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      Question

      Section 53 of the Banking Regulation Act, 1949 empowers

      a specified authority to exempt any banking company or institution or class of banking companies from any or all provisions of the Act, either generally or for a specified period. This power is exercised by:
      A The Reserve Bank, on the recommendation of the Central Government Correct Answer Incorrect Answer
      B The High Court, upon an application by the Reserve Bank Correct Answer Incorrect Answer
      C The Ministry of Finance, by administrative notification Correct Answer Incorrect Answer
      D The Securities and Exchange Board of India, where the banking company is listed Correct Answer Incorrect Answer
      E The Central Government, on the recommendation of the Reserve Bank, by notification in the Official Gazette Correct Answer Incorrect Answer

      Solution

      Section 53(1) provides that the Central Government may, on the recommendation of the Reserve Bank, declare by notification in the Official Gazette that any or all of the provisions of this Act shall not apply to any banking company or institution or to any class of banking companies, either generally or for such period as may be specified. The power thus rests with the Central Government acting on the RBI’s recommendation, ensuring both executive and regulatory authorisation. Section 53(2), inserted after the Special Economic Zones Act, 2005, requires that for exemptions relating to banking companies or institutions in Special Economic Zones, a draft notification must be laid before each House of Parliament for thirty days and cannot be issued if both Houses agree to disapprove it.

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