Consider the following statements regarding Indian banking system 1 Public sector banks PSB have lar...........

Economic Affairs Types of Banks and Banking

Download Solution PDF

Consider the following statements regarding Indian banking system.

1. Public sector banks (PSB) have largest share in the banking system.

2. FDI+FII up to 74% allowed in private sector banks.

3. Each bank may decide its own Base Rate.

Which of the given above statement (s) is/ are correct?

1, 2 and 3

1 and 2

2 and 3

1 Only

छोटे Courses बड़े Results

Master Types of Banks and Banking

Prepare through Micro-courses

Try Now

Explanation:

All of the above statements are correct.

Public Sector Banks (PSBs) are a major type of bank in India, where a majority stake (i.e. more than 50%) is held by a government. The shares of these banks are listed on stock exchanges. There are a total of 18 Public Sector Banks alongside 1 state-owned Payments Bank in India.
Within the banking sector, foreign investment up to 74 per cent (including investment by FIIs/FPIs) is allowed in private sector banks. This limit stands at 20 per cent (FDI and portfolio investment) in the case of public sector banks.
Each bank can determine their base rate in accordance with the norms given by the RBI. According to the RBI, Base Rate shall include all those elements of the lending rates that are common across all categories of borrowers.
The base rate may differ from one bank to the other. But the following four components usually determine the base rate of particular bank.