It is a soft, liberal and simplified law that aims at boosting foreign trade and investment more in tune with countrys new economic environment of globalization of indian economy. Foreign investors, frequently hear the terms fera and fema, when they deal with india. Provisions of foreign exchange management act fema provides free transaction on current account subject to the guidelines by the rbi. All financial transactions concerning foreign securities or exchange cannot be carried out without the approval of fema. Fema stands for the foreign exchange management act. This act seeks to make offences related to foreign exchange civil offences. Foreign exchange management act fema features of fema. Also contains index, relevant portions of 44 cfr, and the stafford act. Short title, extent, application and commencement act no.
In the budget of 199798, the government had proposed to replace fera1973, by fema foreign exchange management act 1999. Fera was very strict and even has a provision for imprisonment. In this act, unless the context otherwise requires, a adjudicating authority means an officer authorized under subsection 1 of section 16. Fema gives power to the central government for imposing restriction on activities like making payments to a person situated outside of the country or receiving money through them. Fema act 1999 foreign exchange management act, 1999 fema. The foreign exchange regulation act fera was passed in 1973. Practical issues in foreign transactions fema an overview. Insurance regulatory and development authority act, 1999 an act to provide for the establishment of an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or. These are important basic information about foreign exchange regulation act fera. Pdf 647kb applicant handbook fema 323 questions and answers on how to apply for public. Accordingly, on june 1, 2000, the foreign exchange management act, 1999 fema brought in force to replace the then existing fera. In the budget of 199798, the government had proposed to replace fera1973, by fema foreign exchange management act.
Fema, 1999foreign exchange management act, 1999 slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. An act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india. Reserve bank of india foreign exchange management act. Rbi plays a key role in the management of foreign exchange. For printing pdf 2mb fema report 322 replaces fema 286. With an expanded mission, stronger regions and the added responsibility of homeland security preparedness, fema has implemented significant, positive changes throughout the agency to help build worldclass emergency management and customer service capabilities. Fema 1999 foreign exchange management act 1999 fema part. Main features of foreign exchange management act 1999. Management act, 1999 fema the act was introduced as a part of liberalization process by the government of india. Fema an overview of relevant provisions for dtaa bcas 15th intensive study course on dtaa. Fema contains 7 chapters divided into 49 sections supreme legislation.
Practical issues in foreign transactions fema an overview nehru place cpe study circle. The foreign exchange management act, 1999 fema is an act of the parliament of india to. It is an act to manage the foreign exchange of india as opposed to fera which was enacted to regulatecontrol the foreign exchange. Following are the main features of foreign exchange management act, 1999. It was formulated in the year 1999 while it replaced fera foreign exchange regulation act. Main features of the foreign exchange management act fema. Thus at the turn of the millennium and indias coming of age fema was introduced in 2000, on 1 st june, with the foreign exchange management act, 1999. Facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market. Section 2 in the foreign exchange management act, 1999. Fema 1999 foreign exchange management act 1999 fema.
A draft for the foreign exchange management bill fema was prepared by the government of india to replace fera keeping in view of the indian economy. Facilitating foreign exchange transaction exports, imports, and payments thereof. The patents amendment act 1999 was passed in march 1999 to confirm with these international obligations and has retrospective effect from 1st january 1995. Fema part 1 foreign exchange management act 1999 please watch. This was meant to close all the loopholes and drawback of fera and hence major economic reforms were introduced under this act. The overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations. Fema 5 2000rb dated 3rd may 2000 reserve bank of india exchange control department central office mumbai 400 001 in exercise of the powers conferred by clause f of subsection 3 of section 6, subsection 2 of section 47 of the foreign exchange management act, 1999 42 of 1999, the reserve bank. The bill was referred to the standing committee on finance which submitted its report to the house on. Archived from the original pdf on 9 september 2012. Foreign exchange management act, 1999 fema a bill based on the recommendations of the task force, was introduced in the lok sabha on 4 august, 98. A1997 b1998 c 1999 d2000 show answer 2000 the foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. In which year, the foreign exchange management act fema. Fema act 1999 or foreign exchange management act, 1999 fema the foreign exchange management act, 1999 popularly known as fema act 1999, is an act of the parliament of india to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and.
