Question
Under Section 20 of the Banking Regulation Act, 1949, a
banking company is strictly prohibited from granting any loan or advance on the security of:Solution
The Prohibition (Section 20(1)(a)): A banking company is explicitly forbidden from granting any loans or advances on the security of its own shares. The logic is simple: if a borrower defaults, the bank would be left holding its own shares as collateral. This would essentially mean the bank’s capital is being used to cover a loss, leading to "capital erosion" and potentially a collapse in its share price.
- Rohit invests Rs. 7,500 on compound interest at 10% p.a. (compounded annually) for 2 years and Rs. 6,400 on simple interest at 12% p.a. for 4 years. Find t...
A certain sum of money invested at a rate of 36% p.a. amounts to Rs. 30417.5 at the end of 15 months if the rate of interest is compounded 5 monthly. Fi...
An amount becomes four times of itself in 30 years at simple interest. Find the value of (7R − 40).
Vikas borrowed Rs. 10,000 from his friend at compound interest of 20% p.a., compounding annually. He added Rs. 'Z' to this money and lent the total sum ...
A sum of money, invested for 8 years on 5% per annum simple interest, amounted to ₹287 on maturity.
What was the sun invested in?
Atul has Rs.250 with him. He invested 30% of the amount at 4% p.a. for 6 years and rest at 20% p.a. for 5 years. Find the sum of simple interests receiv...
A man invested Rs. 16,000 at simple interest of 'x%' p.a. and received Rs. 32,000 after 2 years. If he had invested Rs. 21,000 at simple interest of 'x%...
A vessel contains 120 liters of a mixture of milk and water, with 75% of it being milk. If 30 liters of this mixture is replaced by 30 liters of water, ...
Amit placed an amount 'p' in Fund 'X' that offers a 10% compound interest per annum and also invested Rs. (p + 1000) in Fund 'Y' that offers a 15% simpl...
- A man invested Rs. 35,000 in two schemes. One scheme offers simple interest of 6% p.a., while the other scheme offers simple interest of 10% p.a. If the to...
Relevant for Exams:
