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

The Reserve Bank cancels the licence of Sundaram Urban Bank Ltd under section 22 of the Banking Regulation Act, 1949, and communicates the decision on 1 March. By what date must the bank appeal to the Central Government (March has 31 days)?

The bank must appeal to the Central Government within thirty days from the date the cancellation decision is communicated to it, so by 31 March. The decision becomes final only after that appeal is decided or if no appeal is made.

  1. AWithin thirty days from the date the decision is communicated, i.e. by 31 MarchCorrect
  2. BWithin sixty days from the date of communication
  3. CWithin thirty days from the date the Reserve Bank passed its internal resolution
  4. DThere is no appeal; the Reserve Bank decision is final

Explanation

Section 22(5) allows an aggrieved banking company to appeal to the Central Government within thirty days from the date the decision is communicated. Thirty days from 1 March ends on 31 March. Sixty days is wrong, and finality attaches only where no appeal is preferred or after the Central Government decides.

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