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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Kaveri Securities Ltd wants to know the status of the Reserve Bank in securities regulation. A partner reads the SEBI Act, 1992 and notes that it defines 'Reserve Bank'. Another partner notes the RBI Act's own commencement provisions. Which statement is correct?

The SEBI Act, 1992 defines Reserve Bank as the Reserve Bank of India constituted under section 3 of the RBI Act, 1934. Under section 1(3) of the RBI Act, only that section commenced at once, and the remaining provisions commenced on dates the Central Government appointed by notification.

  1. AThe SEBI Act defines Reserve Bank as the bank constituted under section 3 of the RBI Act, 1934; and under section 1(3) of the RBI Act only that section commenced at once, the rest on dates notified by the Central GovernmentCorrect
  2. BThe SEBI Act defines Reserve Bank as the bank constituted under section 3 of the RBI Act, 1934; and under section 1(3) all provisions of the RBI Act commenced at once
  3. CThe SEBI Act does not define Reserve Bank; and under section 1(3) of the RBI Act the State Governments appoint commencement dates
  4. DThe SEBI Act defines Reserve Bank by reference to the Banking Regulation Act, 1949; and under section 1(3) the Central Government appoints commencement dates

Explanation

Section 2(1)(ha) of the SEBI Act defines Reserve Bank as the Reserve Bank of India constituted under section 3 of the RBI Act, 1934. Section 1(3) of the RBI Act brought only that section into force at once, with the remaining provisions coming into force on dates appointed by the Central Government by notification. The other options misstate the definition or the appointing authority.

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