General Awareness · Banking Financial Awareness

Regulatory Thresholds and Caps in India

860 Questions

Regulatory Thresholds and Caps in India refer to the statutory limits imposed on finance, taxation, and corporate governance. It covers sectoral caps, expenditure limits, and penalty thresholds defined by law. These questions are crucial for banking, accounting, and civil services exams.

Financial limitsTax deductionsCorporate regulationsElectoral thresholdsPenalties and fines

Regulatory Thresholds and Caps in India Questions

Multiple choice

For an Indian bank, as per Section-11 of Banking Regulation Act, the minimum paid-up capital and reserves should be

(a) Rs. 5 lac, if the bank is having business in more than one state (b) Rs. 10 lac, if business is in more than one state and includes Mumbai or Kolkata or both (c) Rs. 2 lac, if place of business is in the state and does not included Mumbai or Kolkata

  1. Only (a), (b) and (c)

  2. Only (a) and (b)

  3. Only (b) and (c)

  4. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For an Indian bank, as per Section-11 of Banking Regulation Act, the aggregate value of its paid-up capital and reserves shall not be less than: (i) if it has places of business in more than one state, Rs. 5 lac, and if any such place or places of business is or are situated in the city of Bombay or Kolkata or both, Rs. 10 lac. If it has all its places of business in one state, none of which is situated in the city of Bombay or Kolkata, Rs. 1 lac in respect of its principal place of business, plus Rs. 10 thousand in respect of each of its other places of busi­ness situated in the same district in which it has its principal place of business, plus Rs. 25 thousand in respect of each place of business situated elsewhere in the state, other­wise in the same district.

Multiple choice

Section 12 of Banking Regulation Act stipulates that the subscribed capital of a bank cannot be less than ___ % of its authorized capital and paid-up capital cannot be less than _____ % of the subscribed capital.

  1. 10%, 50%

  2. 25%, 25%

  3. 50%, 50%

  4. 50%, 10%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under section 12 of Banking Regulation Act, no banking company shall carry on business in India, unless it satisfies the condition that the subscribed capital of the company is not less than one-half of the authorised capital and the paid-up capital is not less than one-half of the subscribed capital. Thus, option 3 is the correct answer.

Multiple choice

If a banking company is found to be not complying with the requirement of Prevention of Money Laundering Act, 2002, the Director can impose a fine of

  1. Rs. 10000

  2. Rs. 20000

  3. minimum Rs. 10000 and maximum Rs. 1 lac

  4. minimum Rs. 10000 and maximum Rs. 5 lac
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If a banking company is found to be not complying with the requirement of PMLA Act 2002, the Director can impose a fine of minimum Rs. 10000 and maximum Rs. 5 lac.

Multiple choice

If any relative of the auditor holding interest on security whose face value exceeds ________, then the auditor is disqualified from being appointed as auditor.

  1. Rs. 10

  2. Rs. 100

  3. Rs. 1,000

  4. Rs. 10,000

  5. Rs. 1,00,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If any relative of the auditor holding interest on security whose face value exceeds Rs. 1,000, then the auditor is disqualified from being appointed as auditor as per section 141 of Companies Act, 2013.

Multiple choice

In India, 'No Claim Bonus' ranges from ______ to _______ on Own Damage premium.

  1. 20%, 30%

  2. 20%, 50%

  3. 10%, 50%

  4. 40%, 60%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

No Claim Bonus (NCB) is the benefit accrued to an insured for not making any claims during the previous policy period. As per current norms in India, it ranges from 20% on the Own Damage premium (and not on Liability premium) and progressively increases up to 50%.

Multiple choice

An agent can earn up to

  1. Rs. 20,000 per month

  2. Rs. 10,00,000 per month

  3. Rs. 1 crore per year

  4. unlimited amount based on his/her efforts
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Unlimited income potential is available for agents. There is no specified salary for agents. More efforts can lead to more income.

Multiple choice

What is the amount of initial corpus declared for Farmers Debt Relief Fund, whose implementation of debt waiver and debt relief is to be completed by June30, 2008?

  1. 18,000 cr

  2. 21,000 cr.

  3. 10,000 cr.

  4. 30,000 cr.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The initial corpus for the Farmers Debt Relief Fund was Rs 10,000 crore. The Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) was announced in the 2008 budget to help farmers facing distress, with implementation targeted for completion by June 30, 2008.

Multiple choice

Under section 32 of CPC, the maximum fine which can be imposed by the court for compelling the attendance of any person to whom a summons has been issued under section 30 is

  1. two thousand rupees

  2. three thousand rupees

  3. one thousand rupees

  4. five thousand rupees
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under Section 32 of CPC, the court can impose a maximum fine of five thousand rupees to compel attendance of a person who fails to appear despite a summons under Section 30. This is the statutory maximum prescribed for enforcing court attendance.