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      Question

      To be included in the Second Schedule under Section

      42(6) of the RBI Act, 1934, a bank must have a paid-up capital and reserves of an aggregate value of not less than what amount?
      A One lakh of rupees Correct Answer Incorrect Answer
      B Two lakhs of rupees Correct Answer Incorrect Answer
      C Ten lakhs of rupees Correct Answer Incorrect Answer
      D Five lakhs of rupees Correct Answer Incorrect Answer
      E Twenty-five lakhs of rupees Correct Answer Incorrect Answer

      Solution

      Section 42(6)(a)(i) requires that to be included in the Second Schedule, a bank carrying on the business of banking in India must have a paid-up capital and reserve of an aggregate value of not less than five lakhs of rupees, and must satisfy the Bank that its affairs are not conducted in a manner detrimental to depositors. Banks whose value falls below five lakhs may be excluded. The correct threshold is five lakhs of rupees.

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