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

While considering the licence application of Kaveri Finserv Ltd., the Reserve Bank inspects its books. Which of the following is among the conditions Section 22(3) allows the RBI to require to be satisfied before granting a licence?

The RBI may require to be satisfied that the company has adequate capital structure and earning prospects, as provided in Section 22(3)(d). Branch targets, promoter citizenship and dividend history are not listed statutory conditions for granting a licence.

  1. AThat the company has at least 100 branches planned in its first year
  2. BThat the company has adequate capital structure and earning prospectsCorrect
  3. CThat the company's promoters are all resident Indian citizens
  4. DThat the company has paid a dividend for three consecutive years

Explanation

Section 22(3)(d) lists adequate capital structure and earning prospects. The other options (branch count, citizenship of promoters, dividend history) do not appear among the listed conditions.

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