DIFFERENCE BETWEEN FERA & FEMA Sr.No.

1 2 Point Emphasis Situation FERA FEMA

On regulation of foreign exchange On management of foreign exchange Foreign exchange reserves positionsWith the improvement in foreign was not satisfactory for that exchange reserves such stringent stringent controls were required on controls are not required now. the use of foreign exchange Need to take permission of RBI in No need for seeking the connection with remittances permission of RBI in connection involving external trade with remittances involving external trade except section3 relates to dealing in foreign exchange These restrictions on drawals of foreign exchange for the purpose current account transactions Section 5, it removes all the restrictions on drawals of foreign exchange for the papoose of current account transactions

Permission

Restrictions

Violations of Rules

Violations of FERA was treated as Violations of FEMA treated as criminal offence and burden of civil offence removes the threat proof was on the guilty of imprisonment compared their illegal acts by paying a fine (not too high)