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CS Professional · IFSCA - Regulations, Listing and Compliances · International Financial Services Centres: An Introduction

A foreign bank branch in GIFT IFSC is penalised by IFSCA for a contravention. The order imposes a fine and the bank asks how it will be collected and what happens to the amount. Which is correct under the Act?

The fine is collected in the foreign currency equivalent of the amount imposed, converted at the Reserve Bank of India's notified rate on the date of the order. The amount realised is then credited to the Consolidated Fund of India in Indian rupees.

  1. ACollected in the foreign currency equivalent at the RBI-notified rate on the date of the order, and the sums are credited to the Consolidated Fund of India in rupeesCorrect
  2. BCollected in rupees at the rate on the date of payment, and kept by IFSCA as its own fund
  3. CCollected in foreign currency at the rate on the date the contravention occurred, and credited to the IFSCA fund
  4. DCollected in rupees only, and credited to the State Government of Gujarat

Explanation

Section 13(5) requires penalties to be realised in the foreign currency equivalent, using the RBI rate on the date of the order. Section 13(6) says sums realised are credited to the Consolidated Fund of India in Indian rupees.

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