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

Konkan Bank Ltd has an authorised capital of Rs 600 crore and a subscribed capital of Rs 400 crore. Its paid-up capital is Rs 180 crore. Which statement is correct under Section 12(1)(i) of the Banking Regulation Act, 1949?

The bank meets the subscribed capital condition but fails the paid-up condition. Subscribed Rs 400 crore exceeds half of Rs 600 crore authorised, but paid-up Rs 180 crore is below half of subscribed capital, which is Rs 200 crore.

  1. AIt satisfies both the subscribed and paid-up capital conditions
  2. BIt fails the subscribed capital condition but meets the paid-up condition
  3. CIt meets the subscribed capital condition but fails the paid-up conditionCorrect
  4. DIt fails both conditions

Explanation

Subscribed capital must be at least half of authorised: half of 600 is 300, and 400 meets it. Paid-up must be at least half of subscribed: half of 400 is 200, and 180 falls short. The error in the wrong options is measuring paid-up against authorised capital.

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