FERA and FEMA

Discription and Major diff. b/w them

1. FOREIGN EXCHANGE in IN D IA LAWS GOVERNING Presentation By A NVESH SHARMA

2. FOREIGN EXCHANGE

3. Definition The exchange of one currency for another or the conversion of one currency into another currency is known as Foreign exchange. The value of any particular currency is determined by market forces based on trade, investment and tourism. INTRODUCTION

4. A tourist A Foreign Company Need of FOREIGN EXCHANGE

5. FERA

6. INTRODUCTION . The Foreign Exchange Regulation Act- enacted in 1974. FERA emphasized strict exchange control. Law violators were treated as criminal offenders. Repealed in 1999 by govt of Atal Bihari Bajpayee .

7. To regulate dealing in foreign exchange and securities. To regulate transaction indirectly affecting foreign exchange. To regulate import and export of currency. To regulate foreign business In India. To make proper utilization of foreign exchange. OBJECTIVES .

8. Low foreign exchange (FOREX) reserve FOREX is a scarce commodity FERA primarily prohibited all transaction, except one’s permitted by RBI. Need to INTRODUCE FERA

9. Post liberalization, there was need to remove shackles of regulatory and legal provision. Need to consolidate and amend laws. Non competitive of Indian companies in international market. Need to SCRAP FERA

10. FEMA

11. The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA came into force on the 1st day of June, 2000. INTRODUCTION

12. To facilitate the external trade and payment. To promote of an orderly maintenance of the foreign exchange market in India. Regulation of foreign capital in India. To remove imbalance of payment. To make strong and developed foreign exchange market. OBJECTIVES

13. The FEMA is applicable- To the whole of India. Any Branch, office and agency, which is situated outside India, but is owned or controlled by a person resident in India . Broadly speaking FEMA, covers, three different types of categories, and deals differently with them. These categories are: Person Person Resident In India Person Resident Outside India To Whom Act is applicable ?

14. 14 Section Description 1 Application and Commencement of FEMA 2 Definitions 3 to 9 Provisions relating to Regulations and Management of Foreign Exchange 10 to 12 Provisions relating to Authorized Person 13 to 15 Provisions relating to Contraventions and Penalties 16 to 38 Provisions relating to Adjudication, Appeal and Directorate of Enforcement 39 to 49 Miscellaneous Provisions Substantive Provisions

15. FEMA FERA V/ S

16. FEMA FERA The objective of FERA was to conserve FOREX and to prevent its misuse. The objective of FEMA is to facilitate external trade and payments and maintenance of FOREX market in India.

17. FEMA FERA Violation of FERA was a criminal offence. Whereas Violation of FEMA is a civil offence.

18. FEMA FERA Offences under FERA were not compoundable. Offences under FEMA are compoundable.

19. FEMA FERA Citizenship was a criteria to determine the residential status of a person under FERA. While stay of more than 182 days in India is the criteria to decide residential status under FEMA.

20. CONCLUSION

21. Foreign exchange “the exchange of one currency for another or the conversion of one currency into another currency” was governed by FERA in India, which was enacted in 1973. FERA was introduced at the time when FOREX reserves of the country were very low, to deal in foreign exchange and securities and for the import and export of currency. CONCLUSION

22. But in 90’s FERA had outlived its utility, Indian economy started facing a crisis when foreign exchange had become a precious commodity and all that problems discussed back. FERA was replaced by FEMA as it was an impediment in India’s to go global in 2000. FEMA has brought a new management regime of Foreign Exchange. FEMA is to consolidate and amend the law relating to foreign exchange, facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. CONCLUSION (cont’d)

23. THANK YOU A PRESENTATION BY A NVESH SHARMA