BANKING AFFAIRS

Detailed explanation-1: -The legal provisions governing management of foreign exchange reserves are laid down in the Reserve Bank of India Act, 1934.

Detailed explanation-2: -The Government of India, Ministry of Finance, vide Notification No. GSR(371)(E) dated 1st May 2000 has notified that the Foreign Exchange Management Act, 1999 (42 of 1999) shall come into force on the 1st day of June 2000.

Detailed explanation-3: -Main Features of Foreign Exchange Management Act, 1999 It gives powers to the Central Government to regulate the flow of payments to and from a person situated outside the country. All financial transactions concerning foreign securities or exchange cannot be carried out without the approval of FEMA.

Detailed explanation-4: -The major differences between FERA and FEMA are: Foreign Exchange Regulation Act (FERA) Foreign Exchange Management Act (FEMA) Parliament of India passed the Foreign Exchange Regulation Act in 1973. Parliament of India enacted the Foreign Exchange Management Act (FEMA) on 29 December 1999 replacing FERA.

Detailed explanation-5: -This Act may be called the Foreign Exchange Regulation Act, 1973. 2. It extends to the whole of India. 3. It applies also to all citizens of India outside India and to branches and agencies outside India of companies or bodies corporate, registered or incorporated in India.