With reference to the rule rules imposed by the Reserve Bank of India while treating foreign banks c...........

Indian Economic System(CSC) Money and banking

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?

This questions was previously asked in

UPSC CSP GS Previous Year Paper 2024

1 only

2 only

Both 1 and 2

Neither 1 nor 2

Neither 1 nor 2.

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.
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.