Bissoy.com
Doctors Medicines MCQs Q&A

What is FEMA?

What is FEMA? Correct Answer Foreign Exchange Management act

FEMA stands for Foreign Exchange Management act.

Key PointsForeign Exchange Management act:

  • FEMA- ​Foreign Exchange Management Act
  • In India, all transactions that included foreign exchange were regulated by Foreign Exchange Regulations Act (FERA),1973.
  • But as the liberalization approached in India, FERA was replaced by a new Act called the Foreign Exchange Management Act (FEMA),1999. This Act applies to all agencies outside India, owned or controlled by a person resident in India.
  • The objectives of FEMA are:
    • To facilitate external trade and payments; and
    • To promote the orderly development and maintenance of the foreign exchange market.
  • An only authorized person is permitted to deal in foreign exchange or foreign security as per FEMA.
  • An authorized person, under this Act, means authorized dealer, money changer, off-shore banking unit, or any other person for the time being authorized by Reserve Bank.
  • Foreign exchange transactions are put into two categories as per FEMA - capital account and current account.

Related Questions

In November 2017, RBI simplified ‘FEMA’ by putting all amendments under one notification. What does ‘E’ stand for in ‘FEMA’
Assertion (A): Reserve Bank of India is an important regulatory and administrative authority to execute FEMA provisions. Reason (R): Being monetary authority and custodian of foreign exchange, Reserve bank of India enjoys requisite expertise of FEMA administration. In the context of the above two statements, which one of the following option is correct?
Two statements are followed by two Conclusions I and II. You have to consider the statements to be true, even if they seem to be at variance from commonly known facts. You are to decide which of the given conclusions can definitely be drawn from the given statements and indicate your answer accordingly. Statements: I. The Enforcement Directorate (ED) has sought information on offshore investments by directors of RNT Associates, a closely held firm which functions as a family office and investment vehicle of Ratan Tata.  II. The ED order, dated June 14, also calls for details of investments or loans from RNT Associates and its directors to a Singapore-based entity, RNT Associates Ltd. Conclusions: The order is under provisions of the Foreign Exchange Management Act (FEMA) and the documents are being sought for the purpose of investigation under FEMA. The nature of queries from Enforcement Directorate is related to RNT Associates’ investment portfolio. It is compliant with all disclosures and existing laws governing investments and is extending all cooperation.
In November 2017, RBI simplified FEMA by putting all amendments under one notification. What does E stand for in FEMA?
Assertion (A): Under FEMA, the receiver of laundered money is to be made culpable, instead of sender/distributor.
Reason (R): FEMA differs from the earlier Exchange Regulation Act FERA with regard to penalties and punishment in case of violation of the act.
Assertion (A): Reserve Bank of India is an important regulatory and administrative authority to execute FEMA provisions.
Reason (R): Being monetary authority and custodian of foreign exchange, Reserve Bank of India enjoys requisite expertise of FEMA administration.
In the context of the above two statements, which one of the following option is correct?
The Foreign Exchange Management Act(FEMA) was passed in:
When was Foreign Exchange Management Act (FEMA) passed by parliament of India?
What is the full form of FEMA ?
In a certain code language, 'forak klol loak' means 'tie the knot', 'klol seda fema' means 'the sharp knife', and 'loak goak woak' means 'blue neck tie'. Which is the word for 'forak' in that code language?