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CS Professional · Banking and Insurance - Laws and Practice · Banking Operations

Sahyadri Bank Ltd, a banking company, wants to shift its existing branch from one lane of Pune city to another locality within Pune city. Under the Banking Regulation Act, 1949, what is the position regarding RBI permission for this shift?

No prior RBI permission is needed. Section 23 restricts only a change of location otherwise than within the same city, town or village, so a shift between localities of Pune city is outside the restriction.

  1. APrior RBI permission is not required because the location is changing within the same cityCorrect
  2. BPrior RBI permission is required for every change of location, even within the same city
  3. CPrior permission of the Central Government is required instead of RBI
  4. DPrior RBI permission is required only if the new premises are owned by the bank

Explanation

Section 23(1)(a) requires prior RBI permission only where the location of an existing place of business is changed otherwise than within the same city, town or village. A shift within Pune city falls within the exception. Option B ignores the words 'otherwise than within the same city, town or village'.

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