Discussion
In India the Commercial Banks are given licence of operation by
Answer: D
Correct answer: Reserve Bank of India
Section 22 of the Banking Regulation Act, 1949 provides that no company may carry on banking business in India unless it holds a licence issued by the Reserve Bank of India. The RBI is therefore the licensing authority, and it may refuse a licence, or cancel one, if the bank cannot pay its depositors in full or is being run in a manner detrimental to their interests.
The Act is the source of the power, not the body exercising it; and neither the Government of India nor the Ministry of Finance grants banking licences, though policy on entry is settled in consultation with them.
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