Skip to content

CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

Meridian Forex Services, an authorised person, ignores a written direction from the Reserve Bank about making a payment relating to foreign exchange. Under the Act, what is the maximum initial penalty the Reserve Bank can impose after giving a reasonable opportunity of being heard?

The maximum initial penalty is ten thousand rupees. The Reserve Bank may impose it on an authorised person who contravenes its direction, after giving a reasonable opportunity of being heard. A further penalty of up to two thousand rupees per day applies only if the contravention continues.

  1. ARupees two thousand
  2. BRupees ten thousandCorrect
  3. CRupees fifty thousand
  4. DRupees one lakh

Explanation

Where an authorised person contravenes a direction of the Reserve Bank, the Reserve Bank may, after a reasonable hearing, impose a penalty up to ten thousand rupees. The figure of two thousand rupees applies only as the additional per-day penalty for a continuing contravention, so it is not the initial maximum.

Did you get it right without looking?

One question tells you little. A timed set on Law relating to Foreign Exchange Management shows your real accuracy, how long you take and where you lose marks.

Practise Law relating to Foreign Exchange ManagementFree diagnostic mock

More Law relating to Foreign Exchange Management questions