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CS Executive · Capital Market and Securities Laws · International Financial Services Centres Authority (IFSCA)

IFSCA imposes a penalty of Rs 50 lakh on an IFSC entity by an order dated 10 March. Which exchange rate is used to compute the foreign currency equivalent of this penalty?

The foreign currency equivalent is computed at the exchange rate notified by the Reserve Bank of India on the date of the order imposing the penalty or fine, not the payment date or the contravention date.

  1. AThe rate notified by the Reserve Bank of India on the date of the order imposing the penaltyCorrect
  2. BThe rate notified by RBI on the date the penalty is actually paid
  3. CThe rate fixed by IFSCA on the first day of the financial year
  4. DThe rate prevailing on the date the contravention occurred

Explanation

The Explanation to section 13 says the rate of exchange is the one notified by the Reserve Bank of India on the date of the order imposing the penalty or fine. The payment date and contravention date are not the reference dates, so those options are wrong.

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