Multiple Choice Questions on In terms of the Section 45ID of the RBI Act 1934 the Bank has the power to remove the directors of a........... for IBPS (PO/SO) Preparation

In terms of the Section 45ID of the RBI Act 1934 the Bank has the power to remove the directors of a...........

Professional Legal Knowledge RBI Act

In terms of the Section 45ID of the RBI Act, 1934, the Bank has the power to remove the directors of an NBFC, if the businesses of such NBFC are conducted in a manner detrimental to the interest of the depositors or creditors or financial stability or for securing the proper management. The director removed by the Bank should not take part in the management of any NBFC for the period of not exceeding __________ years.

Two years

Four years

Five years

Three years

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Explanation:

The correct option is: 3 (Five years).

According to Section 45ID of the RBI Act, 1934, the Reserve Bank of India (RBI) has the authority to remove the directors of a Non-Banking Financial Company (NBFC) if the business is conducted in a manner that is detrimental to the interests of depositors, creditors, or financial stability, or for ensuring proper management. Once removed, the director is prohibited from taking part in the management of any NBFC for a period not exceeding five years. This measure helps ensure that NBFCs operate with integrity and maintain financial stability.