📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      Under Section 45-IC of the RBI Act, 1934, every

      non-banking financial company must transfer to its reserve fund a sum not less than what percentage of its net profit every year before any dividend is declared?
      A Five per cent Correct Answer Incorrect Answer
      B Ten per cent Correct Answer Incorrect Answer
      C Fifteen per cent Correct Answer Incorrect Answer
      D Twenty-five per cent Correct Answer Incorrect Answer
      E Twenty per cent Correct Answer Incorrect Answer

      Solution

      Section 45-IC(1) requires every non-banking financial company to create a reserve fund and transfer to it a sum not less than twenty per cent of its net profit every year, as disclosed in the profit and loss account, before any dividend is declared. No appropriation from the reserve fund may be made except for purposes specified by the Bank, and such appropriation must be reported within twenty-one days. The mandated transfer is twenty per cent of net profit.

      Practice Next
      More Banking Related Laws Questions
      ask-question