Assertion (A): Reserve Bank of India is an important regulatory and administrative authority to execute FEMA provisions.

Reason (R): Being monetary authority and custodian of foreign exchange, Reserve Bank of India enjoys requisite expertise of FEMA administration.

In the context of the above two statements, which one of the following option is correct?

Correct option is A

Both statements are correct, and the reason given in (R) explains (A). The Reserve Bank of India (RBI) is indeed responsible for implementing the Foreign Exchange Management Act (FEMA) provisions, as it is the monetary authority of the country and also the custodian of India's foreign exchange reserves. The RBI’s expertise in managing foreign exchange and its regulatory powers give it the authority to enforce the provisions of FEMA.
Information Booster:
· FEMA was enacted to facilitate external trade and payments and to promote the orderly development of the foreign exchange market in India.
· The RBI plays a crucial role in the administration of FEMA, monitoring foreign exchange transactions, and ensuring compliance with regulations.
· As the custodian of foreign exchange reserves, the RBI manages exchange rates and the country’s financial transactions with the outside world.