RBI has issued master direction on merger of private sector banks

Q.  RBI has issued a master direction on the merger of which banks?
- Published on 22 Apr 16

a. PSU banks
b. Private sector banks
c. Development banks
d. Syndicate Banks

ANSWER: Private sector banks
 
RBI came out with a master direction for merger of private sector banks and between NBFCs and banks. Another master direction indicated that a compilation which consolidates instructions on rules and regulations framed by the RBI under numerous acts including banking issues and foreign exchange transactions.
  • Scope of the master direction on the merger will cover the amalgamation of 2 banking companies and amalgamation of NBFC with banking company.
  • In these cases, the voluntary amalgamation will become effective following approval from RBI.
  • According to the direction, the decision of the amalgamation shall be approved by respective boards by a 2/3rd majority and not just members present and voting.

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