BANKING GENERAL KNOWLEDGE
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Question
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According to the guidelines, the Reserve Bank of India will consider proposals for merger and amalgamation of urban cooperative banks when
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the net worth of the acquired bank is positive and the acquirer bank assures to protect entire deposits of all the depositors of the acquired bank
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the net worth of acquired bank is negative, but the acquirer bank on its own assures to protect deposits of all the depositors of the acquired bank
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the net worth of the acquired bank is negative and the acquirer bank assures to protect the deposits of all the depositors with financial support from the State Government extended up front as part of the process of merger
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All of the above
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Explanation:
Detailed explanation-1: -The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934.
Detailed explanation-2: -India Code: Section Details. [44A. Procedure for amalgamation of banking companies.
Detailed explanation-3: -1. Section 44A of the Banking Regulation Act, 1949 also requires that after the scheme of amalgamation is approved by the requisite majority of shareholders in accordance with the provisions of the Section, it shall be submitted to the Reserve Bank for sanction. 2.2.
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