Q. With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements:
1. There is no minimum capital requirement for wholly owned banking subsidiaries in India.
2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.
Which of the statements given above is/are correct?
Answer: D
Notes:
Exp) Option d is the correct answer.
Statement 1 is incorrect: The RBI does have a minimum capital requirement for wholly owned banking subsidiaries set at ₹5 billion. This applies to both new foreign banks setting up a subsidiary in India and existing foreign banks with a branch presence that want to convert to a wholly owned subsidiary.
Statement 2 is incorrect: As per the Scheme for setting up of wholly owned subsidiaries by foreign banks in India: not less than 50 per cent directors should be Indian nationals/NRIs/PIOs subject to the condition that one-third of the directors are Indian nationals resident in India. PIOs are not Indian nationals.
Source: https://m.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2758
