04/26/10 By Akash Saxena

Presentation 
on 
Foreign Exchange 
Management Act, 1939

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Foreign Exchange Management Act, 1939

INTRODUCTION

04/26/10 By Akash Saxena

Ø Foreign Exchange Management Act was 1st introduced in
September, 1939 in INDIA.
Ø
Ø For the smooth functioning FEMA was converted into
Foreign Exchange Regulation Act in 1973.
Ø
Ø27 year later FERA was replaced in FEMA by the few
problems in 1st June, 2000.

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 Cont……
Ø

04/26/10 By Akash Saxena

Ø Specially the Foreign Exchange Regulation was firstly
introduced in 1947 and converted in FERA in 1973 and
in the end replaced by FEMA in June 1st , 2000.
Ø

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 Uses of FEMA

04/26/10 By Akash Saxena

Ø This act was introduced for the foreign exchange regulation
on outside the India by the Indian companies and in India
by the Foreign companies.
Ø
Ø The FEMA was introduced specially for facilitate the external
trade and payments.

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 Cont……

04/26/10 By Akash Saxena

Ø FEMA had assigned the RBI for the administration of this
Act and working with Central Government Employees for
holding the enquires.
Ø
Ø
ØSpecially
the FERA was introduced for the control of all the
economic activities by the proper utilization of Foreign
Exchange resources.

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 Foreign Exchange

04/26/10 By Akash Saxena

Ø Foreign exchange means the dealings of import and export
from our country to another country or from other country
to our country by the currency of the other country and our
nation.
Ø Special points for foreign exchange:
vDeposits
vCheques
vCredit
vBills Payable
vBills receivable

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 Foreign Currency

04/26/10 By Akash Saxena

Ø Foreign currency means any currency other than Indian
currency.
 (OR)
Ø According to Section 6(4) a person resident in India may
hold, own transfer or invest in foreign currency situated
outside India, if such currency was acquired , held or
owned by such person when he was residing outside India
or inherited from a person who was residing outside India.

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 Foreign Security

04/26/10 By Akash Saxena

Ø Foreign security means any security in the form of shares,
bonds, stocks, debentures or any other instruments
expressed in foreign currency.
 (OR)
Ø According to Section 6(4) a person resident in India may
hold, own transfer or invest in foreign security or property
situated outside India, if such security or property was
acquired , held or owned by such person when he was
residing outside India or inherited from a person who was
residing outside India.

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 Person

04/26/10 By Akash Saxena

ØA person includes:
qAn individual
qA company
qA firm
qAn association of person or body of individuals
qAny agency
qOffice or branch owned or controlled by such person.

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 Authorized Person

04/26/10 By Akash Saxena

Ø According to Section 2(c) an authorized person means an
authorized dealer, moneychanger, or any other person
authorized under the act to deal in foreign exchange.
Ø
Ø An authorization Under this section shall be in writing and
shall be subject to the conditions laid down therein.
Ø
Ø An authorization under sub section (1) may be revoked by the
Reserve Bank Of India at any time if the RBI is satisfied.
Ø
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 Person Resident in India

04/26/10 By Akash Saxena

Ø A person residing in India for more than 182 days during the
course of the proceeding financial year but does not
include:
1. A person who has gone out of India or who stays outside
India in either case:
I. For taking up employment outside India.
II.For carrying on outside India a business or vacation outside
India.
III.For any other purpose, if it is indicated that his intention to
stay outside India for an uncertain period.
4. 11
 Cont……

04/26/10 By Akash Saxena

2. A person who has come or stays in India, in either case:
I. For taking up employment in India.
II.For carrying a business or vacation in India.
III.Any office, branch or agency in India owned or controlled
by a person resident outside India.
IV.For any other purpose if is indicated that his intention to stay
in India for an uncertain period.
3. Person resident outside India means a person who is not
resident in India.


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I.
 Extend and Application of FEMA

04/26/10 By Akash Saxena

Ø It applies to all over India expect Jammu & Kashmir.
Ø
Ø It applies to all branches.

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 Few important Branches

04/26/10 By Akash Saxena

1.
 Dealing in Foreign Exchange:
 No person accept with the general or special permission
of
RBI shall deal in or transfer any foreign exchange.

2.
 Holding of Foreign Exchange:
 Without the permission of RBI no person resident in
India
shall hold, own or transfer any foreign exchange or acquire

any immovable property outside India.


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 Cont……

04/26/10 By Akash Saxena

3.
 Export of Goods & Services:
 Before exporting the goods & services shall have to take
the permission of Reserve Bank Of India. And every

information should be true.

4. Realization & Repatriation of Foreign Exchange:

 (The native returning to the native place.)
A person resident in India shall take all the reasonable step to

realize and repatriate the Foreign Exchange but only under the

consideration of RBI.

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 Contravention & Penalties

04/26/10 By Akash Saxena

1.
 Penalties for Contravention:
Ø Under FEMA the penalties is thrice the sum involved .
Ø
Ø If the contravention continue then the penalty of Rs. 5000 per
day shall be imposed.


2.
 Enforcement of orders on adjudicating Authority (AA):
Ø If a person fails to make payment of penalty within 90 days
then he is liable for civil imprisonment.
Ø
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 Cont……

04/26/10 By Akash Saxena

Ø
Ø The civil imprisonment is up to 3 years.(If the penalty has not
been given by the person in time)
Ø
Ø In case of non payment the imprisonment can be exceed
according to the desire of the authority.
Ø
Ø The arrest warrant can also be issued by the authority.
Ø

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 Appeal & Adjudication

04/26/10 By Akash Saxena

1.
 Adjudicating Authority (AA):
Ø The central government is empowered to appoint
adjudicating authority for holding inquiries in their
respective area only on a complement make in writing.
Ø
Ø Authorities have a powers of civil court.
Ø
Ø All the complaints are to be disposed of finally with in one
year, otherwise the reasons are to be given in writing.

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 Cont……

04/26/10 By Akash Saxena

2.
 Appeal to Special Director:
Ø The central government appoints special director.
Ø
Ø All the appeals as per the order of adjudicating authority.
Ø
Ø The appeal shall be filed within the 45 days from the receipt
of the order.

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 Cont……

04/26/10 By Akash Saxena

3.
 Appellate Tribunal:
Ø It is established by the central government to hear appeals
against the Adjudicating Authority & Special Director.
Ø
Ø The appeal shall be filed within the 45 days from the receipt
of the order of AA or SD.
Ø
Ø

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 Cont……

04/26/10 By Akash Saxena

3.
 Appellate Tribunal:
Ø The Appellate Tribunal is not bound by the procedure late
down by the court of civil procedure.
Ø
Ø It shall be guided by the principle of natural justice and shall
has powers to lay down their own procedure.
Ø

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 04/26/10 By Akash Saxena
THANK YOU 
& 
HAVE A NICE DAY

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