Question

The Reserve Bank of India regulates the commercial banks in matters of

1. liquidity of assets

2. branch expansion

3. merger of banks

4. winding-up of banks

Select the correct answer using the codes given below.

(a) 1 and 4 only (b) 2, 3 and 4 only (c) 1, 2 and 3 only (d) 1, 2, 3 and 4

Answer 1

(d) The Reserve Bank of India is the main monetary authority of the country and beside that, in its capacity as the central bank, acts as the bank of the national and state governments. Some times it happens that some of the banks closedown due to non recovery of loans or such other issues. In such conditions people have to suffer the loss. For this reason there is provision for winding up of the banking company under the Banking Regulation Act, 1949. The power of winding up of Bank lies in the hand of Reserve Bank of India.