Foreign Exchange Management Act, 1999: Objectives
FOREIGN EXCHANGE MANAGEMENT ACT, 1999
- Economic Liberalization
- FERA 1973 was reviewed in 1993
- Task Force set up - Submitted Report in 1994 - Resulted in FEMA
- Changes in Economy 1) Substantial increase in Foreign Exchange Reserves 2) Growth in Foreign trade 3) Rationalization of Tariffs 4) Current Account convertibility 5) Liberalization of Indian investments abroad 6) Increased access to external commercial borrowings 7) Participation of Financial Institutional Investors in our Stock Markets
OBJECTS
1) To consolidate and amend law relating to Foreign Exchange
2) Facilitation of external trade and payments
3) Promoting the orderly development and maintenance of Foreign Exchange market in India
EXTENSION
- Whole of India
APPLICATION
- All Branches, Offices and Agencies outside India owned or controlled by a person resident in India
- Any contravention committed outside India by any person to whom the Act applies
DEFINITIONS
1) Sec. 2(c) : ‘AUTHORISED PERSON’ - means an authorized dealer, money changer, off-shore banking unit, any person authorized under Sub-Sec. (1) of Sec. 10 to deal in foreign exchange or securities
2) Sec. 2(e) : ‘CAPITAL ACCOUNT TRANSACTION’ - means a transaction which alters the assets and liabilities, including contingent liabilities outside India of persons resident in India or assets or liabilities in India of persons resident outside India and includes transactions under Sec. 6(3)
3) Sec. 2(h) - ‘CURRENCY’ includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travellor cheques, letter of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by Reserve Bank
4) Sec. 2(i) - ‘CURRENCY NOTES’ means and includes cash in the form of coins and bank notes
5) Sec. 2(j) - ‘CURRENT ACCOUNT TRANSACTION’ means a transaction other than a Capital Account Transaction and without prejudice to the generality
- Economic Liberalization
- FERA 1973 was reviewed in 1993
- Task Force set up - Submitted Report in 1994 - Resulted in FEMA
- Changes in Economy 1) Substantial increase in Foreign Exchange Reserves 2) Growth in Foreign trade 3) Rationalization of Tariffs 4) Current Account convertibility 5) Liberalization of Indian investments abroad 6) Increased access to external commercial borrowings 7) Participation of Financial Institutional Investors in our Stock Markets
OBJECTS
1) To consolidate and amend law relating to Foreign Exchange
2) Facilitation of external trade and payments
3) Promoting the orderly development and maintenance of Foreign Exchange market in India
EXTENSION
- Whole of India
APPLICATION
- All Branches, Offices and Agencies outside India owned or controlled by a person resident in India
- Any contravention committed outside India by any person to whom the Act applies
DEFINITIONS
1) Sec. 2(c) : ‘AUTHORISED PERSON’ - means an authorized dealer, money changer, off-shore banking unit, any person authorized under Sub-Sec. (1) of Sec. 10 to deal in foreign exchange or securities
2) Sec. 2(e) : ‘CAPITAL ACCOUNT TRANSACTION’ - means a transaction which alters the assets and liabilities, including contingent liabilities outside India of persons resident in India or assets or liabilities in India of persons resident outside India and includes transactions under Sec. 6(3)
3) Sec. 2(h) - ‘CURRENCY’ includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travellor cheques, letter of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by Reserve Bank
4) Sec. 2(i) - ‘CURRENCY NOTES’ means and includes cash in the form of coins and bank notes
5) Sec. 2(j) - ‘CURRENT ACCOUNT TRANSACTION’ means a transaction other than a Capital Account Transaction and without prejudice to the generality