The question (15 marks)
Define banking under the Banking Regulation Act 1949 and explain, with reference to decided cases, why a moneylender and a trading company taking public deposits fall outside it. (15 marks)
MU Module 1, heads 1.1 to 1.3; pack chapters on the banking system and on the banker-customer relationship.
Plan your answer on paper before you look at the authorities — issue first, then the rule, then apply it to these facts.
It tests Unit 1 · Banking Structure and the Insolvency and Bankruptcy Code of Law of Banking and Negotiable Instruments.
Authorities you will need
- Sajjan Bank (Private) Ltd. v. Reserve Bank of India
- Pandurang Ganpati Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Ltd.
- Banking Regulation Act 1949, ss. 5(b), 5(c), 6(1), 8, 9
- Negotiable Instruments Act 1881, s. 3, on the different meaning of banker
How an answer is marked
A full-marks answer names the issue in one line, states the rule with its section, cites the authority, applies it to these facts and concludes — in that order. The app's model answer for this question is written in exactly that shape, with a checklist to mark your own attempt against.