FOREIGN EXCHANGE MANAGEMENT ACT(FEMA)

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INTRODUCTION

In pursuit of certain objectives and pending legislative changes, some important steps were taken to reduce rigours of FERA (Foreign exchange regulation Act,1973) through notifications issued by RBI. The need for a comprehensive review of FERA was thus evident. The change in economic policy especially, liberalization, and the moves to open up the

The important changes are summarized below :

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The important changes are summarized below :

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The important changes are summarized below :

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The important changes are summarized below :

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The important changes are summarized below :

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FROM FERA TO FEMA

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On August 4,1998, Finance minister introduced the FOREIGN MANAGEMENT BILL in Lok Sabha. FEMA outlived its utility on account of significant development since 1993(such as increase in foreign trade, liberalization of Indian investment abroad ,etc.) FEMA has simplified the definition of a person resident in India.

FEMA seeks to establish a more liberal and orderly framework conducive to economic growth by limiting its ambit to :

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Current account transactions ; payments due as interest on loans and as net income from investments; remittances for living expenses of parents , spouse , children living abroad. Capital account transactions of persons resident in India or assets or liabilities in India of persons resident outside India. Export of Goods and Services. Realization and Repatriation of foreign exchange.

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Exemption from realization and repatriation in cases like possession of foreign currency or foreign coins by any person up to limit specified by RBI.

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FEMA ACT ,1999

The main objective of this ACT is to consolidate and amend the law relating to foreign exchange with a view to facilitate external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

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The main provisions of this act are :

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The main provisions of this act are :

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The main provisions of this act are :

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