| Macau and Hong Kong are two Special Administrative regions controlled by China. In January, 2014 the Reserve Bank of India (RBI) included Hong Kong and Macau in the 'Sensitive List' of countries. Consider the following statements. |
| 1. This means that establishments from Macau and Hong Kong will require prior approval of RBI for setting up business or related activities in India. |
| 2. The activities include establishment of liaison, branch, project offices or any other places of business. |
| 3. To this effect the Foreign Exchange Management Regulations - 2000 has been amended. |
| 4. Pakistan, Bangladesh, Srilanka, Afghanistan, Iran and China are already included in the Sensitive |
A) 1 and 2
B) 1, 2 and 4
C) 1, 3 and 4
D) 1, 2, 3, 4
Correct Answer: D
Solution :
[d] The Reserve Bank of India (RBI) included Hong Kong and Macau in the sensitive list of countries, along with Pakistan and China that will require its prior approval to set up business or related activities in India. This was done under the Foreign Exchange Management Act (FEMA). As per the existing conditions under the Foreign Exchange Management Regulations, no entity or person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China is allowed to set up any branch office or a liaison office or a project office or any other such business activity without the prior permission of the RBI.
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