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CS Professional · Banking and Insurance - Laws and Practice · Control over Organization of Banks

A Regional Rural Bank's board is reviewing which Banking Regulation Act provisions bind it. Which statement correctly reflects Section 51(1)?

Section 51(1) applies the sections it lists to a Regional Rural Bank, so far as may be, in the same way they apply to banking companies. The application is selective, covering only the listed sections, and is without prejudice to other enactments.

  1. ASection 51 applies the listed sections to a Regional Rural Bank, so far as may be, as they apply to banking companiesCorrect
  2. BThe Act cannot apply to a Regional Rural Bank because it is not a company
  3. COnly section 18 on cash reserve is applied to such banks
  4. DAll provisions of the Act apply without any qualification

Explanation

Section 51(1) applies the listed sections, so far as may be, to the State Bank of India, any corresponding new bank, a Regional Rural Bank or any subsidiary bank as they apply to banking companies. It is selective, not wholesale, and not limited to one section.

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