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

Kaveri Bank Ltd receives an application to transfer shares that would take the transferee to 6% of paid-up capital. RBI received the application on 1 March, called for further information on 20 March, and the applicant supplied it on 10 April (21 days later). Counting only the 90-day rule in Section 12B(6), by when must RBI decide, in terms of days of its own time?

RBI must decide within ninety days from receipt of the application, excluding the 21 days the applicant took to furnish the information it called for. Section 12B(6) proviso excludes that period from the computation.

  1. A90 days from 1 March including the 21 days taken by the applicant
  2. B90 days from 10 April only
  3. C90 days excluding the 21 days taken by the applicant to furnish informationCorrect
  4. D60 days from receipt of the application

Explanation

Section 12B(6) requires a decision within ninety days from receipt of the application, but the period taken by the applicant to furnish the information called for is excluded. So the 21 days are not counted; the clock effectively extends by 21 days. The first option wrongly counts them.

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