Foreign Exchange Management Act (fema)

Foreign Exchange Management Act (FEMA) 1. 2. 3. 4. 5. 6.

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The Foreign Exchange Management Act (FEMA) was implemented in the year 1999. It replaced the Foreign Exchange Regulation Act (FERA),1973 RBI is the regulatory authority for FEMA. The Act provides for entities to be authorized either as authorized dealers or as money changers. Money changers can either be full-fledged or restricted. Full-fledged- Authorized to buy and sell foreign exchange whereas restricted money changers can only buy the foreign exchange. Money changers can only deal in notes, coins and traveler’s cheques. Authorized dealers are allowed to deal in all the items classified as foreign exchange by FEMA

Foreign Exchange-Meaning •

Foreign Exchange is defined in terms of Sec.2 of FEMA, as foreign currency including: ii. All deposits, credits, balance payable in any foreign currency iii. Any drafts, travelers’ cheques, letters of credit and bills of exchange expressed or drawn in Indian currency and payable in foreign currency; iv. Any instrument giving anyone the option of making it payable either partly or fully in a foreign currency.