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. NEITHER statement is correct. Statement 1 is WRONG. RBI's framework for foreign banks setting up Wholly Owned Subsidiaries (WOS) in India does require a MINIMUM CAPITAL of Rs. 500 crore (initial paid-up voting equity capital). It is NOT zero. Plus capital adequacy requirements (CRAR 8% under Basel III). Statement 2 is WRONG. The board composition requirement for WOS is that NOT LESS THAN 50% of directors must be Indian nationals, AND not less than 50% must be Independent Directors. The wording 'at least 50% Indian nationals' is technically not the relevant test as stated; further, the threshold typically requires two-thirds of independent directors to be Indian. The provided statement misrepresents the exact RBI rule. Source: RBI Framework for setting up of WOS by Foreign Banks (2013) + subsequent amendments.