Banks are required to transfer _________of their profits to statutory reserve.

20%

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25%

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10%

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None of these

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Solution

The correct option is D 25%
Under Section 17, every banking company incorporated in India is required to transfer at least 25% of its current profit to its reserve fund. It is known as statutory reserve. Only those banks get exemptions from this legal condition whose reserve along with share premium if any become equal to paid up capital.

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