Skip to content

CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

Which of the following is a function of the Reserve Bank under section 36(1) of the Banking Regulation Act, 1949, as applied to banking companies?

The Reserve Bank may caution or prohibit banking companies, generally or individually, against entering into particular transactions or classes of transactions, and may give them advice. It does not fix dividends, approve individual loans or appoint auditors under this provision.

  1. ACaution or prohibit a banking company against entering into a particular transaction or class of transactionsCorrect
  2. BAppoint the statutory auditor of every banking company
  3. CFix the dividend payable by a banking company each year
  4. DApprove every individual loan sanctioned by a banking company

Explanation

Section 36(1)(a) lets the Reserve Bank caution or prohibit banking companies generally, or any one in particular, against any transaction or class of transactions, and give advice. The other options describe powers not listed in section 36(1).

Did you get it right without looking?

One question tells you little. A timed set on Regulatory Framework of Banks shows your real accuracy, how long you take and where you lose marks.

Practise Regulatory Framework of BanksFree diagnostic mock

More Regulatory Framework of Banks questions