Fema/ Fera
HARITHA
Foreign Exchange Regulation Act (FERA) BASIC CONCEPTS & DEFINATIONS FERA is an act to regulate dealings in foreign exchange and foreign securities with the objective of conservation of foreign exchange resources of India and its proper utilization in the economic development of India. It extends to whole of India and applies to all the citizens of India, outside India as well as in India and to branches and agencies of Indian companies or body corporates, outside India. FERA is a very stringent act. Unlike other laws where everything is permitted unless specifically prohibited, under FERA nothing is permitted unless specifically permitted. Hence the tenor and tone of the Act is very drastic. It provides for imprisonment for violation of even a very minor offense. Under this act, a person is presumed guilty unless he proves himself innocent whereas under other laws, a person is presumed innocent unless he is proven guilty. Therefore one has to be very careful while dealing in foreign exchange and ensure that all legal compliances are carried out. With liberalization, there has been a move to remove the drastic measures of FERA and replace it with a set of liberal foreign exchange management regulations. A draft of the Foreign Exchange Management Bill (FEMA) has been prepared by the Government of India to replace FERA keeping in view the liberal spirit of the Indian economy. However, until FEMA is enacted, the provisions of FERA apply. FERA contains definitions of certain terms which have been used throughout the Act. Their meaning of these terms may differ under other laws or under common language. But for the purposes of FERA, the terms will signify the meaning as defined thereunder. Let us take up some of the more important ones. Authorized dealer means a person for the time being authorized by the Reserve Bank of India (RBI) under section 6 to deal in foreign exchange. Bearer certificate means a certificate of title to
Foreign Exchange Regulation Act (FERA) BASIC CONCEPTS & DEFINATIONS FERA is an act to regulate dealings in foreign exchange and foreign securities with the objective of conservation of foreign exchange resources of India and its proper utilization in the economic development of India. It extends to whole of India and applies to all the citizens of India, outside India as well as in India and to branches and agencies of Indian companies or body corporates, outside India. FERA is a very stringent act. Unlike other laws where everything is permitted unless specifically prohibited, under FERA nothing is permitted unless specifically permitted. Hence the tenor and tone of the Act is very drastic. It provides for imprisonment for violation of even a very minor offense. Under this act, a person is presumed guilty unless he proves himself innocent whereas under other laws, a person is presumed innocent unless he is proven guilty. Therefore one has to be very careful while dealing in foreign exchange and ensure that all legal compliances are carried out. With liberalization, there has been a move to remove the drastic measures of FERA and replace it with a set of liberal foreign exchange management regulations. A draft of the Foreign Exchange Management Bill (FEMA) has been prepared by the Government of India to replace FERA keeping in view the liberal spirit of the Indian economy. However, until FEMA is enacted, the provisions of FERA apply. FERA contains definitions of certain terms which have been used throughout the Act. Their meaning of these terms may differ under other laws or under common language. But for the purposes of FERA, the terms will signify the meaning as defined thereunder. Let us take up some of the more important ones. Authorized dealer means a person for the time being authorized by the Reserve Bank of India (RBI) under section 6 to deal in foreign exchange. Bearer certificate means a certificate of title to