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IFSCA Act 2019: Fund, Accounts, Audit and Miscellaneous Provisions

Updated 11 October 2026 · Fact-checked

These provisions of the IFSCA Act, 2019 say how the Authority is funded (Section 15), how its accounts are kept and audited by the CAG (Section 16), how penalties are collected in foreign currency (Section 13), and who makes rules and regulations (Sections 27 and 28). Learn each section's trigger, actor and consequence.

Understand Finances, Accounts, Offences and Miscellaneous Provisions

The IFSCA Act, 2019 creates a single regulator for financial services in International Financial Services Centres. A regulator needs money, accountability and a way to make subordinate law. This topic covers exactly those support provisions.

Fund (Section 15). The Act creates the International Financial Services Centres Authority Fund. Grants, fees and charges received by the Authority go into it, along with sums from sources the Central Government decides. The Fund is used for salaries, allowances and remuneration of Members, officers and employees, and for other expenses of discharging functions and the Act's purposes.

Accounts and audit (Section 16). The Authority keeps proper accounts and records and prepares an annual statement of accounts in the form prescribed by the Central Government in consultation with the CAG. The CAG audits the accounts at intervals the CAG specifies, and the Authority pays the audit expenses. The certified accounts and audit report go to the Central Government every year, which lays them before each House of Parliament.

Penalties and money (Section 13). The Authority exercises the powers of the financial sector regulators listed in the First Schedule within IFSCs. Procedures of the respective Acts on applications, inspection, investigation, prosecution, settlement, compounding, adjudication, appeals, and fixing and recovering fines apply mutatis mutandis. Penalties, fines, fees and settlement amounts are collected in the foreign currency equivalent, using the RBI rate on the date of the order. All sums realised as penalties or fines under this Act are credited to the Consolidated Fund of India in Indian rupees.

Rules, regulations and other powers. The Central Government makes rules (Section 27). The Authority makes regulations consistent with the Act and rules (Section 28). The Authority can delegate powers, except the Section 28 power, to Members or officers, and form committees (Section 23). The Central Government can supersede the Authority for up to six months (Section 22), and can remove difficulties by order within five years of commencement (Section 32). Section 31 lets it modify other Central enactments for IFSCs.

Key rules to remember

Section 15: Fund: Credits: grants, fees, charges + sums from sources decided by Central Government. Application: pay of Members, officers, employees + other expenses; The Fund is called the International Financial Services Centres Authority Fund.
Section 16: Accounts and audit: Authority keeps accounts → CAG audits → report to Central Government → laid before each House of Parliament; Form of accounts is prescribed by Central Government in consultation with CAG. Authority pays audit expenses.
Section 13(5)-(6): Penalty money: Collected in foreign currency equivalent (RBI rate on date of order); credited to Consolidated Fund of India in rupees; Applies to penalties, fines, fees and settlement amounts; the crediting rule covers sums realised by way of penalties or fines.
Section 27 vs Section 28: Rules: Central Government. Regulations: Authority, consistent with Act and rules; Section 27(2)(d) covers the form of accounts; Section 28(2)(f) covers foreign currency for transactions.
Section 22: Supersession: Period not exceeding 6 months; notification with reasons; reasonable opportunity to Authority first; Grounds: circumstances beyond control, persistent default with deterioration, or public interest. Authority must be reconstituted by the end of the period.
Section 32: Removal of difficulties: Order by Central Government; none after 5 years from commencement; Orders must be laid before each House of Parliament.
Section 23: Delegation: Delegate to Member or officer by written order, except powers under Section 28; Committees of Members may be formed and given powers as specified by regulations.

How to solve Finances, Accounts, Offences and Miscellaneous Provisions questions

Use this method for any case or theory question on finances, accounts, penalties and miscellaneous provisions.

1Identify the issue: fund, accounts, audit, penalty collection, rule-making, delegation, supersession or removal of difficulties.
2Name the section and quote its rule in plain words, with the exact conditions.
3Identify the actors: Authority, Central Government, CAG, RBI or Parliament.
4Apply the facts to each condition and say whether it is met.
5Check limits, such as the six-month supersession cap, the five-year limit, and the Section 28 exclusion from delegation.
6Conclude clearly and add a practical compliance point, such as keeping records or filing the audit report.

