Module: General Practice
Q51: Which category of Authorized Dealer is primarily comprised of Select Financial Institutions (such as EXIM Bank and SIDBI) and Factoring Companies, authorized to undertake foreign exchange transactions incidental to their specific business activities?
✅ Correct Answer: C
AD Category-III is a specialized niche category.
1. Composition: It includes select financial institutions (like the Export-Import Bank of India, SIDBI) and occasionally specific Cooperative Banks or Factoring Companies.
2. Scope: They are not general-purpose forex dealers.
Their authorization is "incidental" to their core business.
For example, EXIM Bank deals in forex to facilitate long-term export credit, not to sell tourist currency.
3. Contrast: AD-I: Commercial Banks (Universal scope). AD-II: Upgraded Money Changers (Retail/Travel/Remittance scope). FFMC: Pure Cash/Travel card changers.
1. Composition: It includes select financial institutions (like the Export-Import Bank of India, SIDBI) and occasionally specific Cooperative Banks or Factoring Companies.
2. Scope: They are not general-purpose forex dealers.
Their authorization is "incidental" to their core business.
For example, EXIM Bank deals in forex to facilitate long-term export credit, not to sell tourist currency.
3. Contrast: AD-I: Commercial Banks (Universal scope). AD-II: Upgraded Money Changers (Retail/Travel/Remittance scope). FFMC: Pure Cash/Travel card changers.