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      Question

      Section 12A of the Banking Regulation Act, 1949 empowers

      the Reserve Bank to require a banking company to call a general meeting of shareholders to elect fresh directors in accordance with the Act. The general meeting must be called within what minimum period from the date of the Reserve Bank’s order?
      A One month Correct Answer Incorrect Answer
      B Six months Correct Answer Incorrect Answer
      C Forty-five days Correct Answer Incorrect Answer
      D Not less than two months from the date of the order (or such further time as the Reserve Bank may allow) Correct Answer Incorrect Answer
      E Fourteen days from the date of the order Correct Answer Incorrect Answer

      Solution

      Section 12A(1), inserted by the Banking Companies (Amendment) Act, 1956 (Act 95 of 1956), provides that the Reserve Bank may by order require any banking company to call a general meeting of its shareholders within such time, not less than two months from the date of the order, as may be specified in the order, or within such further time as the Reserve Bank may allow, to elect in accordance with the voting rights permissible under the Act fresh directors. The banking company is bound to comply with the order. Under sub-section (2), every director elected at such meeting holds office until the date to which his predecessor would have held office had the election not been directed. Sub-section (3) provides that any election duly held under this section shall not be called in question in any court.

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