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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Which statement about the IFSC carve-out is correct across the three statutes: Reserve Bank of India Act, 1934, Banking Regulation Act, 1949 and Insurance Act, 1938?

Each of the three Acts has a parallel provision. Sections 51A, 57A and 118A state that the respective regulator's powers do not extend to an IFSC and are exercisable by the International Financial Services Centres Authority for financial products, services and institutions permitted there.

  1. AOnly the Banking Regulation Act has such a carve-out
  2. BEach Act provides that the powers of its regulator (Reserve Bank, Bank or Insurance Authority) do not extend to an IFSC and are exercisable by the IFSC Authority for permitted products, services and institutionsCorrect
  3. COnly the Insurance Act transfers powers, to the Central Government
  4. DThe RBI Act transfers powers to SEBI in the IFSC

Explanation

Sections 51A (Banking Regulation Act), 57A (RBI Act) and 118A (Insurance Act) use the same pattern: regulator's powers do not extend to the IFSC and are exercisable by the IFSC Authority. The other options name wrong transferees or limit the carve-out to one Act.

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