Define the role of rbi in enforcing fema
Answers
The Foreign Exchange Management Act (FEMA) was passed by the Parliament as a replacement for the earlier Foreign Exchange Regulation Act. Under this act, the RBI has to give permission for capital account transactions. Without permission from the RBI, no person can
* Involve in or transfer any foreign exchange or securities to any unauthorized person.
* Make payment or give credit to a person staying outside the country.
* Receive payment by order or on behalf of people outside the country.
* Enter into financial transaction for acquisition or related activities in India.
The RBI have major role for the enforcement of FEMA or Foreign Exchanfe Management Act .
The RBI give the proper permissions regarding the transaction in the accounts. Person willing for the transfer of any type of foreign exchange or want to involve in it required the permission of RBI. In other words Without RBI no free capital convertibility can occur . RBI have the role in specifying the permissible capital account transaction .
Hope this helps.