BANKING AFFAIRS

Detailed explanation-1: -With the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained the status of a limited company viz., IDBI Ltd. Subsequently, in September 2004, the Reserve Bank of India incorporated IDBI as a ‘scheduled bank’ under the RBI Act, 1934.

Detailed explanation-2: -The country’s largest insurer-LIC received approval from the Reserve Bank of India to raise its holding in private lender IndusInd Bank to 9.99 per cent from the existing 4.95 per cent.

Detailed explanation-3: -Minimum capital 200 crore, with a commitment to increase to Rs. 300 crore within three years. In order to meet with this requirement, all banks in private sector should have a net worth of Rs 300 crore at all times. Where the net worth declines to level below Rs 300 crore, it should be restored within reasonable time.

Detailed explanation-4: -Lender of Last Resort As a Banker to Banks, the Reserve Bank also acts as the ‘lender of the last resort’. It can come to the rescue of a bank that is solvent but faces temporary liquidity problems by supplying it with much needed liquidity when no one else is willing to extend credit to that bank.