Banking · Banking Regulation Act
Section 11 of the Banking Regulation Act 1949 stipulates the requirements for the minimum paid-up capital and reserves for banking companies. For a foreign bank operating in India through branches, what is the statutory minimum amount of paid-up capital and reserves that must be kept deposited with the Reserve Bank of India as per the Act?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A minimum of 500 Crore as per the licensing conditions for new banks, which applies to all foreign banks irrespective of their global presence.
- 2An amount of 20 Lakh, which must be kept in the form of cash or unencumbered approved securities.✓
- 3A minimum of 15 Lakh if the bank has a place of business in Mumbai or Kolkata.
- 4An amount of 5 Lakh or 10 Lakh depending on whether the bank has a place of business in more than one state.
Correct answer
An amount of 20 Lakh, which must be kept in the form of cash or unencumbered approved securities.
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