Notes on Foreign Exchange Management Act, 1999
Foreign Exchange Management Act, 1999 Introduction India adopted reforms in all sectors from 1991 in the name of Liberalisation, Privatisation and Globalization. Earlier Foreign Exchange Regulation Act 1973 was in force But it was not adequate in the changed scenario, so that act was repealed by the new act. The act was passed on 2nd December 1999 and came into force with effect from 1st June, 2000. This Act applies to the whole of India. Objectives To facilitate external trade and payments. To promote orderly development and maintenance of foreign exchange market in India. To restrict current account transactions by the centre in consultation with the RBI. To allow foreign exchange and flow only for transactions that are permitted on capital account. Silent features Dealings in foreign exchange. (Sec.3) Holding of foreign exchange. (Sec.4) Current account transactions. (Sec.5) Capital account transactions. (Sec.6) Export of goods and services. (Se