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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Mergers

Which statement about rule-making under Section 234(1) is correct?

Under the proviso to Section 234(1), the Central Government may make rules on mergers and amalgamations with foreign companies in consultation with the Reserve Bank of India. The rule-making power does not belong to the RBI, the Tribunal or SEBI alone.

  1. AThe RBI frames the rules without consulting the Central Government
  2. BThe Central Government may make rules in consultation with the Reserve Bank of IndiaCorrect
  3. CThe Tribunal frames the rules in consultation with SEBI
  4. DThe Central Government must make rules only after NFRA approval

Explanation

The proviso to Section 234(1) lets the Central Government make rules, in consultation with the RBI, in connection with mergers and amalgamations under the section. The Tribunal, SEBI and NFRA have no such role there.

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