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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Under section 45MBA(2) of the RBI Act, 1934, a scheme for an NBFC may include which of the following?

A scheme may reduce the pay and allowances of the chief executive officer, managing director, chairman or senior management of the NBFC. It may also cancel their shares or sell assets, and those affected are not entitled to any compensation.

  1. AReduction of pay and allowances of the managing director and senior managementCorrect
  2. BCompulsory increase in the pay of the chairman
  3. CTransfer of the NBFC's licence to the IFSCA
  4. DPayment of compensation to shareholders whose shares are cancelled

Explanation

Section 45MBA(2)(a) allows the scheme to reduce pay and allowances of the CEO, managing director, chairman or senior management. Under sub-section (3) those affected, including shareholders whose shares are cancelled, are not entitled to compensation, so option D is wrong.

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