FEMA Full Form | What is the Full Form of FEMA
FEMA Full Form - Foreign Exchange Management Act
Full Form of FEMA
- FEMA stands for Foreign Exchange Management Act.
- It had been introduced to exchange the earlier exchange Regulation Act (FERA) as FERA wasn't compatible with post-liberalisation policies.
- FEMA was passed within the winter session of Parliament in 1999.
- It became an act on 1 June 2000.
- According to this act, all offenses associated with foreign exchange are civil offenses as against criminal offenses according to FERA.
Foreign Exchange Management Act
- Its head office which is named Enforcement Directorate is found in New Delhi.
- Its five zonal offices which are located in Delhi, Mumbai, Chennai, Kolkata and Jalandhar.
- Each zonal office is headed by the Deputy Director.
- Each Zone is further divided into 7 sub-zonal offices and 5 field units.
- The sub-zonal office is headed by Assistant Director and therefore the field unit is headed by Chief Enforcement Officer.
- The key objective of the FEMA is to consolidate and amend the laws associated with foreign exchange to facilitate external trade and payments.
- The opposite objective that it's formulated is to market the orderly development and maintenance of exchange market in India.
- FEMA is applicable throughout the India.
- It's also applicable to all or any offices, agencies which are outside India but owned or controlled by an individual who may be a citizen of India.
- It allows you sell or draw exchange without prior permission from RBI, you'll later inform the RBI.
- It is according to accounting convertibility and offers provisions for progressive liberalization of capital account transactions.
- It lays down the areas which require permission of RBI or Govt. of India regarding acquisition or holding of exchange.
- It has classified the exchange transactions in two categories; capital account transaction and accounting transaction.
- The currencies included under FEMA are ATM cards, debit cards and credit cards.
- The money transactions in rupees with Bhutan and Nepal won't fall into FEMA as these countries accept Rupees.
- It allows an individual who may be a resident in India at the present, but was a resident outside India within the past, to hold, own or transfer any foreign security or immovable property situated outside India that he or she acquired when he or she was a resident of that country.