The correct answer is: A. A unit which is situated in Foreign country.
An offshore banking unit (OBU) is a financial institution that is located in a country other than the country in which its parent bank is located. OBUs are typically used by banks to offer offshore banking services to their customers. These services may include deposit accounts, loans, and investment products.
OBUs are often used by businesses and individuals to avoid taxes or regulations in their home country. However, OBUs can also be used for illegal activities, such as money laundering and tax evasion.
In recent years, there has been increased scrutiny of OBUs by governments and regulators. This is due to concerns about the use of OBUs for illegal activities. As a result, many countries have tightened their regulations on OBUs.
Here is a brief explanation of each option:
- Option A: A unit which is situated in Foreign country. This is the correct answer. OBUs are typically located in countries with favorable tax laws and regulations.
- Option B: A unit which is situated in Special Economic Zones and deals in foreign currency only. This is not the correct answer. OBUs can be located in any country, not just Special Economic Zones. Additionally, OBUs can deal in both domestic and foreign currency.
- Option C: A unit which is actively participating in lending foreign currency loans and in joint ventures. This is not the correct answer. OBUs can engage in a variety of activities, including lending foreign currency loans and participating in joint ventures. However, this is not their primary purpose.
- Option D: None of the above. This is not the correct answer. Option A is the correct answer.