BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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2% of demand liabilities and 5% of time liabilities
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5% of demand liabilities and 2% of time liabilities
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5% of demand liabilities and 5% of time liabilities
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5% of demand liabilities and 5% of time liabilities
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Detailed explanation-1: -The major provisions are such as Payment of Commission, Brokerage, Prohibition of Trading, Capital Structure, Non-Banking Assets, Minimum Capital and reserves, etc.
Detailed explanation-2: -Under Section 17, every banking company incorporated in India is required to transfer at least 25% of its current profit to its reserve fund. It is known as statutory reserve. Only those banks get exemptions from this legal condition whose reserve along with share premium if any become equal to paid up capital.
Detailed explanation-3: -(i) “Banking” does not include other commercial activities of the banking institution; Rustom Cavasjee Cooper v. Union of India, AIR 1970 SC 564. (ii) The essential characteristic of banking is the ability to receive money by way of deposit from the customers and also to honour the customers’ cheque.
Detailed explanation-4: -Section 36 mentions the powers of RBI. The Reserve Bank may prohibit banking companies from entering into a particular transaction and can advise the banking company. It can also assist the banking company by granting loans or advances under Section 18.