With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider…
With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements: 1. There is no minimum capital requirement for wholly owned banking subsidiaries in India. 2. 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?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Solution
RBI requires a minimum initial paid-up voting equity capital of Rs. 500 crore for a wholly-owned subsidiary (WOS) of a foreign bank — Statement 1 wrong. At least 50% of the directors of a WOS should be Indian nationals — Statement 2 correct.