Section 6 of BRA : Section 6: Form Of Business In Which Banking Companies May Engage

Explanation using Example

Let's consider a hypothetical scenario where a local business, "ABC Electronics," is seeking to expand its operations. The company approaches "XYZ Bank" which is a banking company under the Banking Regulation Act, 1949.

XYZ Bank reviews the business plan of ABC Electronics and decides to provide a loan for the expansion. In this process, XYZ Bank is:

• Lending money to ABC Electronics, which is covered under Section 6(1)(a) of the Act as "the lending or advancing of money either upon or without security".
• As part of the loan agreement, XYZ Bank might also issue a letter of credit to ABC Electronics to facilitate the import of electronic components, which is also allowed under Section 6(1)(a) as "the granting and issuing of lett...

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