The foreign exchange management act (fema) was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation act this act seeks to make offences related to foreign exchange civil offences it extends to the whole of india the foreign exchange regulation act (fera) of 1973. The court distinguished renusagar on the grounds it dealt with a violation of fera the court held that fera and fema were based on materially different considerations and took completely different approaches to economic policy while fera sought to protect the economic interest of india, fema only. In the budget of 1997-98, the government had proposed to replace fera-1973 by fema (foreign exchange management act) it came into force on june 1, 2000 under the fema, provisions related to foreign exchange have been modified and liberalised so as to simplify foreign trade and payments. Foreign exchange management act (fema) foreign exchange management act was introduced in 2000 to create a valid lawful environment for the development of foreign exchange market in india atal bihari bajpayee government replaced fera with fema fera was no more compatible with new post-liberalization. Fema had become the need of the hour since fera had become incompatible with the pro-liberalisation policies of the government of india it brought a new management regime of foreign exchange consistent with the emerging framework of the world trade organisation (wto) it is another matter that. Underneath fera the movement, it was decided that the condition of “organize exchange” or “exchange parameters” should be applied on the contrary, fema stands for foreign exchange management act which was passed as a bill in indian parliament by the government in the year of 1999 the main. Smt dk tharadevi siddhartha vs electoral registration officer on 20 november, 2003 income tax returns and declarations under the fera and fema act , learned counsel submitted that the 3rd respondent has made provisions of the income tax, fera and fema act cannot be used or relied for interpreting the. Fema is to take the place of the `dreaded' foreign exchange regulation act, 1973 (fera) it is a matter of surprise and concern that a bill of such far- reaching implications should have had such scant attention and scrutiny from the professions, the press and parliament in contrast, the run-up to the.
Foreign exchange management act, 1999 (fema) emerged as a replacement or say an improvement over the old foreign exchange regulation act, 1973 (fera) foreign investors, frequently hear the terms fera and fema, when they deal with india as their name specifies, fera lays emphasis on the. Fera to fema – india signing article ix of the articles of imf, by which no new restrictions can be imposed by the nation on current account transaction • stated other way, india enjoys current account convertibility but yet to have capital account convertibility, although since economic reforms the limits under capital a/c. Trai ordinance promulgated 2 information technology bill, 1999 3 fera vs fema 4 companies (second amendment) bill proposes wide changes 6 legal snapshots 6 note from the editor the new year has brought with it a strong trend towards extensive legal reforms in india phase ii of the. Transactions in foreign exchange were absolutely prohibited excepting in certain selected sectors fera was repealed in 1998 and foreign exchange management act (fema) was enacted no unauthorised person would be allowed to deal in foreign exchange the authorised person could sell draw foreign exchange.
3 days ago the ed has issued a fema show cause notice to an alleged let operative and two delhi-based hawala dealers in connection with a terror financing bengani, it said, was a racketeer in hawala trade and a regular offender, and was earlier booked under the fera (now repealed) and a penalty of rs 50. Articles / views / expert opinions on foreign exchange law, fdi in real estate, foreign investments in indian stock market, ecb, nris returning to india, fema rules, rupee convertibility, prevention of money laundering. History and evolution for exchange market would also be discussed learning objectives: • forex market in india • forex market in india: a historical perspective • fera vs fema • pre-liberalization exchange rate regime in india and hawala market • brief introduction to currency convertibility in current & capital account.
The enforcement directorate is set to issue notices to scores of companies and individuals under the erstwhile foreign exchange regulation act (fera), with just three days to go for the expiry of the sunset clause under the foreign exchange management act (fema) a top finance ministry official ruled. The lesson explains the difference between fera and fema. In this lecture, we will be discussing the transition from fera - a “controlling” law to fema - a “managing” law.
Unlike other laws where everything is permitted unless specifically prohibited, under the foreign exchange regulation act (fera) of 1973 (predecessor to fema) everything was prohibited unless specifically permitted hence the tenor and tone of the act was very drastic it required imprisonment even for minor offences. Given india's progress towards a more open economy, it was only inevitable that the foreign exchange regulation act (fera) be reborn in a liberal, modern avatar the process received a push , with the cabinet approving the draft foreign exchange management act (fema) the draft reportedly relaxes.
Fera was enacted in september 1973 and it came in force from january 1, 1974 it was amended by the foreign exchange regulation (amendment) act 1993 and later in 2000, was replaced by fema fera applied to all citizens of india, all over india the idea was to regulate the foreign payments,. Fera and fema(foreign exchange regulation act and foreign exchange management act)presented by :-nikhil agarwalneha gargneha baliwalmegha singhmegha.
Similarities between fera and fema • the rbi and central government would continue to be the regulatory bodies • presumption of extra territorial jurisdiction as envisaged in section (1) of fera has been retained • the directorate of enforcement continues to be the agency for enforcement of the. The foreign exchange management act, 1999 ('fema'), brought in to keep pace with the changing dynamics of the indian economic polity repealed the foreign exchange regulation act, 1973 ('fera') and came into force on 1-6-2000 apart from removing criminal prosecution for non-compliance of. Fema started after the fera act was repealed ( fera was the previous trade policy that discouraged foreign currency in an economy and insulated the economy from being an open economy) as industrial reforms in 1991 replacing of fera with fema is. Here is the most important terms used in both banking and economics, fera and fema most of you might be well aware of these terms and their functioning know 7 most important points of fera and fema what is fera fera : the foreign exchange regulation act (fera) was legislation passed in 1973 that.