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CS Professional · IFSCA - Regulations, Listing and Compliances · Banking Services and Finance Companies in IFSC

Sunil, a promoter, plans an IFSC Finance Company whose entire capital is contributed by himself through a foreign-currency remittance. Which statement best reflects the framework?

Capital in freely convertible foreign currency is acceptable, provided the company meets IFSCA's prescribed minimum net owned fund for its activities. The framework requires a minimum capital base and does not mandate rupee capital or bank ownership.

  1. ACapital must be brought in a freely convertible foreign currency and must meet IFSCA's minimum net owned fund requirementCorrect
  2. BCapital must be in rupees only
  3. CNo minimum capital applies to Finance Companies
  4. DCapital must be contributed only by a bank

Explanation

IFSC units operate in permitted foreign currency, and the Finance Company Regulations prescribe minimum capital or net owned fund requirements depending on activity. Rupee-only capital is inconsistent with IFSC operations, and ownership by a bank is not mandatory.

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