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CS Professional · IFSCA - Regulations, Listing and Compliances · International Financial Services Centres: An Introduction

Nova Capital Ltd., a finance company in GIFT IFSC, receives a notice of a penalty imposed by IFSCA for a contravention. The order is passed on a date when the RBI has notified an exchange rate for the rupee. Under the IFSCA Act, 2019, how is the penalty collected and where is the sum finally credited?

The penalty is collected in the foreign currency equivalent, converted at the rate notified by the RBI on the date of the penalty order. The sums realised are then credited to the Consolidated Fund of India in Indian rupees, not retained by IFSCA.

  1. ACollected in Indian rupees and credited to the IFSCA's own fund
  2. BCollected in the foreign currency equivalent at the RBI-notified rate on the date of the order, and credited to the Consolidated Fund of India in Indian rupeesCorrect
  3. CCollected in the foreign currency equivalent at the RBI rate on the date of payment, and credited to the Consolidated Fund of India in foreign currency
  4. DCollected in foreign currency and retained by IFSCA for development of IFSC

Explanation

Penalties, fines, fees and settlement amounts are collected in the foreign currency equivalent, computed at the rate notified by the RBI on the date of the order imposing the penalty. All sums realised by way of penalties or fines are credited to the Consolidated Fund of India in Indian rupees. The option using the date of payment is wrong, as the Act fixes the date of the order.

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