BANKING AFFAIRS

Detailed explanation-1: -The Bank also maintains Current accounts in the “Other Deposit Ledger’ of local bodies, Quasi-Government Institutions, Foreign Central Banks, International Organisations, Indian and Foreign Financial Institutions, Mutual Funds, Primary Dealers, Satellite Dealers etc.

Detailed explanation-2: -1 Borrowers can open current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the aggregate exposure of the banking system to that borrower.

Detailed explanation-3: -It is the responsibility of each bank maintaining current account with the Reserve Bank to ensure that sufficient balance is available in the account to avoid defaults in payments and settlements.

Detailed explanation-4: -The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks. These powers are exercised through on-site inspection and off site surveillance.

Detailed explanation-5: -Further, as per Section 21 of the said Act, RBI has the right to transact Government business of the Union in India. State Government transactions are carried out by RBI in terms of the agreement entered into with the State Governments in terms of section 21 A of the Act.