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

The RBI cancels the licence of Kaveri Urban Banking Co. Ltd by an order communicated to it on 5 March. The company wishes to challenge the decision. Which statement is correct?

The company may appeal to the Central Government within thirty days from the date the cancellation decision is communicated to it. The decision on appeal is final, and the Reserve Bank's decision is final only if no appeal is preferred.

  1. AIt may appeal to the Central Government within thirty days from the date the decision is communicated to itCorrect
  2. BIt may appeal to the High Court within sixty days from 5 March
  3. CIt may appeal to the Reserve Bank Governor within ninety days
  4. DIt has no remedy because the decision is always final

Explanation

Section 22(5) gives a banking company aggrieved by cancellation thirty days from communication of the decision to appeal to the Central Government. The Central Government's decision is then final. The 'no remedy' option is wrong because finality arises only after an appeal or when none is filed.

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