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Section 35-A of the Banking Regulation Act, 1949, cited in the lesson, gives the RBI a wide regulatory tool over banking companies. What does Section 35-A empower the RBI to do?
Answer & Solution
Correct answer: D.
1. Section 35-A of the BR Act, 1949 gives RBI a direction-issuing power.
2. The RBI may issue directions to banking companies in the public interest.
3. The power may be used to prevent affairs being conducted in a manner detrimental to depositors.
4. License withdrawal sits under Section 22, not 35-A; the other powers are not BR Act 35-A powers.
_Source: ICSI CS Executive Paper 7 (Economic, Business and Commercial Laws) — Lesson 1: Reserve Bank of India Act, 1934, pp. 8-21._
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