Banking Regulation and Monetary Policy

Government can take all the above actions for regulation of banks in India.

According to the amendments of BR Act, 1966, the cooperative banks came under dual control of the RBI and the State Governments.

The main features of saving account in bank are as follows: -The main objective of saving account is to promote savings.

• There is no restriction on the number and amount of deposits. However, in India, mandatory PAN (Permanent Account Number) details are required to be furnished for doing cash transactions exceeding Rs. 50,000.
• Interest is prescribed by RBI. -Withdrawals are allowed subject to certain restrictions. -The money can be withdrawn either by cheque or withdrawal slip of the respective bank. -The rate of interest payable is very nominal on saving accounts. At present, it is between 4% and 6% p.a. in India. -Saving account is of continuing nature. There is no maximum period of holding. -A minimum amount has to be kept in saving account to keep it functioning.

Option 2 is the correct option as it does not state the truth.

Section 20 in The Reserve Bank of India Act, 1934: Obligation of the Bank to transact Government business — The Bank shall undertake to accept monies for account of the Central Government and to make payments up to the amount standing to the credit of 4 [its account], and to carry out 5, remittance and other banking operations, including the management of the public debt. Section 21A of RBI act talks about bank to transact Government business of States on agreement.

It can be fined up to Rs. 200000 and if offence continues, additional fine could be Rs. 50000.

The banks can sell security charged to it without court intervention under Indian Contract Act, if it is pledged, and under SARFAESI Act, if it is hypothecated or mortgaged.

Export credit up to 32 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, will be eligible as part of priority sector for foreign banks with less than 20 branches. For other banks, the incremental export credit over corresponding date of the preceding year will be reckoned upto 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.

Correct Answer: a and b only are correct

An NRO (Non-Resident Ordinary) savings account is where you can maintain and manage your income earned in India such as rent, dividends, pension etc. It can be jointly held with an Indian resident or NRI. 

The CAMELS rating system is a recognized international rating system that bank supervisory authorities use in order to rate financial institutions according to six factors represented by the acronym "CAMELS". Supervisory authorities assign each bank a score on a scale, and a rating of one is considered the best and the rating of five is considered the worst for each factor. The components of a bank's condition that are assessed: (C)apital adequacy (A)ssets (M)anagement Capability (E)arnings (L)iquidity (also called asset liability management) (S)ensitivity (sensitivity to market risk, especially interest rate risk)

When NRIs return with the intention to reside for uncertain period, their accounts will be designated as Resident Accounts. The funds in their NRE and FCNR accounts may be also converted into foreign currency and placed in Resident Foreign Currency (RFC) Accounts.

The first Regional Rural Banks (RRBs) were established in India on October 2, 1975, following the promulgation of an ordinance.

The Prevention of Money Laundering Act (PMLA) was enacted in 2002 to prevent money laundering and provide for confiscation of property derived from money laundering.

The Reserve Bank estimates the demand for bank notes on the basis of the growth rate of the economy. 

SHGs are self help groups and Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending.