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

Under the Reserve Bank of India Act, 1934, Chapter IIIB (regulating non-banking institutions receiving deposits) does not apply to certain entities. Which of the following would be covered by this exclusion?

A Regional Rural Bank is excluded. Section 45H of the RBI Act says Chapter IIIB does not apply to banking companies, the State Bank, corresponding new banks, subsidiary banks, Regional Rural Banks, co-operative banks and primary agricultural or primary credit societies; ordinary finance or manufacturing companies are not exempted.

  1. AA Regional Rural BankCorrect
  2. BAn unregistered private finance company accepting public deposits
  3. CA chit fund company which is not a banking company
  4. DA manufacturing company accepting loans from the public

Explanation

Section 45H excludes the State Bank, a banking company under Section 5 of the Banking Regulation Act, corresponding new banks, subsidiary banks, a Regional Rural Bank or co-operative bank, and primary agricultural or primary credit societies. A Regional Rural Bank is expressly listed, while the other three options are ordinary non-bank entities not named in the exclusion.

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