Quickest way: Actor-action-limit grid

When to use it: Use when time is short and the question asks who does what under the Act.

Write the section number in the margin.
Note the actor in three words, for example CAG audits.
Note the action and the limit, for example six months or five years.
Write one fact-based line of application and a conclusion.

Common mistakes in Finances, Accounts, Offences and Miscellaneous Provisions

Saying the Authority's accounts are audited by a chartered accountant firm.
Students carry over company law audit rules.
Fix: Under Section 16, the CAG or a person appointed by the CAG audits. The Authority bears the cost.
Saying penalties are credited to the Authority Fund.
The Fund and penalty money are confused.
Fix: Under Section 13(6), sums realised as penalties or fines go to the Consolidated Fund of India in rupees. The Fund holds grants, fees and charges.
Saying penalties are collected in rupees.
Students assume Indian currency applies.
Fix: Collection is in the foreign currency equivalent, using the RBI rate on the order date. Credit to the Consolidated Fund is in rupees.
Mixing up who makes rules and who makes regulations.
Both are subordinate legislation.
Fix: Central Government makes rules (Section 27). The Authority makes regulations (Section 28).
Stating supersession can last a year or be indefinite.
Students forget the cap.
Fix: Supersession is for a period not exceeding six months, with reconstitution on or before expiry and a prior chance to make representations.
Saying the Authority can delegate its regulation-making power.
Students remember delegation but miss the exception.
Fix: Section 23(1) excludes powers under Section 28 from delegation.

Worked examples

Example 1

The IFSCA imposes a penalty on a registered entity in an IFSC. State in which currency the penalty is collected, how the amount is fixed, and where the money finally goes.

Show the solution

Section 13(5) says penalties, fines, fees and settlement amounts are collected in the foreign currency equivalent of the penalty imposed.
The Explanation fixes the conversion rate as the RBI-notified rate on the date of the order imposing the penalty.
Section 13(6) says sums realised as penalties or fines under the Act are credited to the Consolidated Fund of India in Indian rupees.
So the penalty is not kept in the Authority Fund.

Answer: The penalty is collected in foreign currency equivalent at the RBI rate on the order date, and the realised sums are credited in rupees to the Consolidated Fund of India.

Example 2

Explain how the accounts of the IFSCA are maintained and audited, and what happens to the audit report.

Show the solution

Section 16(1): the Authority maintains proper accounts and records and prepares an annual statement of accounts in the form prescribed by the Central Government in consultation with the CAG.
Section 16(2): the CAG audits at intervals the CAG specifies, and the Authority pays the audit expenses to the CAG.
Section 16(3): the CAG or a person appointed by the CAG has the same rights as in auditing Government accounts, including demanding books, vouchers and documents and inspecting the Authority's offices.
Section 16(4): the certified accounts with the audit report are forwarded annually to the Central Government, which causes them to be laid before each House of Parliament.

Answer: The Authority keeps the accounts in the prescribed form, the CAG audits them at self-specified intervals at the Authority's cost, and the certified accounts and report go yearly to the Central Government for laying before both Houses of Parliament.

Exam tips

Learn the section numbers: 13, 15, 16, 22, 23, 27, 28, 31, 32.
Keep Fund inflows and outflows in two short lists, and separate them from penalty money.
For case questions, state the rule, apply facts, then conclude. Mention the actor and the limit in each answer.
Use contrasts such as rules versus regulations and CAG versus company auditor to score quick marks.

Practice questions from IFSCA Ecosystem and Regulatory Framework

Finances, Accounts, Offences and Miscellaneous Provisions in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Finances, Accounts, Offences and Miscellaneous Provisions: frequently asked questions

Who audits the accounts of IFSCA?

The Comptroller and Auditor-General of India, or a person appointed by the CAG, audits them under Section 16. The Authority pays the audit expenses.

What goes into the IFSCA Fund?

All grants, fees and charges received by the Authority, and sums received from sources decided by the Central Government. It pays salaries and other expenses of the Authority.

Who can make regulations under the IFSCA Act?

The Authority makes regulations by notification under Section 28. They must be consistent with the Act and the rules made under it. The Central Government makes rules under Section 27.

For how long can the Central Government supersede IFSCA?

Not more than six months, by a notification giving reasons, after giving the Authority a reasonable opportunity to make representations. The Authority must be reconstituted on or before the end of the period.