With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements:1.There is no minimum capital requirement for wholly owned banking subsidiaries in India.2.For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.Which of the statements given above is/are correct?

1. A

   1 only

   1 only. Wholly owned subsidiaries do face a minimum capital requirement.

2. B

   2 only

   2 only. The 50% Indian-national board rule is not the RBI WOS rule as stated.

3. C

   Both 1 and 2

   Both. Both statements fail on this paper.

4. D

   Neither 1 nor 2

   Neither. Minimum capital applies; board composition is not “at least 50% Indian nationals” as the statement puts it.

Summary. Official key is (d) neither. RBI requires substantial minimum capital for a wholly owned banking subsidiary. The board rule in the statement (at least 50% Indian nationals) is not accepted as a correct statement of the WOS regime on this paper. So both 1 and 2 are false.