Page 211 - DMGT401Business Environment

Business Environment Mahesh Kumar Sarva, Lovely Professional University

Notes Unit 9: Foreign Exchange Management

CONTENTS
Objectives
Introduction
9.1 Foreign Exchange Regulation Act

9.1.1 Application of the Act
9.1.2 Some Important Provisions of the Act
9.2 Foreign Exchange Management Act (FEMA)
9.2.1 Differences between FERA and FEMA
9.2.2 Scope of FEMA

9.2.3 Export of Goods and Services
9.2.4 Possession and Retention of Foreign Currency
9.2.5 Realization and Repatriation of Foreign Exchange
9.2.6 Capital Account Transaction
9.2.7 Current Account Transactions
9.2.8 Enforcement and Penalties
9.3 Summary

9.4 Keywords
9.5 Self Assessment
9.6 Review Questions
9.7 Further Readings

Objectives

After studying this unit, you will be able to:
State the provisions of Foreign Exchange Regulation Act (FERA)
Discuss Foreign Exchange Management Act (FEMA)

Introduction

In last unit you have studied about legal environment. The year 2001 has seen some major
changes in the corporate sector. Increasing liberalisation has forced companies to become more
competitive and adopt different strategies to survive. The Government has also responded by
continuing with its liberalisation policy and further simplifying the laws & procedures. Significant
changes have been made in the field of corporate laws in the last couple of years in areas such as
capital market regulations, corporate governance, simplification of tax laws, rationalisation of
excise and customs duty etc. We also understand that more such progressive measures such as
introduction of VAT, introduction of a new Competition Act to replace the existing MRTP Act
etc are in store in the near future. This unit provides you knowledge of foreign exchange
management act.

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