{"id":1100,"date":"2019-04-24T11:02:38","date_gmt":"2019-04-24T11:02:38","guid":{"rendered":"https:\/\/www.ixambee.com\/blog\/?p=1100"},"modified":"2021-02-11T13:58:37","modified_gmt":"2021-02-11T08:28:37","slug":"full-form-of-fema-with-all-details","status":"publish","type":"post","link":"https:\/\/blog.ixambee.com\/full-form-of-fema-with-all-details","title":{"rendered":"Full Form of FEMA with All Details"},"content":{"rendered":"

What is FEMA?<\/b><\/h2>\n

FEMA <\/b>stands for <\/span>Foreign Exchange Management Act. FEMA<\/b> is an act of the Parliament which was brought into existence with the objective of integrating and amending the law related to foreign exchange with the aim of encouraging external trade and payments along with supporting the development and maintenance of foreign exchange market in a well ordered manner. The act was passed on 29th December 1999 but it officially became an act from June 1, 2000. This act was actually passed with the intention of replacing another similar act- <\/span>FERA: Foreign Exchange Regulation Act <\/b>which could not match up with the \u2018pro- liberalization\u2019 policies of the Government. Due to this reason, a new act FEMA came into force. By pro-liberalization, we mean the period supporting liberalization. Liberalization in this case is related to the economic liberalization which meant the reduction of the government’s regulations, restrictions or interference in the private business sector. It may also imply that the government puts less stake in the private businesses. Liberalization may also mean decrease in the number of taxes and is usually linked with \u2018privatization\u2019. <\/span><\/p>\n

Therefore, FERA was repealed in 1998 and FEMA was brought into force to change the way cases related to foreign exchange and trade were being dealt with. FEMA head-office called the Enforcement Directorate is situated in New Delhi which is headed by a Director. FEMA is applicable all-over India along with the agencies or offices situated outside India that are owned or controlled by such a person who is an Indian citizen.<\/span><\/p>\n

FEMA and FERA<\/b><\/h3>\n

As discussed above FEMA replaced the previous act FERA as it was starting to become redundant. It was not keeping up with the existing scenario of liberalization. You will be able to clearly understand after reading about the differences between both the acts FERA and FEMA.<\/span><\/p>\n\n\n\n\n
FERA<\/b><\/td>\nFEMA<\/b><\/td>\n<\/tr>\n
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  • It was enacted in 1973 to promote the regulation of foreign exchange and trade in India.<\/span><\/li>\n
  • It was restrictive<\/span><\/li>\n
  • It contains 81 sections<\/span><\/li>\n
  • It was a gravely strict act as it criminalized every offence and required imprisonment for even minor offences.<\/span><\/li>\n
  • It was introduced at a time when the foreign exchange reserves (Forex) of India were low.<\/span><\/li>\n<\/ul>\n<\/td>\n
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