foreign exchange management act

4. FOREIGN EXCHANGE MARKET IN
INDIA
REGULATOR: RESERVE BANK OF INDIA
REGULATION FOREIGN EXCHANGE MANAGEMENT
ACT, 1999
AUTHORISED DEALERS, MONEY CHANGERS
BUYERS AND SELLERS : EXPORTERS, IMPORTERS,
INDIVIDUALS, CORPORATES, FIIs, NON-
RESIDENTS., NRIs ,ETC.

5. 3
• FERA Deals with laws which relate to foreign
exchange in INDIA.
•The laws were made to manage foreign
investments in INDIA.
• FERA consists of 81 complex sections.
•Under FERA, any offence was a criminal one
which included imprisonment as per code of
criminal procedure,1973.

6. FERA TO FEMA
• The main objective of FERA framed against the
background of severe foreign exchange problem and
controlled economic regime.
•Was conservation and proper utilization of the
foreign exchange resources of the country.
• FERA created flourishing black market in foreign
exchange.
•It brought into the economic lexicon the word
“HAWALA

7. The FOREIGN EXCHANGE MANAGEMENT ACT
was an act passed in the winter session of parliament
in 1999, which replaced FOREIGN EXCHANGE
REGULATION ACT.
This act seeks to make offenses related to foreign
exchange civil offenses. It extends to the whole of
INDIA.

9. TO WHOM THE ACT IS APPLICABLE?
• The FEMA is applicable-
- To the whole of India.
- Any branch, office and agency, which is situated
outside India, but is owned or controlled by a person resident
in India.
• Broadly speaking of FEMA, covers three different categories
and deals differently with them.
A. PERSON.
B. PERSON RESIDENT IN INDIA.
C. PERSON RESIDENT OUTSIDE INDIA.

10. OBJECTIVES OF FEMA
• To facilitate the external trade and payments.
• To promote of an orderly maintenance of the
exchange market in INDIA.
• Regulation of foreign capital in INDIA.

11. • To make strong and developed foreign
exchange market.
• Regulation of employment business and
investment of non-residents.
• To regulate foreign payments.
To remove imbalance of payment.

12. Functions of FEMA
Gives

13. SIMILARITIES BETWEEN FERAAND FEMA
• The RESERVE BANK OF INDIA and central
government would continue to be the regulatory
bodies.
• Presumption of extra territorial jurisdiction as
envisaged in section (1)of Fera has been retained.
• The Directorate of Enforcement continues to be the
agency for enforcement of the provisions of the law

14. FERA FEMA
FERA Consisted of 81 sections and was
more complex.
FEMA is much simple and consists of
only 49 sections.
Presumption of negative intension and
joining hands offence existed in FEMA.
These presumptions of Mens rea and
abatement have been excluded in FEMA.
Terms like capital account transaction, current
account transaction person service ,etc were not
defined in FERA.
Terms like capital account transaction, current account
transaction ,person ,service,etc. have been defined in det
in FEMA

15. Definition of authorized person
in FERA was a narrow one
The definition of authorized person
has been widened to include banks
,money changes of off shore
banking units, etc.
There was a big difference in the
definition of resident under
FERA, and income tax act.
The provision of FEMA are in
consistant with Income taxact, in
respect to the definition of term “
resident”