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

Under Section 11, the Reserve Bank directs an authorised person, Sunrise Bank, to file a return, and the bank fails to do so. What consequence may follow?

The Reserve Bank may, after giving a reasonable opportunity of being heard, impose a penalty extending to ten thousand rupees, and for continuing contravention an additional penalty up to two thousand rupees for every day it continues, under Section 11(3).

  1. AImprisonment of the bank's officers without any hearing
  2. BAutomatic cancellation of the bank's licence
  3. CA penalty up to ten thousand rupees after reasonable opportunity of being heard, plus up to two thousand rupees per day for continuing contraventionCorrect
  4. DA penalty fixed at thrice the sum involved in the transaction

Explanation

Section 11(3) lets the Reserve Bank, after giving a reasonable opportunity of being heard, impose a penalty up to ten thousand rupees on an authorised person who contravenes a direction or fails to file a return, with up to two thousand rupees for each day of continuing contravention. Imprisonment or licence cancellation is not provided there.

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