India and its importance in modern times.
2. Explain the nature, development and evolution of banking in India.
3. Elucidate the impact of information technology on banking system.

Unit-II: Banker-Customer Relationship

Syllabus: Relationship between Banker and Customer — Debtor and Creditor Relationship — Fiduciary Relationship — Trustee and Beneficiary — Principal and Agent — Bail and Bailee — Guarantor.

Part A: 6-Mark Questions

1. Fiduciary Relationship
2. Banker as Trustee
3. Privity

Part B: 15-Mark Questions

1. What are the rights and duties of the banker?
2. What is the meaning of ‘customer’ and state the relationship between banker and customer?
3. What is the relationship between Banker and Customer? What are the obligations of the banker to the customer on account of such relationship?

Unit-III: Negotiable Instruments

Syllabus: Cheques — Crossed Cheques — Account Payee — Banker’s Drafts — Dividend Warrants, etc. — Negotiable instruments and deemed negotiable instruments — Salient features of The Negotiable Instruments Act — The Negotiable Instruments (Amendment) Act, 2018.

Part A: 6-Mark Questions

1. Promissory Note
2. Indochate Instrument
3. Payment in Due Course
4. Banker’s Drafts
5. Crossing of cheques
6. Deemed negotiable instruments
7. Account Payee
8. Crossed cheque

Part B: 15-Mark Questions

1. What is a Cheque and who can cross a Cheque?
2. State the historical provisions of Negotiable Instruments Act.
3. Discuss the provisions of Negotiable Instruments Act, 1881 dealing with dishonour of cheques.
4. Explain the main characteristics of Negotiable Instruments.

Unit-IV: Paying and Collecting Banker

Syllabus: The Paying Banker — Statutory protection to Bankers — Collecting Banker — Statutory protection — Rights and obligations of paying and collecting bankers.

Part A: 6-Mark Questions

1. Paying Banker
2. Collecting Banker

Part B: 15-Mark Questions

1. Explain the statutory protection provided to the paying Banker.
2. Explain the protection available to collecting banker under the Negotiable Instruments Act.
3. Examine the conditions to be fulfilled by the collecting banker in claiming the statutory protection under the Act.

Unit-V: Banker’s Rights and Loan Recovery

Syllabus: Banker’s lien and set off — Advances — Pledge — Land — Stocks — Shares — Life Policies — Document of title to Goods — Bank Guarantees — Letters of Credit — Recovery of Bank loans and position under the SARFAESI Act, 2002 — Jurisdiction and powers of Debt Recovery Tribunal.

Part A: 6-Mark Questions

1. Letter of Credit
2. Set Off
3. Banker’s Lien
4. Mortgage
5. General Lien of Bankers
6. Debts Recovery Tribunal
7. Banker’s right to set off
8. Kinds of bank guarantees
9. Object of SARFAESI Act
10. Pledge

Part B: 15-Mark Questions

1. Examine critically the legal incidents of Commercial letters of credit.
2. Discuss the powers and functions of the Debts Recovery Tribunals.
3. Discuss the law and procedure under the SARFAESI Act, 2002 in recovering the debts from defaulters by banks.

Part C 10 Mark Questions

1. A customer has deposited with ₹50,000/- for safety of custody in a Bank. Later he becomes a Debtor to the Bank. Explain the Rights of the Banker.
2. A Promissory Note was executed by X to Z. Suddenly X died. Can Z claim against the legal heirs of X? Decide.
3. Cheque is payable to R or Order. It is stolen and the thief forges R’s signature and presents it to the Banker who makes payment in due course. Can R recover the amount from the Bank?
4. A person B accepted a ‘Bill of Exchange’ which is drawn in Paris. The Endorsee in understanding with the Drawer altered the place of drawing the Bills of Exchange from Paris to Rome. Is B liable on the Bill?
5. Mr. Shetty, as customer of SBI Bank has given written instructions to the bank to buy or sell stocks, shares and other securities, before settlement day. Can the banker debiting the customer account with the cost or credit?
6. An open cheque for Rs. 30,000/- favoring Prasad & Co. Ltd. is presented by the Stagner on the counter for cash payment. Discuss the reasons whether the bank is bound to pay or not to pay the Stagner.
7. City Bank sanctions an overdraft limit against the security of a continuing guarantee. The surety dies. Can the bank proceed against the heirs of the surety for the liability? If so, to what extent?
8. A bill of exchange dated 31-10-2019 payable 60 days after sight. Accepted on 04-11-2019. Examine the method of calculation for the purpose of the due date on the instrument.
9. Mr. Reddy approached the bank and deposited some securities, shares and a cheque. What is the nature of contractual relationship between the bank and Mr. Reddy in this transaction?
10. Ms. Himalaya Company issued a cheque on its bankers. A receipt was appended to the cheque and it ordered the banker to make the payment “provided the receipt form at foot hereof is duly signed, stamped and dated”. Is the cheque valid?
11. The cheque is payable to “M or Order”. It is stolen and the thief forges M’s signature and presents it to the banker, who makes the payment in due course. Can M recover the amount from the bank?
12. Mr. James hands over dividend warrants to his banker for collection. He becomes indebted to the bank. Can the bank exercise lien on the dividend warrants?
13. As a banker pay the cheque of the customer ‘B’ before the order of countermanding of the cheque is received by the bank. Is the banker liable for it?
14. False entries were made in the passbook of ‘A’, a customer by the banker. Basing on those entries the customer issued a post-dated cheque. What is the position of the banker?
15. A locker is hired by X and Y jointly and is to be operated by them jointly. Both of them nominated S and W to operate the locker in their absence respectively. Advise the bank in case X dies.
16. The instrument speaks if ‘I promise to pay B, Rs. 500/- when B delivers the goods’ signed by A. Discuss the nature of the transaction between A and B and will the instrument become a promissory note?

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