Full Form of FEMA: Since the landmark liberation of 1991 the Indian Economy has enmarked on a journey of Grater Global integration.
One of the crucial aspects of Globalisation in post liberalisation era was the entry of foreign capital into the Indian Market.
The earlier strictly regulated market condition under Foreign Exchange Regulation Act did not favour financial traction with global markets.
The enactment of the Foreign Exchange Management Act in 1999 changed the regulatory system.
The space below has all the details on FEMA.
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History of FEMA
The Foreign Exchange Regulation Act (FERA) is a law passed in India in 1973.
Certain types of payments, foreign exchange (Forex) and securities transactions, transactions that indirectly affect foreign exchange transactions, and exports and imports of currency.
The bill was designed to regulate payments and foreign exchange.
FERA entered into force on 1 January 1974. FERA was started when the country's foreign exchange (foreign exchange) reserves were low because the foreign exchange was a scarce commodity. FERA, therefore, proceeded on the premise that all foreign exchange earned by Indian residents duly belongs to the Government of India and must be confiscated and turned over to the Reserve Bank of India (RBI). FERA has largely prohibited all transactions not approved by the RBI. Coca-Cola was India's leading soft drink until it withdrew from India in 1977 after the new government ordered the company to dilute its shares in Indian companies under the Foreign Exchange Regulation Act (FERA). In 1993, the company returned (together with PepsiCo) following the implementation of India's liberalization policy.
FERA entered into force on 1 January 1974. FERA was started when the country's foreign exchange (foreign exchange) reserves were low because the foreign exchange was a scarce commodity. FERA, therefore, proceeded on the premise that all foreign exchange earned by Indian residents duly belongs to the Government of India and must be confiscated and turned over to the Reserve Bank of India (RBI). FERA has largely prohibited all transactions not approved by the RBI. Coca-Cola was India's leading soft drink until it withdrew from India in 1977 after the new government ordered the company to dilute its shares in Indian companies under the Foreign Exchange Regulation Act (FERA). In 1993, the company returned (together with PepsiCo) following the implementation of India's liberalization policy.
Explanation of the act
Unlike other laws that allow everything unless explicitly prohibited, the Foreign Exchange Regulation Act of 1973 (FERA) (predecessor to FEMA) prohibited everything unless explicitly permitted.
Therefore, the intent and tone of the law were very drastic.
Even minor crimes required imprisonment.
Under FERA, a person was presumed guilty unless proven innocent, whereas, under other laws, a person was presumed innocent unless proven guilty.
FEMA is a regulatory mechanism that allows the Reserve Bank of India to regulate and the central government to make rules related to foreign exchange, in line with India's foreign trade policy.
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Structure of FEMA
FEMA headquarters, also known as the Director General's Bureau of Enforcement, is located in New Delhi.
It has five zone offices in Delhi, Mumbai, Kolkata, Chennai, and Jalandhar, each headed by a Deputy Director General.
All five zones are subdivided into seven sub-zone offices, headed by the Deputy Chief, and five field units, headed by the Chief Operating Officer.
Main characteristics of FEMA
Activities such as paying or receiving receipts from persons outside India, and trading foreign exchange and foreign securities are restricted. It is her FEMA that gives the central government the power to impose restrictions. Free checking account transactions are subject to any reasonable restrictions that may be imposed. MA restricts transactions in foreign currency or foreign securities and payments from abroad to India unless general or specific approval is obtained from FEMA. Transactions should only be made by authorized persons. Foreign exchange transactions in checking accounts by authorized persons may be restricted by central governments on the basis of the general public interest. The RBI is empowered by this law to impose a number of restrictions on capital account transactions, although foreign exchange sales or withdrawals are made through authorized persons. A resident of India shall not be entitled to hold any currency, securities, or property in a foreign country if such currency, securities, or property was owned or acquired while living outside India or was inherited from someone living outside India. You can own or hold real estate.What is Foreign Exchange Management Act?
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Indian Parliament that “consolidates and amends the Foreign Exchange Laws to facilitate foreign trade, and payments and promoting. Passed by Congress on December 29, 1999, replacing the Foreign Exchange Regulation Act (FERA). This law makes foreign exchange-related offenses a civil offense. Covers all of India and replaces FERA introduced under the liberalization policy. This enabled a new foreign exchange control regime in line with the new World Trade Organization (WTO) framework and paved the way for the introduction of the Anti-Money Laundering Law 2002, which entered into force on 1 July 2005.
When was the Foreign Exchange Regulation Act passed?
The Foreign Exchange Regulation Act (FERA) is a law passed in India in 1973.
What does FEMA do?
FEMA is a regulatory mechanism that allows the Reserve Bank of India to regulate and the central government to make rules related to foreign exchange, in line with India's foreign trade policy.
What id the difference between FEMA and FERA?
The Foreign Exchange Regulation Act (FERA) is a law passed in India in 1973. Certain types of payments, foreign exchange (Forex) and securities transactions, transactions that indirectly affect foreign exchange transactions, and exports and imports of currency. The bill was designed to regulate payments and foreign exchange.
FERA entered into force on 1 January 1974. FERA was started when the country's foreign exchange (foreign exchange) reserves were low because the foreign exchange was a scarce commodity. FERA, therefore, proceeded on the premise that all foreign exchange earned by Indian residents duly belongs to the Government of India and must be confiscated and turned over to the Reserve Bank of India (RBI). FERA has largely prohibited all transactions not approved by the RBI. Coca-Cola was India's leading soft drink until it withdrew from India in 1977 after the new government ordered the company to dilute its shares in Indian companies under the Foreign Exchange Regulation Act (FERA). In 1993, the company returned (together with PepsiCo) following the implementation of India's liberalization policy.
FERA entered into force on 1 January 1974. FERA was started when the country's foreign exchange (foreign exchange) reserves were low because the foreign exchange was a scarce commodity. FERA, therefore, proceeded on the premise that all foreign exchange earned by Indian residents duly belongs to the Government of India and must be confiscated and turned over to the Reserve Bank of India (RBI). FERA has largely prohibited all transactions not approved by the RBI. Coca-Cola was India's leading soft drink until it withdrew from India in 1977 after the new government ordered the company to dilute its shares in Indian companies under the Foreign Exchange Regulation Act (FERA). In 1993, the company returned (together with PepsiCo) following the implementation of India's liberalization policy.
Where is the headquarter of FEMA?
FEMA headquarters, also known as the Director General's Bureau of Enforcement, is located in New Delhi.
