CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment
Meridian Textiles Ltd, an authorised person's customer, is told by the Reserve Bank to furnish certain information about its foreign security dealings. The direction is issued to an authorised person under Section 11 of FEMA. Which statement correctly describes the power of the Reserve Bank under that section?
Under Section 11(2) of FEMA the Reserve Bank may direct any authorised person to furnish information in such manner as it deems fit, so that compliance with the Act and its rules, regulations, notifications and directions is ensured.
- AIt may direct an authorised person to furnish information in such manner as it deems fit, to ensure compliance with the ActCorrect
- BIt may direct only the Central Government to furnish information about foreign security
- CIt may impose imprisonment on an authorised person for ignoring a direction
- DIt may issue directions only about export of goods and not about foreign security
Explanation
Section 11(2) lets the Reserve Bank direct any authorised person to furnish information in such manner as it deems fit for ensuring compliance. Section 11(1) also covers directions on payments and acts relating to foreign exchange or foreign security, so the option limiting it to exports is wrong. Section 11(3) provides a monetary penalty, not imprisonment.
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