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      Question

      What is the necessary requirement for granting loans and

      advances to relatives of Directors?
      A Approval from the Reserve Bank of India Correct Answer Incorrect Answer
      B Approval from the Department of Banking Regulation Correct Answer Incorrect Answer
      C Approval from the Board of Directors Correct Answer Incorrect Answer
      D Approval from the shareholders of the banking company Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      As per RBI Circular loans and advances to relatives of the bank's Chairman/Managing Director or other Directors, as well as Directors of other banks and their relatives, Directors of Scheduled Co-operative Banks and their relatives, and Directors of Subsidiaries/Trustees of Mutual Funds/Venture Capital Funds set up by the financing banks or other banks, require prior approval from the Board.

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