Foreign Exchange Management Act (FEMA) & Foreign Exchange Regulation Act (FERA)
Foreign Exchange Management Act (FEMA) & Foreign Exchange Regulation Act (FERA) Foreign Exchange Management Act, 1999 (FEMA) came into force by an act of Parliament. It was enacted on 29 December 1999. This new Act is in consonance with the frameworks of the World Trade Organisation (WTO). It also paved the way for the Prevention of Money Laundering Act, 2002 which came into effect from July 1, 2005. This topic would be of importance in the IAS Exam for both Prelims and Mains. Applicable to Bcom students as well. What is FEMA? It is a set of regulations that empowers the Reserve Bank of India to pass regulations and enables the Government of India to pass rules relating to foreign exchange in tune with the foreign trade policy of India. Which Act did FEMA replace? FEMA replaced an act called Foreign Exchange Regulation Act (FERA). What is FERA and when was it passed? FERA (Foreign Exchange Regulation Act) legislation was passed in 1973. It came into effect on January 1, 1974.