CONTROL OVER ORGANISATION OF BANKS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
Which authority grants a licence to a banking company to carry on banking business in India?
The Reserve Bank of India (RBI) grants a licence under Section 22 of the Banking Regulation Act, 1949. No banking company can commence or carry on banking business in India without such a licence.
What is the minimum number of directors required on the Board of a banking company under the Banking Regulation Act?
At least three directors must be on the Board.
What is the minimum paid-up capital requirement for a new bank seeking a licence from RBI to operate in India?
RBI sets the minimum paid-up capital requirement as part of its licensing conditions. As per the Banking Regulation Act and RBI guidelines, it must be adequate to ensure the bank's viability and depositor protection.
Under Section 12 of the Banking Regulation Act, what is the maximum voting right a shareholder can exercise in a private sector bank?
Maximum voting right is capped at 26 percent.
Under which section of the Banking Regulation Act, 1949 does RBI have the power to cancel a banking licence?
Section 22(4) of the Banking Regulation Act, 1949 empowers RBI to cancel a licence granted to a banking company if it fails to comply with the conditions of the licence or ceases to carry on banking business.
What is the lock-in period for promoters' minimum shareholding in a new private sector bank?
Promoters must hold shares for at least five years.
What does the term 'place of business' mean under the Banking Regulation Act in the context of branch licensing?
A 'place of business' includes any branch, sub-office, pay office, or other place where banking business is transacted. Opening, shifting, or closing any place of business requires prior approval of RBI under Section 23.
Under which section of the Banking Regulation Act does RBI have power to give directions to banks?
RBI issues directions to banks under Section 35A.
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