Section 18 of The Special Economic Zones Act, 2005
- (1)The Central Government may approve the setting up of an International Financial Services Centre in a Special Economic Zone and prescribe the requirements for setting up and operation of such Centre: Provided that the Central Government shall approve only one International Financial Services Centre in a Special Economic Zone.
- (2)The Central Government may, subject to such guidelines as may be framed by the Reserve Bank, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and such other concerned authorities, as it deems fit, prescribe the requirements for setting up and the terms and conditions of the operation of Units in an International Financial Services Centre.
Summary
- The Central Government has the authority to approve the setup of an International Financial Services Centre in a Special Economic Zone.
- The government is strictly limited to approving only one International Financial Services Centre per Special Economic Zone.
- The Central Government prescribes the requirements for setting up and running such a centre.
- The operational rules and terms for units inside this centre are set by the Central Government subject to guidelines from key financial watchdogs.
- These guiding regulators include the Reserve Bank of India, the Securities and Exchange Board of India, and the Insurance Regulatory and Development Authority.
Practical examples
FAQ
1. Can a Special Economic Zone have more than one International Financial Services Centre?
No, the Central Government is only allowed to approve one International Financial Services Centre in any single Special Economic Zone.
2. Which regulatory authorities help frame the guidelines for these centres?
The guidelines are framed by the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority, and other concerned authorities.
3. Who has the ultimate power to approve the setting up of an International Financial Services Centre?
The Central Government has the sole authority to approve the setting up of these centres.
Test yourself
Q1.Under Section 18 of The Special Economic Zones Act, 2005, what is the maximum number of International Financial Services Centres that can be approved in a single Special Economic Zone?
Q2.Under Section 18 of The Special Economic Zones Act, 2005, which of the following authorities is not explicitly mentioned as a body whose guidelines shape the terms of operations?
Q3.Under Section 18 of The Special Economic Zones Act, 2005, who is responsible for approving the setting up of an International Financial Services Centre?
Q4.Under Section 18 of The Special Economic Zones Act, 2005, what must the Central Government do regarding the requirements and terms of operation for units inside the centre?