A SEMINAR ON FOREIGN

EXCHANGE MANAGEMENT ACT

Dr. BUVANESWARI P
PROFESSOR – MBA
SJB INSTITUTE OF TECHNOLOGY
 Preamble
• Introduction
• Description
• Switch from FERA
• Objectives
• Rules / Regulations under FEMA
 Introduction
• 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.
• It was passed in the winter session of Parliament
in 1999, replacing the Foreign Exchange
Regulation Act (FERA).
 Description
• Unlike other laws where everything is
permitted unless specifically prohibited, under
the Foreign Exchange Regulation Act (FERA) of
1973 (predecessor to FEMA) everything was
prohibited unless specifically permitted.
 Switch from FERA
• FERA, in place since 1974, did not succeed in
restricting activities such as the expansion of
Multinational Corporations.
• After the amendment of FERA in 1993, it was
decided that the act would become the FEMA.
• This was done in order to relax the controls on
foreign exchange in India, as a result of. RBI’s
permission.
 Objectives
• To facilitate external trade and payments; and
• To promote the orderly development and
maintenance of foreign exchange market.
• The Act has assigned an important role to the
Reserve Bank of India (RBI) in the
administration of FEMA. The rules, regulations
and norms pertaining to several sections of
the Act are laid down by the Reserve Bank of
India, in consultation with the Central
Government.
 Rules / Regulations under FEMA
• Foreign Exchange Management (Current Account Transactions)
Rule, 2000.
• Foreign Exchange Management (Permissible Capital Account
Transactions) Regulations, 2000
• Foreign Exchange Management (Transfer or Issue of any Foreign
Security) regulations, 2004
• Foreign Exchange Management (Foreign currency accounts by a
person resident in India)Regulations, 2000
• Foreign Exchange Management (Acquisition and transfer of
immovable property in India) regulations, 2000
• Foreign Exchange Management (Establishment in India of branch
or office or other place of business) regulations, 2000
• Foreign Exchange Management (Manner of Receipt and Payment)
Regulations, 2000