UPSC Prelims 2024 · Question 89 of 97
UPSC Prelims 2024 question on Foreign Banks RBI Rules
- ExamUPSC CSE
- Year2024
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicBanking
- DifficultyHard
- TypeStatement
With reference to the rules/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements:
1. There is no minimum capital requirement for wholly owned banking subsidiaries in India.
2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.
Which of the statements given above is/are correct?
Show answer
Answer: B. 2 only
Verdict
Correct statements: 2 only → Option (b).
Statement by statement
Statement 1 – INCORRECT: RBI allows foreign banks to operate in India either through branch presence or they can set up a wholly owned subsidiary (WOS) with near national treatment. The initial minimum paid-up voting equity capital for a WOS shall be 5 billion (rupees). Hence statement 1 is not correct.
Statement 2 – CORRECT: The composition of the board of directors of WOS should meet the following requirements: not less than 50 per cent directors should be Indian nationals/NRIs/PIOs subject to the condition that one-third of the directors are Indian nationals resident in India. Hence statement 2 is correct.