Chapter III — Central Banking Functions

Section 37: Suspension of asset requirements as to foreign securities

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 37 allows temporary suspension of specified Section 33 requirements concerning foreign securities when the statutory conditions and Central Government approval mechanism are met.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 37 in 2 minutes

Legal effectSection 37 allows temporary suspension of specified Section 33 requirements concerning foreign securities when the statutory conditions and Central Government approval mechanism are met.

Operative ruleThe provision is an emergency/flexibility mechanism within the note-backing framework, not a permanent waiver of Issue Department asset requirements.

Connected lawAny use should be evidenced by the relevant Government/RBI action and the exact period/conditions of suspension.

File evidenceReserve analysis should distinguish a lawful temporary suspension from ordinary non-compliance with Section 33.

Statutory structure and clause / subsection decode

This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.

Scope

Section 37 allows temporary suspension of specified Section 33 requirements concerning foreign securities when the statutory conditions and Central Government approval mechanism are met.

Operative limb

The provision is an emergency/flexibility mechanism within the note-backing framework, not a permanent waiver of Issue Department asset requirements.

Legal boundary

Any use should be evidenced by the relevant Government/RBI action and the exact period/conditions of suspension.

Worked practical example

Facts. A shortfall in a foreign-security component cannot be justified merely by market stress; the statutory Section 37 mechanism must actually have been invoked.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 37 and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Any use should be evidenced by the relevant Government/RBI action and the exact period/conditions of suspension.
Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.

Connected provisions and instruments

Section 37 has no universal instrument dependency in this package. Add an RBI circular or direction only when its subject, entity and effective date cover the issue being analysed.

Questions and answers

What is the purpose of Section 37?

Suspension of asset requirements as to foreign securities: Section 37 allows temporary suspension of specified Section 33 requirements concerning foreign securities when the statutory conditions and Central Government approval mechanism are met.

Which statutory limb should be checked first?

Scope - Section 37 allows temporary suspension of specified Section 33 requirements concerning foreign securities when the statutory conditions and Central Government approval mechanism are met.

What is the next legal boundary?

Operative limb - The provision is an emergency/flexibility mechanism within the note-backing framework, not a permanent waiver of Issue Department asset requirements.

What record should support the conclusion?

Section 37 file evidence: Reserve analysis should distinguish a lawful temporary suspension from ordinary non-compliance with Section 33.

Primary sources

Source control for Section 37: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.