What is the role of Foreign Exchange Management Act?

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.

What are the aims and objectives of the Foreign Exchange Management Act 1999?

Objectives of FEMA: The main objective of FEMA was to help facilitate external trade and payments in India. It was also meant to help orderly development and maintenance of the foreign exchange market in India. It defines the procedures, formalities, dealings of all foreign exchange transactions in India.

What is Foreign Exchange Management Act 2000 explain the main provision of this act?

This law’s main objective is to increase the flow of foreign exchange in India. Now , under this law , you can bring foreign currency in India without any legal barrier . According to section 3 of FEMA 2000 ,” only authorized person under the govt. terms can deal in foreign exchange in India .

What are the main provisions of Foreign Exchange Management Act 1999?

Provisions of Foreign Exchange Management Act (FEMA) provides free transaction on current account subject to the guidelines by the RBI. Enforcement of Foreign Exchange Management Act (FEMA) is entrusted to a separate directorate, which undertakes investigations on contraventions of the Act.

What is the meaning of foreign exchange management?

Foreign exchange management is the process of limiting a company’s exposure to foreign currency fluctuations. In most cases, this is done by companies that engage in foreign trade.

How does foreign exchange regulation act work critically analyze the statement?

FERA – the four-letter acronym for Foreign Exchange Regulation Act is a legislation that came into existence in 1973 with the purpose to regulate certain dealings in foreign exchange, impose restrictions on certain kinds of payments and to monitor the transactions impinging the foreign exchange and the import and …

What do you mean by foreign exchange management?

What was the motive of the introduction of FEMA Act?

Objectives of FEMA The main objective for which FEMA was introduced in India was to facilitate external trade and payments. In addition to this, FEMA was also formulated to assist orderly development and maintenance of the Indian forex market.

Why did FEMA replace Foreign Exchange Regulation Act?

FERA, thus, severely regulated all forex transactions that had a direct or indirect impact on India’s forex reserves, which included the import and/or export of currency. However, the objective of FERA did not quite have the effect that was envisioned and the Indian economy continued Hence it was replaced by FEMA.

What do you understand by foreign exchange management?

What are the salient features of Foreign Exchange Management Act?

Main Features of Foreign Exchange Management Act, 1999 It gives powers to the Central Government to regulate the flow of payments to and from a person situated outside the country. All financial transactions concerning foreign securities or exchange cannot be carried out without the approval of FEMA.

Why was Foreign Exchange Management Act 1999 FEMA enacted given its objectives and reasons?

FEMA. FERA was implemented to regulate foreign payments and to ensure optimum use of foreign currency in India. FEMA aims to promote foreign trade, foreign payments and to increase the size of foreign exchange reserve in the country. It is an old enactment and was approved by the Parliament in the year 1973.

What is the purpose of foreign exchange Management Act 1999?

THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 ACT NO. 42 OF 1999 [29th December, 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.

What is FEMA’s role in foreign exchange market?

According to the official order, FEMA would “consolidate and amend the law relating to foreign exchange (forex) with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”.

What is the purpose of the Foreign Exchange Act of India?

FEMA streamlines the procedures and formalities for dealing with all the foreign exchange transactions within India. However, foreign exchange transactions are classified into two categories- As per to the act, the actual payment balance keeps the record of the business of assets, goods, and services.

What is the Foreign Exchange Regulation Act 1973?

Foreign Exchange Regulation Act. The Foreign Exchange Regulation Act (FERA) was legislation passed in India in 1973 that imposed strict regulations on certain kinds of payments, the dealings in foreign exchange (forex)and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency.