FEMA Full Form | What is the Full Form of FEMA

Full Form of FEMA

FEMA stands for Foreign Exchange Management Act.
It had been introduced to exchange the earlier exchange Regulation Act (FERA) as FERA wasn't compatible with post-liberalisation policies.
FEMA was passed within the winter session of Parliament in 1999.
It became an act on 1 June 2000.
According to this act, all offenses associated with foreign exchange are civil offenses as against criminal offenses according to FERA.

Foreign Exchange Management Act

Its head office which is named Enforcement Directorate is found in New Delhi.
Its five zonal offices which are located in Delhi, Mumbai, Chennai, Kolkata and Jalandhar.
Each zonal office is headed by the Deputy Director.
Each Zone is further divided into 7 sub-zonal offices and 5 field units.
The sub-zonal office is headed by Assistant Director and therefore the field unit is headed by Chief Enforcement Officer.
The key objective of the FEMA is to consolidate and amend the laws associated with foreign exchange to facilitate external trade and payments.
The opposite objective that it's formulated is to market the orderly development and maintenance of exchange market in India.
FEMA is applicable throughout the India.
It's also applicable to all or any offices, agencies which are outside India but owned or controlled by an individual who may be a citizen of India.

Main Features

It allows you sell or draw exchange without prior permission from RBI, you'll later inform the RBI.
It is according to accounting convertibility and offers provisions for progressive liberalization of capital account transactions.
It lays down the areas which require permission of RBI or Govt. of India regarding acquisition or holding of exchange.
It has classified the exchange transactions in two categories; capital account transaction and accounting transaction.
The currencies included under FEMA are ATM cards, debit cards and credit cards.
The money transactions in rupees with Bhutan and Nepal won't fall into FEMA as these countries accept Rupees.
It allows an individual who may be a resident in India at the present, but was a resident outside India within the past, to hold, own or transfer any foreign security or immovable property situated outside India that he or she acquired when he or she was a resident of that country.