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

An authorised person, Sundaram Forex Ltd, fails to file a return as directed by the Reserve Bank. Which provision governs the penalty, and what is the base penalty limit?

Section 11(3) applies. For an authorised person who fails to file a return as directed, the Reserve Bank may impose a penalty up to Rs 10,000 after giving a reasonable opportunity of being heard, with up to Rs 2,000 more for each day of continuing contravention.

  1. ASection 13(1); up to thrice the sum involved
  2. BSection 12; up to Rs 5,000 per day
  3. CSection 11(3); up to Rs 10,000 after a reasonable opportunity of being heardCorrect
  4. DSection 7; up to Rs 2 lakh

Explanation

Section 11(3) covers an authorised person contravening an RBI direction or failing to file a return. The RBI may impose up to Rs 10,000 after giving a reasonable opportunity of being heard, plus up to Rs 2,000 per day for continuing contravention. Section 13(1) is the general penalty and does not apply here.

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