Foreign exchange management act, 1999 fema reserve bank. Foreign exchange management act, 1999 fema after liberalisation in 1992, various sectors opened for fdi time to time which radically changed the foreign exchange position. The postkatrina emergency management reform act of 2006 created a new fema. Difference between fera and fema with comparison chart. Fema foreign exchange management act 1999 forex youtube. In this act, unless the context otherwise requires, in this act, unless the context otherwise requires, adjudicating authority means an officer authorised under subsection 1 of section 16. Maintenance of a healthy forex market in the country. The income tax department never asks for your pin numbers, passwords or similar access information for credit cards, banks or other financial accounts through email the income tax department appeals to taxpayers not to respond to such emails and not to share information relating to their credit card, bank and other financial accounts. Declarationcumundertaking under section 105, chapter iii of the foreign exchange management act, 1999 to, the branch head. The foreign exchange management act fema was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation act. The foreign exchange regulation act, 1973 fera the foreign exchange management act 1999 fema object conservation of foreign exchange. In exercise of the powers conferred by clause a of subsection 1, subsection 3 of section 7 and subsection 2 of section 47 of the foreign exchange management act, 1999 42 of 1999 and in supersession of its notification no. April 14, 2015 dear all welcome to the refurbished site of the reserve bank of india.
If you continue browsing the site, you agree to the use of cookies on this website. Describes provisions and applicantion procedures for public assistance program grants. Rules regulations notifications orders circulars statutory ordinance statutes. Fema was proposed by the both house of the parliament in dec. However until fema is enacted the provisions of fera was applied. Fera was not suitable in the new and liberal economy, thus it was replaced by foreign exchange management act fema 1999, which came into effect from 1st june 2000. It gives powers to the central government to regulate the flow of payments to and from a person situated outside the country. The government of india formulated fema or foreign exchange management act to encourage the external payments and across the border trades in india.
It was passed in the winter session of parliament in 1999, replacing the foreign exchange regulation act. The foreign exchange management act 1999 fema was an act passed in the winter session of parliament in 1999 extends to the whole of india, which replaced foreign exchange regulation act 1973fera as most of us who are dealing with foreign exchange currency or negotiable instrument equivalent of currency, of any country except indian currency must have heard or dealt with fema. Enforcement of foreign exchange management act fema is entrusted to a separate directorate, which undertakes investigations on contraventions of the act. The foreign exchange management act,1999 42 of 1999 an act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india. Establishment in india of a branch office or a liaison office or a project office or any other place of business regulations, 2016. One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise. The foreign exchange management act, 1999 was enacted to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and for promoting the orderly development and maintenance of foreign exchange market in india. The foreign exchange management act, 1999 is an act of the parliament of india to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india. Compounding of contraventions under fema, 1999 compounding of contraventions under fema, 1999. The practical aspects are covered in rules made by central government and regulations. Foreign exchange management act, 1999 bare acts law.
Instead of negative balance, there was substanital foreign exchange reserve so it was felt necessary to drop out the draconian law of fera. Foreign exchange management act, 1999 fema emerged as a replacement or say an improvement over the old foreign exchange regulation act, 1973 fera. In which year, the foreign exchange management act fema came into force. Main features of foreign exchange management act, 1999. This act was published in the gazette of india, on friday, march 26, 1999. Act means the foreign exchange management act, 1999 42 of 1999. These legislations, rules and regulations relating to foreign exchange management act, 1999, can be divided in to the followings. Act may be called the foreign exchange management act, 1999. Back ground earlier known as fera foreign exchange regulation act many stringent provisions in fera. As their name specifies, fera lays emphasis on the regulation of currencies, whereas the fema manages foreign exchange, i. Under section10 5, chapter iii of the foreign exchange management act, 1999 i we hereby declare that the transaction the details of which are specifically mentioned in the schedule hereunder does not involve, and is not designed for the purpose of any contravention or evasion of the provisions of the aforesaid act or of any rule. Foreign exchange management deposit regulations, 2000.
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