Skip to content

CS Professional · Banking and Insurance - Laws and Practice · Overview of Indian Banking System

The RBI cancels the licence of Konkan Credit Bank Ltd on 1 March because it ceased to meet the capital adequacy condition referred to in Section 22(3). The bank wishes to challenge the decision. What does the Act provide?

The bank may appeal to the Central Government within thirty days from the date the cancellation decision is communicated to it. The Central Government's decision, or RBI's if no appeal is made, is then final under Section 22.

  1. AThe bank may appeal to the Central Government within thirty days from the date the decision is communicated to itCorrect
  2. BThe bank may appeal to the Central Government within sixty days from the date of the RBI's decision
  3. CThe bank may appeal to the High Court within thirty days of communication
  4. DThe RBI's decision is final and no appeal is allowed

Explanation

Section 22(5) allows a banking company aggrieved by a licence cancellation to appeal to the Central Government within thirty days from the date the decision is communicated. Option B uses the wrong period and wrong starting date; option D ignores the appeal route, since finality attaches only where no appeal is preferred.

Did you get it right without looking?

One question tells you little. A timed set on Overview of Indian Banking System shows your real accuracy, how long you take and where you lose marks.

Practise Overview of Indian Banking SystemFree diagnostic mock

More Overview of Indian Banking System questions