The Foreign Exchange Management Act (FEMA) of 1999 replaced the Foreign Exchange Regulation Act (FERA) of 1973. FEMA's objectives are to facilitate external trade and payments and promote an orderly foreign exchange market. It regulates transactions involving foreign exchange, external trade, payments, and transfers across borders. Major provisions include requiring RBI permission for various foreign exchange transactions, regulating holding of foreign currency and property abroad, and penalties for contravention of FEMA provisions.