The first thing that comes to mind with the above words is the legal advisor of bank. However, other banking lawyers also play their part along with legal advisor in bank for disputes related to banking laws. Where there is a legal dispute, lawyers come to the rescue of their respective clients. Matters related to Indian Contract Act, 1872, Insolvency and Bankruptcy Code, 2016, Reserve Bank of India Act, 1934, etc. are dealt with by banking lawyers in India. A banking lawyer represents his clients who are accused or victim of another and the matter involves application of banking or financial laws. The legal advisor of bank advises on legal frameworks and prepares documentation as well, and so do banking lawyers for private clients.
Banking Laws in India
Banking laws aim at providing a legal framework to the Banking sector in India. Since banks are indulged in the financial business, the banking laws regulate and ensure smooth functioning of banks. Any malfunction may result in massive monetary repercussions for the banks.
Major laws applicable to Banking Sector
- Banking Regulation Act, 1949
- Banking Companies (Acquisition and Transfer of Understandings) Act, 1970
- Finance Act, 2011
- Reserve Bank of India Act, 1934
- Negotiable Instruments Act, 1881
- Foreign Exchange Management Act, 1999
- The Recovery of Debts due to Banks and Financial Institutions Act, 1993
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Background of Banking Laws
It is important for banking lawyers in India to understand the base of present day banking laws. The present day system of banking has its roots in the eighteenth century with Bank of Hindostan established in the year 1770. Thereafter originated State Bank of India as Bank of Calcutta in 1806. SBI was the amalgamation of 3 banks subsidized by the pre independence administration government, to be specific Bank of Bengal, Bank of Madras and Bank of Bombay. It established the framework of present day banking in India post-independence in 1955. The banking sector got its roof through the Reserve Bank of India Act, 1934.
RBI is a central bank and also a regulatory body for the banking sector in India. RBI has time and again designed certain guidelines to facilitate customer experience in banking. The Banking Regulation Act 1949 empowers RBI to license banks, direct shareholding and vote shareholders privileges, oversee boards and administration arrangement, manage bank operations, enforce punishments, etc.
Banks are the service providers for accepting deposits and keeping them safe also for providing loans to the borrowers. Many times it happens that a bank can default in providing the necessary services or can charge interest much more than agreed. It is also seen that when the loans go bad or turn into NPA, banking lawyers are needed by both bank and the customer of the bank.
FAQs related to Banking lawyers
Q- What does a banking lawyer do?
A- A legal advisor in bank is responsible for legal documentation regarding policies, transactions, compliances, etc. The legal advisor for banks also represents before court of law in case of dispute against other banking lawyers representing their clients. A banking lawyer also advises its clients on issues related to banking services and loans that may arise between the bank and the customer. Very often banking lawyers help the customers in disputes related to loan agreements and restructuring of loans through application or mediation.
Q- How to find the lawyer for banking issues?
A- If I have some legal trouble related to banking laws, I should start my search for banking lawyers near me. For example banking lawyers in Delhi may help legal matters with jurisdiction in Delhi. A banking lawyer is responsible for representing his/ her client before the respective court or tribunal, or even advising their clients. On the other side, there are legal advisor for banks as well who use the existing laws for compliances and saving the bank interests.
Q- How can I become a law officer in a bank?
A- To become banking lawyers or legal advisors of banks one has to complete graduation in law. There exists a bank personnel recruitment owned by the government known as Institute of Banking Personnel Selection (IBPS) which conducts banking exams. Government banks usually recruit banking lawyers on the basis of IBPS examination. Some private banks also recruit on the basis of this exam.
Q- What is banking lawyer salary in India?
A- LLB jobs in bank vary based on qualifications, salary, experience, etc. Hence, there is no perfect number to describe banking lawyer salary in India. Location also matters for financial disputes, hence, banking lawyers in Mumbai might be earning more as compared to the banking lawyer in Rohtak.
Q- Why do banks hire lawyers?
A- Banking lawyers are required for the legal documentation as well as representation of banks in courts in case of banking disputes affecting banking law provisions.