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CMA Final · Corporate and Economic Laws · Foreign Exchange Management Act, 1999

Under the Foreign Exchange Management Act, 1999, which of the following correctly describes the territorial application of the Act as regards offices outside India?

The Act extends to the whole of India and also applies to all branches, offices and agencies outside India that are owned or controlled by a person resident in India. It also covers contraventions committed outside India by persons to whom the Act applies.

  1. AIt applies only to persons and offices located within the territory of India
  2. BIt also applies to all branches, offices and agencies outside India owned or controlled by a person resident in IndiaCorrect
  3. CIt applies outside India only to branches of banks and not to other offices
  4. DIt applies outside India only if the Reserve Bank issues a notification for each branch

Explanation

Section 1(3) provides that the Act also applies to all branches, offices and agencies outside India owned or controlled by a person resident in India, and to contraventions committed outside India by any person to whom the Act applies. The option limiting it to India alone ignores this extra-territorial reach.

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