What is the shareholding pattern of a Regional Rural Bank in India?
- A.Central Government 50 per cent, sponsor bank 35 per cent, State Government 15 per cent
- B.Central Government 35 per cent, sponsor bank 50 per cent, State Government 15 per cent
- C.Central Government 50 per cent, State Government 35 per cent, sponsor bank 15 per cent
- D.NABARD 50 per cent, sponsor bank 35 per cent, State Government 15 per cent
Correct answer
Explanation
The correct answer is A. Under the Regional Rural Banks Act, 1976 the issued capital of an RRB is shared in the proportion of 50 per cent by the Central Government, 35 per cent by the sponsor commercial bank and 15 per cent by the State Government concerned. The sponsor bank also provides managerial help and training, which is why its share is the second largest.
Option B swaps the Centre and the sponsor bank, making the sponsor the largest shareholder, which is not the case. Option C swaps the sponsor bank and the State Government and leaves the sponsor with the smallest share, which would defeat the purpose of sponsorship. Option D puts NABARD in place of the Central Government; NABARD supervises and refinances RRBs but does not hold their share capital in this pattern. The order to memorise is simply 50, 35, 15, in the sequence Centre, sponsor, State.
Read the full article: Types of Banks in India: Classification, Functions and MCQs
Practice Questions
View allWhat is the primary function of a commercial bank?
- A.Issuing currency notes and coins
- B.Conducting monetary policy
- C.Granting loans and accepting deposits
- D.Regulating the money supply
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A commercial bank exists to gather savings from those who have a surplus and lend them to those who need funds, and it earns from the gap between the interest it pays depositors and the interest it charges borrowers.
Read the full explanation →Which among the following is a public sector bank?
- A.Axis Bank
- B.ICICI Bank
- C.Bank of Baroda
- D.Yes Bank
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It was founded in 1908 by Maharaja Sayajirao Gaekwad III, nationalised in the first round of July 1969, and the Government of India still holds the majority of its shares, which is what makes a bank a public sector bank.
Read the full explanation →SEWA (Self-Employed Women's Association) Bank, a cooperative bank in Gujarat, was launched in India in ______.
- A.1974
- B.1894
- C.1994
- D.1874
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Women of the Self-Employed Women's Association at Ahmedabad, who worked as vendors, headloaders and home-based workers, pooled their own share capital and registered a cooperative bank of their own in 1974 because ordinary banks would not deal with borrowers who had no collateral and no paperwork.
Read the full explanation →Which of the following functions of Reserve Bank of India are correct? I. Banker to Banks II. Currency Issuer
- A.Only I
- B.Neither I nor II
- C.Both I and II
- D.Only II
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The Reserve Bank is banker to banks: every scheduled bank keeps an account with it, holds its cash reserve ratio there, settles payments with other banks through those accounts and can borrow from it when short of funds.
Read the full explanation →Scheduled banks in India are those banks which are included in which schedule of which Act?
- A.First Schedule of the Banking Regulation Act, 1949
- B.Second Schedule of the Reserve Bank of India Act, 1934
- C.Second Schedule of the Banking Regulation Act, 1949
- D.Seventh Schedule of the Constitution
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A bank is placed in that Schedule once it has the prescribed paid-up capital and reserves and satisfies the Reserve Bank that its affairs are not conducted in a manner harmful to depositors.
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