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CS Professional · Strategic Management and Corporate Finance · An Overview on Listing and Issuance of Securities in International Financial Services Centre

Under the IFSCA Act, 2019, the IFSC Authority imposes a penalty on an IFSC unit for a contravention of a law in the First Schedule. Which statement is correct?

Penalties are collected in the foreign currency equivalent, using the RBI-notified exchange rate on the date of the order imposing the penalty. All sums realised as penalties or fines are credited to the Consolidated Fund of India in Indian rupees, not retained by the Authority.

  1. AThe penalty is collected in Indian rupees at a fixed rate set in the Act and credited to the Authority's own fund
  2. BThe penalty is collected in the foreign currency equivalent of the penalty imposed, using the RBI-notified rate on the date of the order, and sums realised are credited to the Consolidated Fund of India in Indian rupeesCorrect
  3. CThe penalty is collected in foreign currency and retained by the IFSC Authority
  4. DThe penalty is converted at the RBI rate on the date of actual payment and credited to the IFSC Development Fund

Explanation

Penalties, fines, fees and settlement amounts are collected in the foreign currency equivalent, with the exchange rate being that notified by the RBI on the date of the order imposing the penalty. All sums realised by way of penalties or fines are credited to the Consolidated Fund of India in Indian rupees. Option D wrongly uses the date of payment.

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