Hello, friends welcome to Studydev. Today we are going to tell you Fema Full Form in this post. If you do not know what the FEMA Act is and how it works. So we are going to answer all your questions in this post. So read the post till the last, you are also going to get the difference between FEMA and FERA in the last.
What is Fema Full Form
We know FEMA as FOREIGN EXCHANGE MANAGEMENT ACT. FEMA Act was launched in the year 1999. Its main job is to convert the currency of one country to the currency of another country. FEMA works more on import and export in the country to bring foreign currency to the country.
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FEMA Full Form In Hindi and Banking
FEMA is called विदेशी मुद्रा प्रबंधन अधिनियम in Hindi. Its job is to exchange foreign currency. This Act has been replaced by the old Act FERA of 1973.
FEMA In Banking Sector
If we talk about what is known as FEMA Act in banking or economics, then it also means Foreign Exchange Management Act. The special thing about this act is that you do not have to follow many rules and regulations while trading in it.
What is FEMA Act 1999
FEMA stands for Foreign Exchange Management Act. It was started in the year 1999 and it has been replaced by the old Act FERA. The FERA Act was enacted in the year 1973 and it meant the Foreign Exchange Regulation Act. It obstructed many types of work done in foreign trade. Due to this, it was replaced by the FEMA Act.
The FEMA Act was introduced in the Parliament in the year 1999 and finally, it was passed on 1 January 2000 and it started working. The FEMA Act applies to all those offices and agencies. Be it abroad or in India. But if your office and agency is in a foreign country and its owner is Indian then you have to comply with FEMA Act.
Important Info about FEMA
- The full form of FEMA is Foreign Exchange Management Act.
- It has been replaced by FERA 1973 Act.
- The head office of FEMA is called Enforcement Directorate.
- FEMA has its head office in New Delhi and has five zonal branches.
- FEMA has five zones – Delhi, Mumbai, Chennai, Kolkata, and Jalandhar.
- Each zonal of FEMA is managed by the Deputy Director. And the head of the sub-zonal is the Assistant Director.
- Each zonal has 7 sub-zonal and 5 field units. Manages the field units to the Chief Enforcement Officer
Why FERA was converted into FEMA Act
FERA whose full name is Foreign Exchange Regulation Act. It was implemented in the year 1973. The FEMA Act greatly eases the foreign investment and trade that was thereafter liberalization. But the FERA Act imposed a lot of control and regulation on foreign investment and trade. Because of this, it was very difficult for all the businessmen to do business.
Therefore, the FEMA Act 1973 was replaced with the FEMA Act, 1999. Therefore, there was a need to make some such rules, due to which trade could be done well in the world economy. That’s why FEMA was regulated.
What Is Fera and Fema Full Form and Basic Difference
- Fera – Foreign Exchange Regulation Act
- Fema – Foreign Exchange Management Act
Basic Difference In Fera and Fema
|FERA is called the Foreign Exchange Regulation Act.||FEMA is called Foreign Exchange Management Act.|
|It was implemented in the year 1973.||It was implemented in the year 1999 and worked on 1 January 2000.|
|The function of FERA is to regulate foreign payments, dealing, and security.||The function of FERA is to exchange foreign currency.|
|FERA was also used to reserve money in India.||The head office of FEMA is called Enforcement Directorate.|
|We also call Fera Draconian Act.||FEMA makes external trade and payments very easy|
Main Objectives of the Foreign Exchange Management Act
- FEMA made external trade and payments very easy. There were many rules and regulations during the first FERA, which were simplified by FEMA.
- FEMA maintains the foreign exchange.
- FEMA regulates foreign capital in India and sets the balance of payment.
- FEMA is a very transparent law, due to which we need special permission in which area. This is what the FEMA Act tells us.
- Currencies like debit cards, credit cards, and ATMs come under the FEMA Act.
- Countries like Bhutan and Nepal cannot do money transactions under FEMA, because the Rupee currency is run in both these countries.
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