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Unit 3: FEMA Act, 1999

Notes

Note Regulations made by the Reserve Bank of India

By virtue of s. 6(3) and s. 47, the Reserve Bank of India has made some regulations. The
more important ones are given below.
1. Foreign Exchange Management (Investment in Firm or Proprietary concern in India)
Regulations, 2000. The objective of this Regulation is to regulate investment by a
person resident outside India in a partnership firm or proprietory concern in India.

2. Foreign Exchange Management (Transfer or Issue of any Foreign Security)
Regulations, 2000. Under these Regulations, the Reserve Bank regulates investment
in foreign securities either by direct investment or otherwise. Thus there are certain
restrictions on a person resident in India to issue or purchase or transfer or acquire
a foreign security.
3. Foreign Exchange Management (Deposit) Regulations 2000. The Regulations are
meant to regulate matters relating to deposits between a person resident in India
and a person resident outside Indian. Under these regulations an authorised dealer
in India may accept deposit under the following schemes:
(i) Non-resident (External) Account Scheme
(ii) Foreign Currency (Non-Resident) Account Banks Scheme
(iii) Non-resident (Ordinary) Account Scheme

(iv) Non-resident (Non-Repatriable) Rupee Account Scheme
(v) Non-resident (Special) Rupee Account Scheme.
4. Foreign Exchange Management (Foreign Currency Accounts by a Person Resident
in India) Regulations 2000. These Regulations prescribe rules for opening, holding,
maintaining of Foreign Currency Accounts and the limits upto which amounts can
be held in such accounts by a person resident in India.
5. Foreign Exchange Management Regulations 2000 provide for (i) Manner of
receipt of foreign exchange (ii) Receipt of payment for export in certain cases
(iii) Manner of payment in foreign exchange.
6. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
outside India) Regulations 2000. These Regulations govern as regards a person
resident outside India : (i) issue of or recording of a transfer of security; (ii) acquisition
of rights shares (iii) issue of shares under Employees’ Stock Options Scheme
(iv) remittance of sale proceeds of an Indian security held by him (v) purchase by him
of any equity/preference/convertible preference shares and convertible debentures
issued by an Indian company.

7. Foreign Exchange Management (Acquisition and Transfer of Immovable Property
outside India) Regulations 2000. These Regulations govern the acquisition or transfer
of any immovable property situated outside India by a person resident in India.
8. Foreign Exchange Management (Acquisition and Transfer of Immovable Property)
Regulations 2000. These regulations govern the acquisition and transfer of property
in India by (i) an Indian citizen resident outside India, (ii) a person of Indian
origin.
Contd...

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