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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

A non-banking institution, Aravali Leasing Ltd, holds deposits from many persons. The RBI requires it under Section 45K(6) to send its annual accounts to depositors. A depositor, Mr Iyer, held Rs 40,000 on the last day of the financial year; the RBI has specified Rs 50,000 as the threshold. Which statement best applies the provision?

Aravali need not send the accounts to Mr Iyer. Section 45K(6) requires accounts to go to depositors holding, on the last day of the accounting year, deposits higher than the sum specified by the RBI. Rs 40,000 is below Rs 50,000.

  1. AAravali must send Mr Iyer the accounts, as every depositor is entitled
  2. BAravali need not send them, since the deposit is not higher than the specified sumCorrect
  3. CAravali must send them only if Mr Iyer requests in writing
  4. DAravali must send them only if the deposit was held throughout the year

Explanation

Section 45K(6) applies if the RBI so requires, and covers persons from whom deposits are held, as on the last day of the accounting year, higher than the sum specified by the Bank. Rs 40,000 is below Rs 50,000, so Mr Iyer is not covered. The test is the balance on the last day, not a request or the whole year.

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