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      Question

      Section 47A empowers the Reserve Bank to impose

      penalties. Where the contravention or default is of the nature referred to in Section 46(4), the Reserve Bank may impose a penalty not exceeding one crore rupees or twice the amount involved (where quantifiable), whichever is more, and for a continuing default, a further penalty which may extend to:
      A Fifty thousand rupees for every day Correct Answer Incorrect Answer
      B Ten thousand rupees for every day Correct Answer Incorrect Answer
      C Five lakh rupees for every day Correct Answer Incorrect Answer
      D One lakh rupees for every day after the first day Correct Answer Incorrect Answer
      E Twenty-five thousand rupees for every day Correct Answer Incorrect Answer

      Solution

      Section 47A(1)(c) provides that where the contravention or default is of the nature referred to in Section 46(4), the Reserve Bank may impose a penalty not exceeding one crore rupees or twice the amount involved in such contravention or default where such amount is quantifiable, whichever is more, and where the contravention or default is a continuing one, a further penalty which may extend to one lakh rupees for every day after the first day during which it continues. The section operates notwithstanding Section 46, and before imposing any penalty the RBI must serve a show-cause notice. This adjudicatory penalty mechanism complements the criminal penalties under Section 46.

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