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

The Reserve Bank prepares a draft scheme for amalgamating Yamuna Bank Ltd. with a transferee bank. Before the scheme goes to the Central Government for sanction, what must the Reserve Bank do under Section 45?

The Reserve Bank must send the draft scheme to the banking company, the transferee bank and any other bank concerned, inviting suggestions and objections within a period it specifies. It may then modify the draft before placing it before the Central Government for sanction.

  1. AObtain the consent of all shareholders by special resolution
  2. BPublish it in Parliament for a vote before preparing any modification
  3. CSend the draft to the banking company and the transferee bank for suggestions and objections within a specified periodCorrect
  4. DSend it only to the transferee bank, as the failing bank has no say

Explanation

Section 45(6)(a) requires a copy of the draft to be sent to the banking company, the transferee bank and any other bank concerned for suggestions and objections within a period the Reserve Bank specifies. The Reserve Bank may then modify it. Parliament receives copies only after sanction, under Section 45(11).

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