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 ?

States RBI's current overall minimum capital adequacy requirement under Basel III: total capital 11.5% (including 2.5% conservation buffer and Tier‑1 7%).

A student could use this as a baseline regulatory minimum to compare against any specific subsidiary paid‑up capital or capital‑adequacy floor the RBI might set for foreign bank subsidiaries.

Notes that Scheduled Commercial Banks have to meet the minimum Basel III capital requirement and that falling below regulatory minima restricts lending.

One could infer that RBI expects entities operating as SCBs in India (including subsidiaries) to meet Basel III minima, so look for any additional RBI rule that adds a numeric subsidiary floor on top of Basel minima.

Gives historical context: Basel accords set minimum capital ratios (Basel I: 8% RWA; India applied CRAR norms and earlier RBI guidance set CRAR targets).

Use this pattern (Basel norms -> RBI adoption -> possible higher domestic floors) to suspect RBI might specify either a ratio or a paid‑up capital amount for foreign subsidiaries; check which form (ratio vs absolute amount) is used.

Provides an example of an absolute paid‑up capital threshold used in Indian bank regulation (₹5 lakh) for recognition as a scheduled bank.

A student could reason RBI sometimes uses absolute capital amounts in rules, so they should check whether the subsidiary requirement is an absolute paid‑up capital figure (like this example) rather than only a capital‑adequacy ratio.

Describes RBI’s regulatory oversight of foreign banks seeking presence in India and that applicants must disclose shareholders' financial position.

This indicates RBI imposes entry/structural conditions on foreign banks — prompting a search for a specific RBI circular or guideline that lays out a minimum capital requirement for wholly owned subsidiaries.

Says RBI issues guidelines for directors of banks and has powers to appoint additional directors and to approve senior appointments in commercial banks (except PSBs).

A student could infer RBI likely regulates board composition and then check RBI master directions or subsidiary-specific circulars to see if nationality requirements (eg. ≥50% Indian nationals) are mandated.

Notes RBI published a document (2005) on presence of foreign banks in India and that foreign banks must apply to RBI with shareholder details to open branches.

One could use this pattern (RBI guidance for foreign bank presence) to search RBI notifications on foreign bank subsidiaries for any board nationality rules.

Shows RBI classifies banks (including 'Private Sector Foreign Banks') and sets criteria for recognition, indicating RBI's role in regulatory categorization of foreign-owned banks.

A student might use this to justify checking regulatory criteria for recognition or licensing of a 'wholly owned subsidiary' for any director nationality conditions.

Explains IFSC units are treated as foreign territory and that RBI ODI rules apply differently, highlighting that location/type (IFSC vs onshore) can change applicability of RBI rules.

This suggests a student should distinguish onshore wholly owned subsidiaries from IFSC units when testing whether a nationality quota for board members applies.

Lists RBI's own fully owned subsidiaries, indicating RBI's practice of specifying governance for subsidiary entities.

A student can reason that if RBI sets governance norms for its subsidiaries, it may similarly set governance expectations for foreign-bank subsidiaries, prompting a targeted search of RBI subsidiary/foreign bank governance guidelines.