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CMA Final · Corporate and Economic Laws · Laws and Regulations related to Banking Sector

Which of the following is a matter on which the Central Board of the RBI may make regulations under section 58(2) of the RBI Act, 1934, and which statement about such regulations is also correct?

Regulation of fund transfer through electronic means between banks is a listed matter under section 58(2)(pp). Regulations made by the Central Board must be forwarded to the Central Government and laid before each House of Parliament for a total of thirty days, with prior Central Government sanction.

  1. ARegulation of fund transfer through electronic means between banks; such regulations must be laid before Parliament for a total of thirty daysCorrect
  2. BFixing the repo rate; such regulations need no Central Government sanction
  3. CLicensing of new banking companies; such regulations take effect only from the date of notification
  4. DAppointing the Governor; such regulations are not placed before Parliament

Explanation

Section 58(2)(pp) covers regulation of electronic fund transfers between banks and certain financial institutions. Under 58(4) every regulation is forwarded to the Central Government and laid before each House for a total of thirty days. The other options name matters not in section 58(2) or misstate the procedure; regulations also need prior Central Government sanction under 58(1).

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