Which of the following policies of the financial sectors is basically designed to transfer local financial assets into foreign financial assets freely and at market determined exchange rates? Policy of

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Capital Account Convertibility
B	Financial Deficit Management
C	Minimum Support Price
D	Restrictive Trade practices

Explanation:

Detailed explanation-1: -Capital account convertibility allows freedom to convert local financial assets into foreign financial assets and vice-versa.

Detailed explanation-2: -Specific Examples: Cash or foreign currency, real estate, precious metals, art and collectibles. Foreign stocks or securities. Safe deposit box. Foreign Financial Institution Investment Account.

Detailed explanation-3: -According to the IRS, examples of other specified foreign financial assets (not an exhaustive list) include, if they are held for investment: stock issued by a foreign corporation; a capital or profits interest in a foreign partnership; and interest in a foreign trust or foreign estate.

Detailed explanation-4: -What is the importance of FEMA? The main objective of FEMA was to help facilitate external trade and payments in India. It was also meant to help orderly development and maintenance of foreign exchange market in India. It defines the procedures, formalities, dealings of all foreign exchange transactions in India.

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