AIR 2011 SUPREME COURT 1521 ::2011 CLC 360 (SC) ::(2011) 1 WLC(SC)CVL 218 ::(2010) 99 CorLA 160 ::(2011) 2 CivLJ 651 ::2010 (10) SCC 1 ::(2010) 10 Scale 378 ::(2011) 5 Cal HN 78 ::(2011) 1 BankCas 178 ::(2010) 3 Guj LH 494 ::(2011) 1 Mad LW 504 ::(2010) 8 Mad LJ 605

Supreme Court Of India

(From : Gujarat)*

Hon'ble Judge(s): S. H. Kapadia, Swatanter Kumar , JJ

(A) Banking Regulation Act (10 of 1949) , S.6, S.21, S.35A— Guidelines issued by RBI, dated 13-7-2005 - Banking business - Accepting deposits and lending by itself not enough to constitute "business of banking" - Assignment of debts by banks inter se - Not impermissible activity under Act - Guidelines by RBI dated 13-7-2005 issued as "restructuring measure" for solving issue of NPAS - Being banking policy, cannot be treated as "trading" - Guidelines are part of Credit Appraisal Mechanism - Not ultra vires the Act. O.J. Appeal No. 158 of 2007 in Company Application No. 489 of 2006, D/- 12-1-2009 (Guj), Reversed. Section 6(1)(n) enables a banking company to do all things as are incidental or conducive to promotion or advancement of the business of the company. S. 6(1) enables banking companies to carry on different types of businesses. Under S. 6(1), these different types of businesses are in addition to business of banking viz. core banking. The importance of the words "in addition to" in S. 6(1) is that even if different businesses under Clauses (a) to (o) are shut down, the company would still be a banking company as long as it is in the core banking of accepting deposits and lending so that its main income is from the spread or what is called as "interest income". Thus, the functions of the banking company can be broadly categorized into two....