Development Regulation and Supervision and Recent Performance of Scheduled Commercial Banks
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 107 rapid-fire Q&A cards.
When did RBI first receive supervisory powers over banking companies?
1940, on restricted basis for inspection in consultation with Government of India.
What did the Banking Regulation Act, 1949 mandate before RBI granted a bank licence?
RBI must inspect bank's books and methods to ensure depositors could be paid in full.
When did RBI announce systematic periodical inspections of all banking companies?
July 1949; inspections commenced March 1950 to cover all banks irrespective of size.
What shift occurred in RBI supervision during the 1950s?
From quantitative assessment of capital/reserves to qualitative appraisal of financial position and management.
Name three common defects flagged in early RBI bank inspections (1950s).
Defective advances, weak management, inadequate branch supervision, low reserves, low SLR-equivalent investments.
When and why was the Banking Regulation Act, 1949 amended?
January 1957: strengthened RBI's powers over director/MD/CEO appointments and policy directives.
Which bank collapses in 1960 triggered RBI to acquire new enforcement powers?
Palai Central Bank and Laxmi Commercial Bank; led to compulsory amalgamations and de-licensing.
What concept did RBI introduce in 1967 to guide credit deployment?
'Social control' — to give banking system directional sense for credit allocation.
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