CS Professional · Banking and Insurance - Laws and Practice · Banking Operations
Konkan Bank Ltd plans to run a temporary counter for 20 days at a trade exhibition in Nashik, a city where it already has a branch, to give banking facilities to visitors. What is the legal position under Section 23 of the Banking Regulation Act, 1949?
No RBI permission is required. The proviso to Section 23(1) exempts a temporary place of business opened for up to one month at an exhibition, conference or mela in a city where the bank already has a place of business.
- ARBI permission is needed because any new place of business needs it
- BRBI permission is needed because the counter will receive deposits
- CNo RBI permission is needed, since a temporary place not exceeding one month is exempt in these circumstancesCorrect
- DRBI permission is needed only if the exhibition has more than one bank counter
Explanation
The proviso to Section 23(1) exempts opening, for a period not exceeding one month, a temporary place of business within a city, town or village or its environs where the bank already has a place of business, for an exhibition, conference, mela or like occasion. All conditions are met: 20 days, Nashik branch exists, exhibition. Option B is wrong as the exemption covers the temporary place regardless of deposits.
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