Discuss the salient features of FEMA act 1999.?

Answer 1

Salient features of FEMA:

· It will facilitate trade rather than prevent misuse of foreign exchange.

· Definitions of capital account transaction and current account transaction have been introduced keeping in mind the possibility of introduction of capital account convertibility in the near future.

· All current account transactions shall be allowed (subject to reasonable restrictions). Reserve Bank to classify those capital account transactions that are to be permitted and to regulate transfer and issue of foreign securities by a resident in/outside India as well as setting up of branches/offices by foreign companies in India.

· All key sections relating to dealings, holding and payments in foreign exchange and exports have been simplified.

· Liberalization in enforcement provisions reflects that the attitude is of putting trust in the persons covered