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FEMA – How much do you know about it?

FOREIGN EXCHANGE AND MANAGEMENT ACT (FEMA)

FEMA is a regulatory mechanism that enables the Reserve Bank of India and the Central Government to pass regulations and rules relating to foreign exchange in tune with the Foreign Trade policy of India. It is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”

Forex Market is a very vast area and is full of potentials. SWIFT is the Society for Worldwide Interbank Financial Telecommunication, a member-owned cooperative through which the financial world conducts its business operations with speed, certainty and confidence. It is an important body in foreign exchange. The offences commited under this Act fall under the category of civil offences. It also paved the way for the introduction of the Prevention of Money Laundering Act 2002.

Main regulations under FEMA:

-Foreign Exchange Management (Current Account Transactions) Rules, 2000
-Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000
-Foreign Exchange Management (Transfer or Issue of any Foreign Security) regulations, 2004
-Foreign Exchange Management (Foreign currency accounts by a person resident in India)Regulations, 2000
-Foreign Exchange Management (Acquisition and transfer of immovable property in India) regulations, 2000
-Foreign Exchange Management (Establishment in India of branch or office or other place of business) regulations, 2000
-Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000
-Foreign Exchange Management (Export of Goods and Services) regulations, 2000
-Foreign Exchange Management (Realisation, repatriation and surrender of Foreign Exchange)regulations, 2000
-Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000
-Foreign Exchange (compounding proceedings) rules, 2000

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