UPSC CSE Prelims
Question 13
With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements :
- There is no minimum capital requirement for wholly owned banking subsidiaries in India.
- For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.
Which of the statements given above is/are correct ?
View correct answer and explanation
Correct answer: D
Correct Option: D (Neither 1 nor 2)
Explanation: The RBI requires a minimum ₹500-crore capital for foreign-bank wholly owned subsidiaries. Its board rule covers Indian nationals, NRIs and PIOs collectively, not only Indian nationals.
Statement / Pair / Item-wise Analysis:
1. Incorrect/False - A WOS must meet an initial minimum paid-up voting equity capital of ₹500 crore.
2. Incorrect/False - The 50% director rule includes Indian nationals/NRIs/PIOs, plus a separate one-third resident-Indian condition.
Option-wise Analysis:
A. Incorrect-incorrectly includes 1 (A WOS must meet an initial minimum paid-up voting equity capital of ₹500 crore.).
B. Incorrect-incorrectly includes 2 (The 50% director rule includes Indian nationals/NRIs/PIOs, plus a separate one-third resident-Indian condition.).
C. Incorrect-incorrectly includes 1 (A WOS must meet an initial minimum paid-up voting equity capital of ₹500 crore.); incorrectly includes 2 (The 50% director rule includes Indian nationals/NRIs/PIOs, plus a separate one-third resident-Indian condition.).
D. Correct-includes precisely the true/correct statements or pairs identified above.
Review note: The 50% wording is nuanced: some coaching keys mark statement 2 true, while RBI wording supports the supplied D answer.