India Currency Exchange
The FEMA replaced an earlier act, FERA (Foreign Exchange Regulation Act), with effect from June 1, 2000. The objective of the new Act is "facilitating external trade" and "promoting the orderly development and maintenance of foreign exchange market in India". The most significant feature of the new Act is that it provides legal basis to the current account convertibility. For purchase of foreign exchange for most of the current account transaction (with the exception of those listed in Schedule III to the Government of India Notification G.S.R. No 381(E) dated May 3, 2000) no permission from the Reserve Bank is required. Extensive powers are available to banks authorized to deal in foreign exchange , known as authorised dealers. Therefore, foreign exchange can be purchased for practically all transactions which are of current account nature. India Currency Exchange - FEMA DetailsTransactions that alter the assets and liabilities of a person resident in India or a person resident outside India have been classified as capital account transactions. All other transactions would be current account transactions. As FEMA is a major advancement in Indian legislation and has succeeded in
As many of the regulations are new and have been effect only since June 2000, the Central Bank has been continuously publishing information on the FEMA as part of it's public service. As part of that public service, there are dedicated web pages available for the FEMA act, located at the Reserve Bank of India website (opens up a new window). |