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      Question

      Under Section 29(2)(a) of the Banking Regulation Act,

      1949, in the case of a banking company incorporated in India, the balance sheet and profit and loss account must be signed by the manager or principal officer of the company and by at least three directors, provided the company has more than three directors. If the company has not more than three directors, how many directors must sign?
      A At least one director Correct Answer Incorrect Answer
      B At least two directors Correct Answer Incorrect Answer
      C Any one director nominated by the Board Correct Answer Incorrect Answer
      D The chairman alone, as the sole authorised signatory Correct Answer Incorrect Answer
      E All the directors Correct Answer Incorrect Answer

      Solution

      Section 29(2)(a) provides that the balance sheet and profit and loss account of a banking company incorporated in India shall be signed by the manager or the principal officer of the company and, where there are more than three directors, by at least three of those directors, or where there are not more than three directors, by all the directors. The condition operates as a sliding rule: the threshold of “at least three” applies only when the board has more than three directors; where the board is three or fewer, every director must sign. This ensures appropriate accountability for the financial statements regardless of board size, and supplements the obligation to have the accounts audited under Section 30.

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