The Foreign Exchange Management Act or Fema is a body of the Reserve Bank of India or RBI that exercises control over the issues related to foreign exchange / foreign currency deposits. The act regulates the deposits and transactions of currencies between an India resident and foreigner. It is applicable to all the import export traders of Indian origin trading all over the country and even in cases where they have branches, offices and agencies located outside India.
Governed and controlled by the RBI, Fema is an act of regulation that manages the flow of foreign exchange in the country, consistently with the emerging frame work and policies of the World Trade Organization (WTO). One of the major concerns of the organization is to frame policies and regulations for prevention of Money Laundering Act and other such illegal practices involved with Foreign Exchange Management. Enacted on 1st June, 2000, the Fema act is a replacement to FERA or Foreign Exchange Regulation Act of 1973. The replacement was introduced because FERA didn’t fit with post-liberalisation policies of the country, presuming that a person was guilty until and unless he/she proved himself/herself innocent. Where as the law of the country gives the liberty of presuming a person to be innocent unless he/she is proved guilty.
Headquartered in New Delhi, Foreign Exchange Management Act has five zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar. The Delhi headquarter also known as Enforcement Directorate is headed by a Director, where as each of the zonal office is headed by an independent Deputy Director. Further these zones are sub divided into 7 sub-zonal offices.
Fema act plays a vital role in the development and smooth functioning of import export trade. Traders must comply with all the mandates ruled out by the board. It issues numerous notifications and updates at regular intervals. For more information on Foreign Exchange Management Act and to know about their latest announcements, traders can log on to infodriveindia.com. Infodrive India is a reputed online database company that provides copy of all the mandates and notifications issued by Fema. Besides offering online copy, the company advisors also help people for better understanding of the announcements if required.