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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Sunrise Fincorp, an entity with a unit in the GIFT City International Financial Services Centre (IFSC), asks which regulator exercises the powers under the Banking Regulation Act, 1949 for financial products, services and institutions permitted in the IFSC. Which is correct?

The International Financial Services Centres Authority exercises these powers. Under the Banking Regulation Act, the Reserve Bank's powers do not extend to an IFSC. They pass to the IFSCA for financial products, services and institutions permitted in the IFSC.

  1. AThe Reserve Bank of India, as in the rest of India
  2. BThe Securities and Exchange Board of India
  3. CThe International Financial Services Centres AuthorityCorrect
  4. DThe Insurance Regulatory and Development Authority of India

Explanation

Section 51A of the Banking Regulation Act, 1949 says the Reserve Bank's powers under that Act do not extend to an IFSC. They are exercisable by the International Financial Services Centres Authority for financial products, services and institutions permitted in the IFSC. The RBI option ignores this carve-out.

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