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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

An authorised person, Bharat Forex Pvt. Ltd., fails to file a return as directed by the Reserve Bank. Which statement correctly describes the Reserve Bank's power under section 11(3)?

The Reserve Bank may impose a penalty up to ten thousand rupees after giving a reasonable opportunity of being heard, with an additional penalty up to two thousand rupees for each day of continuing contravention. This is the specific power over authorised persons under section 11(3).

  1. AThe Reserve Bank may impose, after giving reasonable opportunity of being heard, a penalty up to ten thousand rupees, plus up to two thousand rupees per day if continuingCorrect
  2. BThe Reserve Bank may impose a penalty up to thrice the sum involved without any hearing
  3. CThe Reserve Bank must refer the matter to the Adjudicating Authority, which alone can impose a penalty up to two lakh rupees
  4. DThe Reserve Bank may impose a penalty up to five thousand rupees per day from the first day

Explanation

Section 11(3) lets the Reserve Bank penalise an authorised person directly for contravening its direction or failing to file a return. It must give a reasonable opportunity of being heard. The penalty is up to ₹10,000 with up to ₹2,000 per day for continuing contravention.

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