CAIIB · BRBL

FOREIGN EXCHANGE MANAGEMENT ACT 1999

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.

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Q

What is the primary objective of the Foreign Exchange Management Act, 1999?

A

FEMA aims to facilitate external trade and payments and to promote the orderly development and maintenance of the foreign exchange market in India.

Q

What is the full form of FEMA?

A

Foreign Exchange Management Act

Q

Which authority administers and enforces FEMA in India?

A

FEMA is administered by the Reserve Bank of India (RBI) and enforced by the Directorate of Enforcement (ED) under the Ministry of Finance.

Q

Which act did FEMA replace in India?

A

Foreign Exchange Regulation Act (FERA) 1973

Q

When did FEMA come into force?

A

FEMA came into force on June 1, 2000, replacing the earlier Foreign Exchange Regulation Act (FERA), 1973.

Q

Under which ministry does FEMA administration fall?

A

Ministry of Finance, Government of India

Q

How does FEMA define a 'person resident in India'?

A

A person resident in India is one who has been residing in India for more than 182 days during the preceding financial year, excluding those who have gone abroad for employment, business, or vocation.

Q

What is the maximum penalty under FEMA for a continuing contravention?

A

Rs. 5,000 per day after first day

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