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      Question

      Section 12 read with Section 12B governs voting rights

      and acquisition of shares in a banking company. Under Section 12B(6), the Reserve Bank is required to take a decision on an application for approval of acquisition of shares or voting rights within what period from the date of receipt of the application (excluding time taken by the applicant to furnish called-for information)?
      A Ninety days Correct Answer Incorrect Answer
      B Sixty days Correct Answer Incorrect Answer
      C One hundred and twenty days Correct Answer Incorrect Answer
      D Forty-five days Correct Answer Incorrect Answer
      E Thirty days Correct Answer Incorrect Answer

      Solution

      Section 12B(6) provides that the decision of the Reserve Bank on an application made under sub-section (1) shall be taken within a period of ninety days from the date of receipt of the application by the Reserve Bank. The proviso clarifies that in computing the ninety days, the period taken by the applicant for furnishing information called for by the Reserve Bank shall be excluded. The section also empowers the RBI, under sub-section (8), to restrict voting rights on poll to five per cent where a person acting in concert holding more than five per cent is found not fit and proper. This regime ensures that significant shareholders in banks are subject to fit-and-proper scrutiny.

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