Discuss the key differences between the Foreign Exchange Regulation Act, 1973 (FERA), and the Foreign Exchange Management Act, 1999 (FEMA).
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Foreign Exchange Management ActSubjectiveQuestion 5748 of 6
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Detailed Solution & Explanation
The Foreign Exchange Regulation Act, 1973 (FERA), was enacted to regulate certain transactions in foreign exchange and for the conservation and proper utilisation of foreign exchange. However, FERA had several drawbacks and was later repealed and replaced by the Foreign Exchange Management Act, 1999 (FEMA). FEMA is more liberal and allows for greater flexibility in foreign exchange transactions. The key differences between FERA and FEMA include the shift from a restrictive to a facilitative framework, the abolition of the Foreign Exchange Regulation Act's requirement for permission from the Reserve Bank for current account transactions, and the introduction of the concept of 'authorised persons' who are permitted to deal in foreign exchange.
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More Questions from Foreign Exchange Management Act
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Explain the provisions of Section 6 of the Foreign Exchange Management Act, 1999, regarding the transfer or issue of any foreign security.
Analyse the provisions of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, as amended, and their impact on foreign investment in India.
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