The Foreign Exchange Management Act, 1999 has come into effect on June, 1 2000 replacing the Foreign Exchange Regulation Act, 1973.

1. FEMA
Foreign Exchange management Act, 1999

2. Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
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3. Introduction
• The Foreign Exchange
Management Act, 1999
has come into effect on
June, 1 2000 replacing
the Foreign Exchange
Regulation Act, 1973.

4. Objective
• The object of the Foreign
Exchange Management
Act, 1999 is to facilitate
external trade and
payments and to promote
orderly maintenance of
the foreign exchange
market in India.

5. Regulation and Management of
Foreign Exchange
• Dealings in Foreign
exchange - The act
permits dealings in
foreign exchange only
through an authorized
person.

6. Regulation and Management of
Foreign Exchange
• Holding of Foreign exchange
– No person resident in India
shall acquire, hold, own,
possess or transfer any
foreign exchange, foreign
security or any immovable
property situated outside
India.

7. Regulation and Management of
Foreign Exchange
• Regulations on current
Account Transaction –
Generally, all current
account transaction are
free unless specifically
restricted by government
of India.

8. Regulation and Management of
Foreign Exchange
• Regulations of Capital
Account Transactions –
The Reserve bank in
consultation with the
Central Government,
specify the permissible
capital account
transaction and the
limits up to which foreign
exchange be allowed for
such transactions.

9. Regulation and Management of
Foreign Exchange
• Export of goods and
services – Every exporter
of goods or services shall
furnish to Reserve Bank or
to such other authority a
declaration, in such form
and in such manner as
may be specified,
containing true and
correct material particulars
including the amount
representing the full
export value of the goods
or services.

10. Regulation and Management of
Foreign Exchange
• Realization and
repatriation of foreign
exchange – Where any
amount of foreign
exchange is due or has
been accrued to any
person resident in India,
such person should take all
reasonable steps to realize
and repatriate to India
such foreign exchange,
within such time and in
such manner as may be
specified by Reserve Bank.

11. Authorized Person - Definition
• An authorized person
means an authorized
dealer, money changer,
off shore banking unit or
any other person for the
time being authorized
under section 10(1) to
deal in foreign exchange
or foreign securities.

12. Duties of Authorized person
– To comply with RBI
directions.
– Not to engage in
unauthorized
transactions.
– To ensure compliance of
FEMA provisions.
– Duty to produce books,
accounts etc.

13. Powers of authorized dealer
– To purchase or acquire or
borrow from or sell or
otherwise transfer or lend
or exchange with any
person, any foreign
exchange.
– Make payments to a
person in or resident in
India by order or on behalf
of any person resident
outside India.

14. Appeals
• The FEMA provides for a two tier
appellate machinery consisting of
Special Director (Appeals) and the
Appellate Tribunal for Foreign
Exchange.
• Appeals to special director lie in
cases where the orders of
adjudication are passed by an
Assistant Director of Enforcement
or a Deputy Director of
Enforcement.
• Appeals to Appellate Tribunal lie
in cases where the adjudication
orders are passed by the Director
of enforcement or the special
director of enforcement.