Economics · Banking Regulation
To maintain an arm's length relationship between a parent bank and its subsidiary, which of the following is required under RBI guidelines?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Parent can grant unsecured advances to subsidiary without RBI approval.
- 2Subsidiary may access parent bank customers’ accounts online.
- 3Subsidiary must seek RBI prior approval before setting up a new subsidiary or new activities.✓
- 4Parent must directly manage daily ops.
Correct answer
Subsidiary must seek RBI prior approval before setting up a new subsidiary or new activities.
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