BANKING AFFAIRS

Detailed explanation-1: -The Banking Regulation Act has given the Reserve Bank of India the power to lay down instructions to the banks in India for audits. RBI, under Section 30 of the Act, can direct to perform a special audit of the company’s accounts if it is for the greater good of the public.

Detailed explanation-2: -Section 35 of the Banking Regulation Act vests powers in RBI for inspection of books of any banking company at any time.

Detailed explanation-3: -1.12 The RBI has the necessary powers to issue licence to a company for carrying on the business of banking. The RBI is vested with powers to issue guidelines on any issue relating to functioning of banks. This helps the Bank in laying down prudential guidelines for sound management of banks.

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: -Section 35A – Power of the Reserve Bank to give directions: In the public interest or in the interest of Banking policy RBI has powers to issue, modify or cancel as it deems fit, and the banking companies or the banking company, are bound to comply with such directions.