Chapter III — Central Banking Functions

Section 41: [Repealed.] Obligation to buy sterling

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 41 is repealed and historically concerned RBI's obligation to buy sterling.

Historical / non-operativeOfficial sources mappedProvision-specific decode

Current legal status

Section 41 is repealed and historically concerned RBI's obligation to buy sterling.

It has no current operative role in India's foreign-exchange framework.

Use today: Current foreign-exchange transactions are governed by surviving RBI Act powers, FEMA and current RBI directions.

Historical reading note

Historical material should identify the sterling-standard context before quoting this section.

Illustration. A present USD/INR transaction cannot be analysed using the former statutory sterling-purchase obligation.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 41 and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Current foreign-exchange transactions are governed by surviving RBI Act powers, FEMA and current RBI directions.
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Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.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 41 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 41?

[Repealed.] Obligation to buy sterling: Section 41 is repealed and historically concerned RBI's obligation to buy sterling.

Which statutory limb should be checked first?

Scope - Section 41 is repealed and historically concerned RBI's obligation to buy sterling.

What is the next legal boundary?

Operative limb - It has no current operative role in India's foreign-exchange framework.

What record should support the conclusion?

Section 41 file evidence: Historical material should identify the sterling-standard context before quoting this section.

Primary sources

Source control for Section 41: 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.