Bank Theory

Banker-Foreign Exchange Remittance Facilities Banker-Foreign Exchange Remittance Facilities for Individuals Evolution of FEMA The Foreign Exchange Management Act (FEMA), 1999 replaced the earlier FERA (Foreign Exchange Regulation Act), 1973. FEMA was enacted to facilitate external trade and payments and to promote the orderly development and maintenance of the foreign exchange market in India. It represents a shift from regulation to management, emphasizing liberalization and decriminalization of foreign exchange laws. Definitions under FEMA Authorized Person: Any person authorized by the RBI to deal in foreign exchange or foreign securities. Capital Account Transaction: A transaction that alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or inside India of persons resident outside India. Current Account Transaction: Transactions other th...

Before going to main point I want to share with you some important point about FERA 1973 and FEMA 1999. Before going to main point I want to share with you some important point about FERA 1973 and FEMA 1999. Well, Foreign Exchange Management Act or FEMA was passed in the winter session in the year 1999 and replace the previous Foreign Exchange Regulation Act 1973. Government of India Replace the FERA act because of Liberalization policy taken by Government. Under FERA 1973 every foreign transaction were prohibited unless specifically permitted. Under other laws “A persons presumed innocent unless he is proven guilty” but under FERA 1973 “A person presumed guilty unless he proved himself innocent” (Source: Wikipedia.com) Under new act FEMA 1999 all current account transaction are permitted but some restriction applied on Capital account transaction. That’s why Indian currency is partially convertible. Ooo. You think about Current account and Ca...