Fema policy

1. Foreign Exchange
Management Act
(FEMA), 1999

2. History
 FERA,1947
 FERA,1947 FERA ,1973 FEMA,1999

3. FEMA
 In India, all transactions that include foreign exchange are regulated by the
Foreign Exchange Management Act (FEMA), 1999.
 It repealed the Foreign Exchange Regulations Act (FERA),1973.
 FEMA has been enacted to facilitate external trade and payments and to
promote the orderly development and maintenance of foreign exchange
market.
 It applies to all branches, offices and agencies outside India, owned or
controlled by a person resident in India.
https://theintactone.com/2019/02/11/be-u4-topic-5-fema/

4. foreign exchange
 According to the Act, the term 'foreign exchange' means "foreign currency and
includes:- (i) deposits, credits and balances payable in any foreign currency;
(ii) drafts, travellers cheques, letters of credit or bills of exchange, expressed
or drawn in Indian currency but payable in any foreign currency; (iii) drafts,
travellers cheques, letters of credit or bills of exchange drawn by banks,
institutions or persons outside India, but payable in Indian currency".

5. objectives
1.Facilitation
a) external trade
b) external payments.
2. Promotion
a) orderly development of foreign exchange market.
b) orderly maintenance of foreign exchange market.

6. FEMA APPLICABILITY
 WHOLE OF INDIA
 ALL BRANCHES,OFFICES AMD AGENCIES OUTSIDE INDIA OWNED OR
CONTROLLED BY A PERSON RESIDENT IN INDIA.
 CITIZENS OF INDIA WHO ARE OUTSIDE INDIA UNLESS THEY ARE RESIDENT OF
INDIA

7. CONTROLLING AND IMPLIMENTING

8. FEATURES/ PROVISIONS
1)Foreign exchange or securities
It permits only authorised person to deal in foreign exchange or foreign security. Such an
authorised person, under the Act, means authorised dealer, money changer or any
other person for the time being authorised by Reserve Bank. The Act thus prohibits any
person who:-
 Deal in or transfer any foreign exchange or foreign security to any person not being an
authorized person
 Make any payment to or for the credit of any person resident outside India in any
manner;
 Receive otherwise through an authorized person, any payment by order or on behalf of
any person resident outside India in any manner;
 Enter into any financial transaction in India as consideration for or in association with
acquisition or creation or transfer of a right to acquire, any asset outside India by any
person;

9. 2)Holding of foreign exchange,
 NO PERSON, resident in India , shall acquire, hold own, posses or transfer any
foreign exchange, foreign security or any immovable situated outside India
without the permission of India.
3)Capital account transactions
Any person may sell or draw foreign exchange to or from an authorised person for
a capital account transaction. The RBI may , in consultation with the Central
Government, specify any class or classes of capital account transactions which
are permissible and limit up to which foreign exchange shall be admissible for
such transaction.

10. 4)Current account transactions
 Any person may sell or draw foreign exchange to or from an authorised person if such sale or
drawl is a current account transaction.
 Non repatriated transactions
 Regulated by RBI
5)Export of goods and services
Every exporter of goods and services shall furnish to RBI details regarding the export value of
such goods and services.
6)Realization and repatriation of foreign
exchange
Where any amount of foreign exchange is due or accured to any person resident in India, such a
person shall take steps to realise and repatriate to India, such foreign exchange within a specific
period of time.

11. Contravention and penalties
 For any kind of contravention under this act is liable to a penalty up to thrice
the amount involved where it is quantifiable or rs.2lakhs where it is not
quantifiable.
 Such contravention is continuing one, further penalty which is extend to five
thousand rupees for every day after the first day during which contravention
continues.
 A person will be liable to civil imprisonment only if he does not pay the fine
within 90 days from the date of notice and that too after formalities of show
case notice and personal hearing.
 If he does not respond to the notice, there can be a warrant of arrest.

12. Administration of the Act
 The rules, regulations and norms are laid down by the RBI in consultation with
Central Gov.
 Central Gov. appoint as many officers of Central Gov. as Adjudicating
Authorities for holding inquiries.
 There is a provision to appoint one or more Special Director to hear appeals
against the order of Adjudicating Authorities
 Central Gov. shall also establish an Appellate Tribunal to hear against the
order of Adjudicating Authorities and Special Director .
 FEMA provides a Director of Enforcement with a director and such other
officers or class officers as it thinks fit for taking up investigation and
contraventions under Act.

13. Start Ups in India
 https://theintactone.com/2021/02/07/start-ups-in-india/

14. Skill Development
 https://theintactone.com/2021/02/07/skill-development/

15. Thrust on Make in India
 https://theintactone.com/2021/02/07/thrust-on-make-in-india/

16. Monetary policy
 Monetary policy, the demand side of economic policy, refers to the actions
undertaken by a nation's central bank to control money supply and
achieve macroeconomic goals that promote sustainable economic growth.
 Types of Monetary Policies
1.Expansionary
2. Contractionary
https://theintactone.com/2019/02/11/be-u4-topic-4-monetary-and-fiscal-policies/
https://www.investopedia.com/terms/m/monetarypolicy.asp

17. Fiscal Policy
 "Fiscal policy" is the term used to describe the actions a government takes to
influence an economy by purchasing products and services from businesses
and collecting taxes. It also refers to the economic intent behind the
decisions for how the money is used.
https://www.investopedia.com/terms/f/fiscalpolicy.asp