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

Orient Continental Bank, a company incorporated outside India, applies for a licence to carry on banking business in India. Which additional matter, beyond the Section 22(3) conditions, may the RBI require to be satisfied about under Section 22(3A)?

For a company incorporated outside India, the RBI may additionally require satisfaction that the government or law of its home country does not discriminate in any way against banking companies registered in India. This is in Section 22(3A), alongside the public interest and compliance requirements.

  1. AThat its home country's government or law does not discriminate against banking companies registered in IndiaCorrect
  2. BThat its home country has a larger banking sector than India
  3. CThat at least half its directors are Indian residents
  4. DThat it has been operating in India through an agent for five years

Explanation

Section 22(3A) lets the RBI require satisfaction of the Section 22(3) conditions plus that banking business by the company in India will be in public interest, that the home country's government or law does not discriminate against Indian-registered banking companies, and that it complies with Act provisions applicable to foreign banking companies. The other options appear nowhere in the section.

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