Foreign Exchange Management Act, 1999 (FEMA) came into force by an act of Parliament. It was enacted on 29 December 1999 by replacing an act called Foreign Exchange Regulation Act (FERA).
FEMA is a set of regulations which empowers Reserve Bank of India to pass regulations and enables Government of India to pass rules relating to foreign exchange in tune with foreign trade policy of India.
Head Office of FEMA, also known as Enforcement Directorate, headed by Director is located in New Delhi.
There are 5 zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar, each office is headed by Deputy Director.
Objectives of FEMA
It gives powers to the Central Government to regulate the flow of payments to and from a person situated outside the country.
It classified the foreign exchange transactions in two categories, viz. capital account and current account transactions.
It makes offenses related to foreign exchange civil offenses.
It enables a new foreign exchange management regime consistent with emerging framework of World Trade Organisation (WTO).
FEMA does not apply to Indian citizen’s living outside India.
