Multiple choice

Which of the following statements is incorrect?

  1. Only scheduled banks are to maintain cash reserve u/s 42 of RBI Act.

  2. Non-scheduled banks are to maintain cash reserve u/s 18 of BR Act.

  3. Additional cash reserve can be prescribed to be kept by the Central Government.

  4. Interest is required to paid by RBI on cash balances maintained with it u/s 24 of BR Act.

  5. Banking companies are required to maintain reserve fund u/s 17 of BR Act.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In view of the amendment carried out to RBI Act, 1934, omitting sub-section (1B) of Section 42, the Reserve Bank does not pay any interest on the CRR balances maintained by SCBs with effect from the fortnight beginning March 31, 2007.

Keep practicing — related questions