21. Local Area Banks can participate in the government’s financial inclusion schemes such as Pradhan Mantri Jan Dhan Yojana (PMJDY).
a) True.
b) False.
Answer: a) True.
22. Local Area Banks are allowed to conduct foreign exchange transactions without any restrictions.
a) True.
b) False.
Answer: b) False.
23. Local Area Banks must submit regular reports and financial statements to the RBI for regulatory oversight.
a) True.
b) False.
Answer: a) True.
24. Which of the following is a potential disadvantage of Local Area Banks?
a) Limited geographical reach.
b) Higher interest rates on loans and deposits.
c) Lack of specialized services.
d) Weak creditworthiness.
Answer: a) Limited geographical reach.
25. How many Local Area Banks can be established in a specific local area?
a) Only one.
b) Up to three.
c) Up to five.
d) There is no limit.
Answer: b) Up to three.
