CMA Final · Corporate and Economic Laws · Laws and Regulations related to Banking Sector
Aditi Finance Ltd., an NBFC, has a related entity, Aditi Realty Ltd., that is a group company within the meaning of section 45NAA of the RBI Act, 1934. Which statement correctly describes the Reserve Bank's power?
The Reserve Bank may at any time cause an inspection or audit of any group company of an NBFC and its books of account, notwithstanding anything contrary in the Companies Act, 2013. It is not limited to calling for statements, and no consent or majority holding is needed.
- AThe Bank may cause an inspection or audit of Aditi Realty Ltd. and its books of account, notwithstanding anything in the Companies Act, 2013Correct
- BThe Bank may inspect Aditi Realty Ltd. only after obtaining the consent of its board under the Companies Act, 2013
- CThe Bank may only call for statements about Aditi Realty Ltd. and cannot inspect its books
- DThe Bank may inspect Aditi Realty Ltd. only if Aditi Finance Ltd. holds a majority of its shares
Explanation
Section 45NAA(2) lets the Bank at any time cause an inspection or audit of any group company of an NBFC and its books of account, notwithstanding the Companies Act, 2013. Section 45NAA(1) separately allows it to call for statements, but that does not limit the inspection power. No board consent or majority holding is required.
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