FEMA and RBI Services

FEMA and RBI Services Registration

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Basic Plan

The legal framework for administration of exchange control in India is provided by the Foreign Exchange Management Act, 1999. Under the Act, freedom has been granted for buying and selling of foreign exchange for undertaking current account transactions. However, the Central Government has been vested with powers in consultation with Reserve Bank to impose reasonable restrictions on current account transactions.

The Foreign Exchange Management Act,1999 (FEMA), has come into force with effect from June 1, 2000. With introduction of the new Act (in place of FERA), certain structural changes have been introduced and now all transactions involving foreign exchange have been classified either as Capital or Current Account transactions. All transactions undertaken by a resident that do not alter his assets or liabilities outside India are current account transactions. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which Central Government has imposed restrictions, vide its Notification No.G.S.R.381(E) dated May 3, 2000 (as amended from time to time).


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Foreign exchange can be purchased from any authorized dealer. Besides authorized dealers, full-fledged money changers are also permitted to release exchange for business and private visits.

An authorized dealer is normally a bank specifically authorized by the Reserve Bank under Section 10(1) of FEMA,1999, to deal in foreign exchange or foreign securities.

There is no restriction on residents holding foreign coins.

Residents are free to carry the foreign exchange purchased from an authorized dealer or money changer in accordance with the Rules. They are, however, allowed to carry foreign exchange in the form of currency notes/coins upto USD 2,000 or its equivalent only. Balance amount can be carried in the form of traveller’s cheque or banker/s draft