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FEMA 2000

FEMA 2000. FERA was passed in 1973 to regulate the foreign exchange transactions. In the light of economic liberalisation, some changes were made in 1993. B ut still there was a lot of demand for modifications to FERA Finally FEMA came into effect from Janaury 1, 2000. Objectives.

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FEMA 2000

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  1. FEMA 2000

  2. FERA was passed in 1973 to regulate the foreign exchange transactions. • In the light of economic liberalisation, some changes were made in 1993. • But still there was a lot of demand for modifications to FERA • Finally FEMA came into effect from Janaury 1, 2000

  3. Objectives • To facilitate external trade and payments • To promote the orderly development and maintenance of foreign exchange market

  4. Provisions of Act • Dealing in foreign Exchange (SEC 3) • Holding of Foreign Excahnge (SEC 4) • Current account transactions(SEC 5) • Capital account transactions(SEC 6) • Export of goods and services(SEC 7) • Realisation and Repatriation(SEC 8)

  5. Exemption in certain cases (SEC 9) • Authorised Person (SEC 10) • Reserve banks powers to issue directions to Authorised Person (SEC 11) • Power of Reserve bank to India to inspect authorised person

  6. Penalties (SEC 13) • Any person who contravenes any provision of the act shall be liable to pay a penalty upto thrice the sum involved if the sum if quantifiable and upto 2 lakhs when the sum is not quantifiable. • If any person fails to make full payment of penalty imposed on him with in 90 days, he shall be liable for imprisonment (under SEC14)

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