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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

A bank operates a unit in an International Financial Services Centre set up under the Special Economic Zones Act, 2005. As to the regulation of financial products, services and institutions permitted in the IFSC, which statement fits the Banking Regulation Act, 1949 as in the official text?

The Reserve Bank's powers under the Banking Regulation Act do not extend to an IFSC. For financial products, services and institutions permitted in the IFSC, those powers are exercisable by the International Financial Services Centres Authority.

  1. AThe Reserve Bank's powers under that Act do not extend to the IFSC and are exercisable by the IFSCACorrect
  2. BThe Reserve Bank retains all its powers and the IFSCA only advises
  3. CThe powers pass to the Insurance Regulatory Authority
  4. DThe powers pass to SEBI for those matters

Explanation

Section 51A says the Reserve Bank's powers under the Act do not extend to an IFSC and are exercisable by the IFSCA for regulating products, services and institutions permitted there. The other options name wrong authorities or deny the transfer.

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