The Reserve Bank of India (RBI) has simplified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, by putting all the 93 amendments under one notification, a move that will significantly make it easier for foreign investors to invest in the country.
The Foreign Exchange Management Act (FEMA), introduced in 1999, was amended 93 times.
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”. It replaces the Foreign Exchange Regulation Act (FERA).
This act seeks to make offenses related to foreign exchange civil offenses. It enables a new foreign exchange management regime consistent with the emerging framework of the World Trade Organisation (WTO). It also paved way to Prevention of Money Laundering Act 2002, which was effected from 1 July 2005.