The document discusses the Foreign Exchange Regulation Act (FERA) and its replacement, the Foreign Exchange Management Act (FEMA). FERA imposed strict controls on foreign exchange transactions and was considered draconian. FEMA was passed in 1999 to facilitate foreign trade and payments by making offenses civil rather than criminal. It aims to promote an orderly foreign exchange market. FEMA regulates capital account transactions like foreign security transfers which require RBI permission. It also governs current account transactions like exports and payment/receipts, which generally don't require prior approval. Exporters must ensure full payment is received or a value determined by RBI.

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2. RAVI SHEKHAR (MBA) GICTS GWALIOR

3. (FERA) was passed by the Indian
Parliament in 1973 by the government
of Indira Gandhi and came into force with
effect from January 1, 1974. FERA imposed
stringent regulations on certain kinds of
payments, the dealings in foreign exchange
and securities and the transactions which
had an indirect impact on the foreign
exchange and the import and export of
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4. WHAT IS FEMA?
• The Foreign Exchange Management
Act (FEMA) 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.[
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5. Investing in India
Government Route
Automatic Route
(FIPB)
General Rule
No prior Permission Required
Only informing RBI within 30 days Prior Permission Required
of issue and reciept of funds
MAHESHWARI & CO. Advocates & Legal
Consultants 5

6. FERA & FEMA
• Object to conserve • To facilitate external
and prevent misuse. trade and payment.
• It was a draconian • It is a civil law.
police law.
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7. OBJECTIVES
• The objectives 0f FEMA are :
To facilitate external trade
and payments.
To promote the orderly
development and maintenance
of foreign exchange market
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8. Dealing in foreign exchange, ACT.
• (a) transfer any foreign exchange or foreign
security to any person not being an authorized
person;
• (b) make any payment to or for the credit of any
person resident outside India in any manner;
• (c) receive otherwise through an authorized
person, any payment by order or on behalf of any
person resident outside India in any manner.
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9. Current Account Transactions
• Any person may sell or draw foreign exchange
to or from an authorized person if such sale or
drawl is a current account transaction.
• The Central Government may, in public
interest and in consultation with the Reserve
Bank, impose such reasonable restrictions for
current account transactions as may be
required from time to time.
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10. Capital account transactions
Transfer or issue of any foreign security
by a person resident in India.
Deposit between persons resident in
India and person resident outside India.
Any person may sell or draw foreign
exchange to or from an authorised
person for a capital account transaction
permitted by the RBI in consultation
restrictions in public interest.
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11. Holding of foreign exchange, ACT
• Save as otherwise provided in this
Act, no person resident in.
• India shall acquire, hold, own,
possess or transfer any foreign
exchange, foreign security or any
immovable property situated outside
India.
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12. Export of goods and services
(1) The Reserve Bank may, for the purpose of
ensuring that the full export value of the
goods or such reduced value of the goods
as the Reserve Bank determines, having
regard to the prevailing market conditions,
is received without any delay, direct any
exporter to comply with such requirements
as it deems fit.
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13. Export of goods and services conti………
• (2) Every exporter of services shall
furnish to the Reserve Bank or to
such other authorities a declaration
in such form and in such manner as
may be specified, containing the true
and correct material particulars in
relation to payment for such services
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14. ,
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