BNK · S01Introduction to ‘Banking’, Modern Banking System, Key Financial terms, Types of Banks & Financial InstitutionsAsked in 7 of 7 papers (Jun ’22, Dec ’22, Jun ’23, Dec ’23, Jun ’24, Jan ’25, Jun ’25)
Under the Banking Regulation Act, 1949: FinCo Ltd invites the public to place money with it, promises repayment on demand, permits withdrawal by draft, and invests the pooled funds. It has never obtained an RBI banking licence. What is the best legal conclusion?
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AFinCo is only an investment company because it invests rather than lends the pooled funds
BFinCo avoids banking regulation because repayment is on demand rather than at a fixed maturity
CFinCo may operate without a licence until RBI proves that one depositor suffered loss
DFinCo is carrying on banking business and cannot lawfully continue it without an RBI licence
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