Question

As per Section 5(b) of the Banking Regulation Act, 1949, 'banking' means -

Q: Answer-As per Section 5(b) of the Banking Regulation Act, 1949, 'banking' means -

Section 5b of the Banking Regulation Act, 1949 defines banking as accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. The three hallmarks are acceptance of deposits from the public, the purpose of lending or investment, and repayment on demand or otherwise coupled with withdrawal by cheque or draft. Section 8 separately prohibits a banking company from engaging in the buying or selling of goods, while accepting money only on fixed deposit terms or lending without accepting deposits would fall short of the statutory definition. Since a banking company under Section 5c is one which transacts the business of banking in India, the first option is correct.

A Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise

B Banking means the business of buying and selling of goods and merchandise for profit

C Banking means the borrowing of funds from other banks and financial institutions only

D Banking means the accepting of money from the public only on fixed deposit terms

E Banking means the lending of money against securities without accepting any deposits from the public

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