Which one of the following transactions can be carried on without any restriction or regulation of the RBI under the FEMA?
Drawal of foreign exchange for payments due on account of amortization of loans or for depreciation of direct investment.
Concept: FEMA divides foreign-exchange dealings into capital account transactions, which change assets or liabilities abroad and may be regulated by the RBI, and current account transactions, which relate to ordinary trade and payments and are generally free.
Drawal of foreign exchange to meet payments due for amortization of loans or for depreciation of direct investment is treated as a current account transaction, so it may be carried on freely without RBI restriction (subject only to any specified limits). For example, remitting a scheduled loan-repayment instalment abroad is a routine current-account payment, not a fresh cross-border investment.
Option check: Transfer or issue of a foreign security by a resident (option 1) and transfer or issue of a security by a non-resident (option 2) are capital account transactions the RBI regulates; the export, import or holding of currency notes (option 4) is specifically restricted. Only the current-account drawal in option 3 is free.
Hence the transaction that can be carried on without RBI restriction is the drawal of foreign exchange for amortization of loans or depreciation of direct investment.
Similar Questions
If rF and rD are the interest rates of a foreign country and domestic country, respectively, and if SF/D and fF/D are spot exchange rate and forward exchange rate between the countries F and D, the interest rate parity is indicated by :
An Indian company is importing machine at a price of $ 5,00,000, payable after six months. The current exchange rate is ₹ 63 per US $. The forward contract for six months is available @ ₹ 64 per US $. If the rate turns out to be ₹ 64.25 per US $, the net gain to the importer in case he has entered into contract will be :
Match the items given in List - I and List - II.
List - I List - II (a) Beggar thy Neighbour Trade Policy (i) Having low factor of interdependence (b) Mercantilism Theory (ii) Having an advantage of earning a return on knowledge assets (c) Multi-Domestic Strategy (iii) Alleviating some domestic economic problem by exporting to foreign countries (d) Turnkey Project (iv) Propagates encouragement of exports and discouraging imports Code :
Which of the following organizations play an active role to prevent the contagion situation of crisis, such as the Greek Sovereign debt crisis ?
As a part of the WTO Guidelines, the Agreement on Agriculture (AOA) does not include :
The Most Favoured Nation status doesn’t necessarily refer to :
Anti dumping duty is levied on which one of the following:
Assertion (A): Export Processing Zones (EPZs) were set up as an enclave separated from the Domestic Tariff Area (DTA) and converted into SEZs.
Reason (R): The Export Oriented Units (EOUs) scheme is complimentary to the EPZ and is introduced to enable exporters enjoy liberal package of incentives.
Codes:
Challenges before international business such as base erosion and profit shifting (BEPs), tax avoidance and shifting between a holding company and a subsidiary located in two different tax sovereigns may be resolved by which one of the following?
An efficient dispute settlement mechanism under WTO was brought in by which one of the following:
Important Questions from International Business
- Which is not one of the three dimensions of IHRM according to Peter J Dowling and Denice E Welch?
- Which among the following pertain to international staffing policy?
A. Geocentric
B. Expatriates
C. Repatriates
D. Employee leasing
E. Career portability
Choose the correct answer from the options given below: - Fill in the blank
"The member countries of WTO have moved to product patent regime under the __________ to meet their obligations under the seven areas covered by the __________ agreement". - Match the List-I and List-ll regarding International business theories with developers:
List I List II (i) Absolute Cost Advantage theory (a) Raymond Xernon (ii) Comparative Cost Advantage theory (b) Adam Smith (iii) Factor Endowment theory (c) David Recardo (iv) Product Life cycle theory (d) Eli Heckscher - What are the member countries of SAARC(South Asian Association for Regional Co-operation)?
