Multiple choice

A banking company cannot be acquired by Central Government under which of the following conditions?

  1. Bank failed on more than one occasion to comply with RBI direction u/s 21 and 35 of BR Act.

  2. Bank is being managed in a manner detrimental to interest of depositors.

  3. Acquisition is essential for safeguarding interest of the depositors.

  4. Acquisition will benefit the shareholders and gover<font size="2">nment</font> both.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank shall, if it has been directed by the Cen­tral Government to cause an inspection to be made, and may, in any other case, report to the Central Government on any inspec­tion made under this section, and the Central Government, if it is of opinion after considering the report that the affairs of the banking company are being conducted to the detriment of the interests of its depositors. Also, option 4 is not true as acquisitions often result in a number of social benefits. Thus, option 4 is the correct answer. 

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