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?

Correct option is B

Statement 1 is incorrect.

The Reserve Bank of India (RBI) does impose a minimum capital requirement for foreign banks operating as wholly owned subsidiaries in India. As per RBI regulations, a foreign bank wishing to set up a wholly owned subsidiary in India is required to have a minimum paid-up voting equity capital of ₹500 crore. This requirement ensures that the subsidiary has sufficient capital to operate securely within the Indian banking system.

Statement 2 is correct.

The RBI mandates that at least 50% of the directors on the board of a wholly owned subsidiary of a foreign bank in India must be Indian nationals. This requirement is intended to ensure that the subsidiary has significant local representation in its governance, which is crucial for aligning the bank's operations with Indian laws and regulations.