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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto

Meera Textiles Ltd plans to fund an overseas venture. Under Section 6, who specifies the permissible classes of capital account transactions involving debt instruments and the limits up to which foreign exchange is admissible for them?

The Reserve Bank, in consultation with the Central Government, specifies the permissible classes of capital account transactions involving debt instruments, the limits up to which foreign exchange is admissible, and any conditions. The Central Government, consulting the Reserve Bank, does this for transactions not involving debt instruments.

  1. AThe Reserve Bank, in consultation with the Central GovernmentCorrect
  2. BThe Central Government alone, without consulting the Reserve Bank
  3. CThe Adjudicating Authority
  4. DThe Appellate Tribunal

Explanation

Section 6(2) empowers the Reserve Bank, in consultation with the Central Government, to specify permissible classes of capital account transactions involving debt instruments, limits and conditions. Option two is wrong because that is the position for transactions not involving debt instruments, which fall under 6(2A).

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