The Reserve Bank of India regulates the commercial banks in matters of:   1. liquidity of assets 2. branch expansion 3. merger of banks 4. winding-up of banks Select the correct answer using the codes given below.

The correct answer is D, because all four matters fall under RBI's statutory powers over commercial banks, mainly the Banking Regulation Act, 1949 and the RBI Act, 1934.

• 1. Liquidity of assets: Correct. RBI prescribes CRR and SLR and issues liquidity norms for banks.
• 2. Branch expansion: Correct. Section 23 of the BR Act requires RBI licence before opening new places of business. The 2017 branch authorisation policy relaxed prior approval for many centres, so this has changed since 2013.
• 3. Merger of banks: Correct. Sections 44A and 45 of the BR Act require RBI sanction for amalgamation schemes.
• 4. Winding-up of banks: Correct. Section 45 lets RBI seek winding-up or reconstruction, supersede boards, and impose moratoriums.

Concept: regulation and supervision of banks. This links to Mains GS-III on banking sector reforms and financial stability.

Trap: Aspirants often attribute branch or merger decisions to the Finance Ministry or government and eliminate options 2 or 3. Under the BR Act these rest with RBI.