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

Kaveri Co-operative Banking Co. Ltd. is a banking company. Its statutory auditor, Ms. Nisha Rao, is accused of taking a bribe to overlook irregularities. Which statement is correct under Section 46A of the Banking Regulation Act, 1949?

She is deemed a public servant. Section 46A names the auditor of a banking company among persons deemed public servants for Chapter IX of the Indian Penal Code, so her external professional position does not exempt her.

  1. AShe is deemed a public servant for Chapter IX of the IPC as an auditor of a banking companyCorrect
  2. BShe is not a public servant because auditors are external professionals
  3. CShe is a public servant only if she is an employee of the bank
  4. DShe is a public servant only while the RBI inspects the bank

Explanation

Section 46A expressly lists the auditor among those deemed public servants for Chapter IX of the IPC. Being external to the bank does not remove this status, so the claim that she is excluded as an outside professional is wrong.

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