IAS Economy Practice Question . 2
In India, the banks which are constituted as companies are governed by the Banking Regulation Act, 1949 and the Companies Act, 1956. Which among the following banks come under this definition?
1. Public Sector Banks
2. Private Banks
3. Foreign Bank Offices
4. Cooperative Banks
Choose the correct option:
[A]Only 1
[B]1 & 2
[C]2 & 3
[D]2, 3 & 4
Answer: 2 & 3
Banks which are constituted as companies are governed by the Banking Regulation Act, 1949 and the Companies Act, 1956. These include the private sector banks and foreign bank offices. The resolution regimes for public sector banks, viz., State Bank of India, its subsidiaries, nationalized banks and regional rural banks, which have been created by separate acts of Parliament, are contained in their respective statutes. In the case of co-operative banks, the registrars of co-operatives at the central or state-level are responsible for oversight of some aspects of their functioning, including their winding-up and restructuring. Deposit insurance is covered separately in the DICGC Act, but is not integrated with banking laws. All in all, the legal framework governing bank resolution is spread all over, making the framework complex , confusing and often times non- transparent
