Skip to content

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

Under Section 6 of FEMA, who specifies the permissible classes of capital account transactions involving debt instruments, and in what manner?

For capital account transactions involving debt instruments, the Reserve Bank specifies the permissible classes, limits and conditions in consultation with the Central Government under Section 6(2). The roles are reversed for transactions not involving debt instruments, which the Central Government prescribes in consultation with the Reserve Bank.

  1. AThe Central Government alone, without consulting the Reserve Bank
  2. BThe Reserve Bank, in consultation with the Central GovernmentCorrect
  3. CThe Reserve Bank alone, without consulting anyone
  4. DThe Central Government, in consultation with the Reserve Bank

Explanation

Section 6(2) lets the Reserve Bank, in consultation with the Central Government, specify permissible classes of capital account transactions involving debt instruments, limits and conditions. The Central Government, in consultation with the Reserve Bank, prescribes those not involving debt instruments under Section 6(2A), which is the key distractor.

Did you get it right without looking?

One question tells you little. A timed set on Law relating to Foreign Exchange Management shows your real accuracy, how long you take and where you lose marks.

Practise Law relating to Foreign Exchange ManagementFree diagnostic mock

More Law relating to Foreign Exchange Management questions