Module: | Priority Sector, Consumer Protection & Digital Lending
Q79: Identify the INCORRECT statement regarding the liability of bank officers in case of CRR/SLR default:
✅ Correct Answer: C
The correct answer is C. This statement is legally incorrect.
Under the provisions of the RBI Act and the Banking Regulation Act, while bank officers can be held personally liable for regulatory defaults, the Reserve Bank of India (RBI) does not possess the direct, arbitrary power to automatically deduct penalty fines from an individual officer's salary.
Fines must be levied and recovered through proper, established legal procedures (Due Process). Option A is correct, as the law explicitly targets any officer who is "knowingly a party to the default." Option B is correct, as financial fines are a standard statutory penalty for such infractions.
Option D is correct, as the ultimate accountability for statutory compliance rests with the executive heads, such as the Chairman or CEO of the bank.
Under the provisions of the RBI Act and the Banking Regulation Act, while bank officers can be held personally liable for regulatory defaults, the Reserve Bank of India (RBI) does not possess the direct, arbitrary power to automatically deduct penalty fines from an individual officer's salary.
Fines must be levied and recovered through proper, established legal procedures (Due Process). Option A is correct, as the law explicitly targets any officer who is "knowingly a party to the default." Option B is correct, as financial fines are a standard statutory penalty for such infractions.
Option D is correct, as the ultimate accountability for statutory compliance rests with the executive heads, such as the Chairman or CEO of the bank.