Skip to content

CA Foundation · Business Laws · Indian Regulatory Framework

Anita, a trader in Jaipur, wants to know which authority has the power to make laws on 'banking' and 'stock exchanges' in India. Under the constitutional distribution of legislative powers, who can make laws on these matters?

Only Parliament can make laws on banking and stock exchanges because both are Union List subjects in the Seventh Schedule. State Legislatures cannot legislate on them, and regulators like RBI and SEBI work only under powers delegated by Parliamentary statutes.

  1. AOnly the State Legislature, as it is a State List subject
  2. BOnly the Parliament, as these are Union List subjectsCorrect
  3. CParliament and State Legislatures jointly, as these are Concurrent List subjects
  4. DThe Reserve Bank of India alone, without any parliamentary law

Explanation

Banking and stock exchanges are entries in the Union List of the Seventh Schedule, so only Parliament can legislate on them. State Legislatures have no power over Union List subjects. Regulators such as RBI and SEBI act under laws made by Parliament and cannot make law independently of it.

Did you get it right without looking?

One question tells you little. A timed set on Indian Regulatory Framework shows your real accuracy, how long you take and where you lose marks.

Practise Indian Regulatory FrameworkFree diagnostic mock

More Indian Regulatory Framework questions