BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fiscal Responsibility and Budget Management Act
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Banking Regulation Act
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Financial Action Task Force Act
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Foreign Exchange Management Act
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Detailed explanation-1: -The Foreign Exchange Management Act (1999) treats hawala transactions as illegal. [18] Under the Prevention of Money Laundering Act (2002), hawala is illegal if the proceeds from such transactions are used for money laundering.
Detailed explanation-2: -Answer. FEMA act only allows exchange of foreign currencies by authorized dealers and so Hawala transactions are illegal within the FEMA Act. It imposes penalties on people involving in Hawala transactions.
Detailed explanation-3: -Hawala is an informal method of transferring money without any physical money actually moving. It is described as a “money transfer without money movement.” Another definition is simply “trust."
Detailed explanation-4: -Hawala is used in India, Middle East and South Asia and it is an ancient system of transferring money. Hawala can be defined as a money transfer method, which takes place outside the traditional banking system and requires a minimum of two Hawala dealers (or hawaladars) that take care of the “transaction”.