The Reserve Bank of India regulates the commercial banks in matters of
1. liquidity of assets
2. branch expansion
3. merger of banks
4. winding-up of banks
Select the correct answer using the codes given below.
1 and 4 only
Incorrect Answer2, 3 and 4 only
Incorrect Answer1, 2 and 3 only
Incorrect Answer1, 2, 3 and 4
Correct AnswerExplanation:
1, 2, 3 and 4
The Reserve Bank of India (RBI) regulates commercial banks in various aspects, including:
Liquidity of assets: The RBI regulates and monitors the liquidity position of commercial banks to ensure their financial stability.
Branch expansion: The RBI regulates the opening of new branches by commercial banks to maintain a balanced and controlled banking network.
Merger of banks: The RBI has the authority to approve or disapprove mergers between banks, ensuring that such activities are in the interest of the banking system and the economy.
Winding-up of banks: The RBI plays a crucial role in the supervision and regulation of the banking sector, including decisions related to the winding-up or closure of banks when necessary.
Therefore, all the given options (1, 2, 3, and 4) are correct.
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By: Kamal Kashyap