UPSC CSE Prelims
Question 79
The Reserve Bank of India regulates the commercial banks in matters of
- liquidity of assets
- branch expansion
- merger of banks
- winding-up of banks
Select the correct answer using the codes given below.
View correct answer and explanation
Correct answer: D
Correct Option: D
Explanation: The RBI regulates bank liquidity, authorises branch expansion, participates in bank-merger approval and exercises statutory powers affecting bank winding-up.
Statement/Pair-wise Analysis:
Statement/Item 1: Correct - RBI uses prudential and liquidity requirements to regulate bank assets.
Statement/Item 2: Correct - Branch opening and expansion are subject to banking regulation and RBI authorisation/frameworks.
Statement/Item 3: Correct - RBI has a statutory role in amalgamation and reconstruction of banking companies.
Statement/Item 4: Correct - RBI has supervisory/statutory roles in winding-up and liquidation proceedings for banks.
Option-wise Analysis:
A: Incorrect - excludes true items 2, 3.
B: Incorrect - excludes true item 1.
C: Incorrect - excludes true item 4.
D: Correct - selects all and only the accurate statements/pairs.
Review Note: Procedures and competent authorities for specific bank mergers/winding-up vary by banking legislation and have evolved; the statement is a broad summary of RBI powers.