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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto

Under the Act, who may specify classes of capital account transactions involving debt instruments that are permissible, along with limits and conditions on them?

The Reserve Bank specifies them, in consultation with the Central Government. Section 6(2) gives the Reserve Bank power over permissible classes of capital account transactions involving debt instruments, the admissible foreign exchange limits and conditions. The Central Government prescribes only for transactions not involving debt instruments.

  1. AThe Reserve Bank, in consultation with the Central GovernmentCorrect
  2. BThe Central Government alone, without consulting anyone
  3. CThe Competent Authority not below the rank of Joint Secretary
  4. DThe Appellate Tribunal

Explanation

Section 6(2) states that the Reserve Bank, in consultation with the Central Government, specifies permissible classes of capital account transactions involving debt instruments, their limits and conditions. The Central Government under 6(2A) deals with transactions not involving debt instruments, so the second option is wrong.

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