General Studies · RBI Master Directions
Para-Banking activities allow banks to diversify their income streams beyond traditional lending and deposit-taking. As per the RBI Master Direction on Para-Banking, which of the following statements is correct regarding classified activities and restrictions?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Banks are permitted to invest up to 100 percent of their net worth into Real Estate Mutual Funds as part of Para-Banking portfolios.
- 2Underwriting of public issues of shares is completely prohibited for all commercial banks in India to eliminate market risk.
- 3Banks can undertake insurance brokerage business through a subsidiary or departmentally, provided they strictly avoid anti-tying practices.✓
- 4Accepting demand deposits from the general public is classified as the primary Para-Banking activity of a Commercial Bank.
Correct answer
Banks can undertake insurance brokerage business through a subsidiary or departmentally, provided they strictly avoid anti-tying practices.
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