Skip to content

CS Professional · Banking and Insurance - Laws and Practice · Overview of Indian Banking System

A law student describes the legal character of the Reserve Bank of India. Which statement is consistent with Section 3 of the Reserve Bank of India Act, 1934?

Section 3 makes the RBI a body corporate named the Reserve Bank of India, with perpetual succession and a common seal, able to sue and be sued in that name. It was constituted to manage currency and carry on banking business under the Act.

  1. AIt is a body corporate with perpetual succession and a common seal, and can sue and be sued in its nameCorrect
  2. BIt is an unincorporated department of the Central Government without separate legal identity
  3. CIt is a company that must be wound up when its share capital is exhausted
  4. DIt is a statutory body that can sue but cannot be sued

Explanation

Section 3(2) states that the Bank is a body corporate by the name Reserve Bank of India, having perpetual succession and a common seal, and can sue and be sued by that name. Its purposes include taking over currency management and carrying on banking business under the Act.

Did you get it right without looking?

One question tells you little. A timed set on Overview of Indian Banking System shows your real accuracy, how long you take and where you lose marks.

Practise Overview of Indian Banking SystemFree diagnostic mock

More Overview of Indian Banking System questions