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    Question

    Which of the following is a key function of the Reserve

    Bank of India (RBI) under FEMA? 
    A Setting the exchange rate of the Indian Rupee exclusively. Correct Answer Incorrect Answer
    B Issuing rules and regulations that entirely replace the original Act. Correct Answer Incorrect Answer
    C Providing general or special permissions for dealing in foreign exchange. Correct Answer Incorrect Answer
    D Acting as the sole auditor for all foreign currency accounts. Correct Answer Incorrect Answer
    E Imposing penalties on individuals for foreign exchange violations without any prior authority. Correct Answer Incorrect Answer

    Solution

    • Under the Foreign Exchange Management Act (FEMA), 1999, one of the key functions of the Reserve Bank of India (RBI) is to grant general or special permissions for dealing in foreign exchange and foreign securities. • Section 3 of FEMA prohibits dealing in foreign exchange except through authorized persons or with the RBI’s general or special permission. • RBI regulates foreign exchange transactions in India, issues guidelines, monitors cross-border transactions, and enforces FEMA provisions.

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