Skip to content

CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment

An authorised dealer bank in Mumbai fails to file a return that the Reserve Bank had directed it to file regarding overseas investment remittances. Under the Foreign Exchange Management Act, 1999, what is the maximum basic penalty the Reserve Bank may impose on the authorised person for this failure, after giving a reasonable opportunity of being heard?

The maximum basic penalty is ten thousand rupees. Under Section 11(3), the Reserve Bank may penalise an authorised person who fails to file a directed return or breaches its direction, with up to two thousand rupees more for each day of continuing contravention.

  1. ATen thousand rupeesCorrect
  2. BTwo thousand rupees
  3. CTwo lakh rupees
  4. DFive thousand rupees

Explanation

Section 11(3) allows the Reserve Bank, after a reasonable hearing, to penalise an authorised person who contravenes a direction or fails to file a directed return, up to ten thousand rupees. A continuing contravention attracts an additional amount up to two thousand rupees per day. Two thousand is only the daily add-on, and five thousand is the daily figure under Section 13 for ordinary persons.

Did you get it right without looking?

One question tells you little. A timed set on Overseas Direct Investment shows your real accuracy, how long you take and where you lose marks.

Practise Overseas Direct InvestmentFree diagnostic mock

More Overseas Direct Investment questions