Essay About Goal Of Financial Inclusion And Salient Features Of Banking Regulation Act

Discuss the Salient Features of Banking Regulation Act 1949
Question 1: Discuss the salient features of Banking Regulation Act 1949 (BRA). Answer: Banking Regulations Act came into force from March 16, 1949. This bill would strengthen the regulatory powers of Reserve Bank of India (RBI) and to further develop the banking sector in India. This would not only help in achieving the goal of financial inclusion by providing more banking facilities but would also provide extra employment opportunities to the people at large in the banking sector. The salient features of Banking Regulation Act, 1949 are as follows:- 1. BRA empowered RBI to supersede the Board of Directors of banking company and at the same time it does not supersede but supplement to Companies Act, 1956. 2. This act gives RBI the power to license banks, control mergers and also impose penalties. 3. To enable banking companies to issue preference shares subject to regulatory guidelines by the RBI. 4. A banking company can’t enter directly or indirectly in buying or selling or barter of goods. 5. It created a Depositor Education and Awareness Fund by utilizing the inoperative deposit accounts. 6. According to this act a banking company incorporated outside India, its accounts must be signed by the manager or principal officer of the company who is in India. 7. This act provides prior approval to RBI for acquisition of 5% or more of shares or voting rights in a banking company by any person and empowering RBI to impose such conditions as it deems fit in this regard. 8. Banking Regulation Act does not permit the bank to hold the land with them for more time. 9. According to Section (13), a banking company is not permitted to pay directly or indirectly by way of commission, brokerage, discount, or remuneration on issues of its shares in excess of 2 ½% of the paid up value of such shares. 10. Primary Agricultural Credit Society Co-Operative land mortgage banks are excluded from this Act. 11. This act provides for special audit of cooperative banks at instance of RBI by extending applicability of Section 30 to them. 12.  The bill shall give the power to check the records and inspect the books of conglomerates and accounts books of mutual funds etc. 13. This bill enables the nationalised banks to raise capital through bonus and rights issue. 14. This bill gives RBI the power to transfer the only lying in the banks account for 10 years to the ” Depositor Education & Awareness Fund”. Question 2 What is financial inclusion? Answer: FINANCIAL inclusion is the delivery of FINANCIAL services at affordable costs to vast sections of disadvantaged and low income groups. Policymakers all over the world are exploring ways and means to ensure greater inclusion of the financially excluded segments of society. Despite India boasting economic growth rates higher than most developed countries in recent years, a majority of the country’s population still remains unbanked. Financial Inclusion is a relatively new socio-economic concept in India that aims to change this dynamic by providing financial services at affordable costs to the underprivileged, who might not otherwise be aware of or able to afford these services. As a whole, financial inclusion in the rural as well as financially backward cities is a win-win opportunity for everybody involved – the banks, and the left-out urban population. The policy makers have been focusing on financial inclusion of Indian rural and semi-rural areas primarily for three most important pressing needs. 1.Creating a platform for inculcating the habit to save money. 2.Plug gaps and leaks in public subsidies and welfare programmes. 3.Providing formal credit avenues. The big push towards financial inclusion in India has emanated from the Pradhan Mantri JanDhan Yojana (PMJDY) in August 2014 and the Jan Dhan Aadhaar Mobile (JAM). In India, RBI has initiated several measures to achieve greater financial inclusion, such as facilitating no frills accounts and GCC’s for small deposits and credit. 4. As 1.20 crore people decided to give up their subsidy, many people as much as 35 crore bogus cards were caught and  a lot of families got a much better life. 5. There was direct transfer of cash also happening because of this. 6. Financial inclusion has enabled 21.7 crore people to open their bank accounts over a span of 5-6 months with zero balance.                                                                       SANA PAYAK (64)                                                                          ADITI GODE (74)                                                                          ARADHYA GURAV (84)                                                                          ADITI SHAH (94)                                                                          ONKAR BANE (104)                                                                          DEVANSHIDOSHI(114)