[amp_mcq option1=”RBI’s decision to do away payment of interest on CRR balances” option2=”empowering NGOs involved in environmental protection” option3=”asking banks/financial institutions not to use coercive methods for recovery of loans” option4=”None of the above” correct=”option3″]
The correct answer is: C. asking banks/financial institutions not to use coercive methods for recovery of loans
Section 41 of the Reserve Bank of India Act, 1934 was amended in 2016 to prohibit banks and financial institutions from using coercive methods for recovery of loans. The amendment was carried out in response to the growing number of complaints from borrowers about the use of coercive methods by banks and financial institutions. The amendment prohibits banks and financial institutions from using methods such as harassment, intimidation, and threats of violence to recover loans. It also prohibits banks and financial institutions from using methods that are likely to cause harm to the borrower’s reputation or property.
The amendment to Section 41 of the Reserve Bank of India Act, 1934 is a significant step in protecting the rights of borrowers. The amendment will help to ensure that borrowers are not subjected to unfair or coercive treatment by banks and financial institutions.
Option A is incorrect because the RBI’s decision to do away payment of interest on CRR balances was not the purpose of the amendment to Section 41 of the Reserve Bank of India Act, 1934. The RBI’s decision to do away payment of interest on CRR balances was taken in 2011, while the amendment to Section 41 of the Reserve Bank of India Act, 1934 was carried out in 2016.
Option B is incorrect because empowering NGOs involved in environmental protection was not the purpose of the amendment to Section 41 of the Reserve Bank of India Act, 1934. The amendment to Section 41 of the Reserve Bank of India Act, 1934 is aimed at protecting the rights of borrowers, and it does not have any provisions that empower NGOs involved in environmental protection.
Option D is incorrect because the amendment to Section 41 of the Reserve Bank of India Act, 1934 was not carried out for none of the above reasons. The amendment to Section 41 of the Reserve Bank of India Act, 1934 was carried out to protect the rights of borrowers.