The regulation and management of foreign exchange in India are governed by the Foreign Exchange Management Act (FEMA), 1999. This law empowers the Reserve Bank of India (RBI) and the Central Government to oversee foreign exchange transactions, promote international trade, and maintain stability in the market. FEMA: Key Provisions 1. Authorization & Regulation * Only…
The Payment and Settlement Systems Act, 2007 (PSS Act) governs the regulation and supervision of payment systems in India and designates the Reserve Bank of India (RBI) as the regulatory authority for this purpose. The Act empowers the RBI to establish a committee, namely the Board for Regulation and Supervision of Payment and Settlement Systems…
The Foreign Exchange Management Act (FEMA), 1999 is a cornerstone legislation in India that governs dealings in foreign exchange. For bankers, finance professionals, and even corporates engaging in cross-border transactions, an understanding of FEMA’s key terminology is essential. The Act uses some specific terms that may sound technical, but their correct interpretation is crucial to…
The payment and settlement system in India is governed by the Payment and Settlement Systems (PSS) Act, 2007. According to definition of PSS Act 2007, Payment System means a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them. This includes the…
The smooth functioning of payment systems is vital for financial stability and trust in India’s banking ecosystem. To strengthen this framework, the Payment and Settlement Systems Act, 2007 (PSS Act, 2007) was enacted and came into force on 12th August 2008. This landmark legislation provides a legal foundation for regulating and supervising payment systems in…
The Foreign Exchange Management Act, 1999 (FEMA) is India’s primary legislation governing foreign exchange. It was introduced to replace the restrictive **Foreign Exchange Regulation Act (FERA)**, with the goal of creating a more open, transparent, and investor-friendly environment for international trade and payments. FEMA empowers the Reserve Bank of India (RBI) to regulate foreign exchange…
The Negotiable Instruments Act, 1881 is a landmark Indian law that laid the foundation for the legal framework governing financial documents such as promissory notes, bills of exchange, and cheques. Enacted during the British era, the Act was designed to bring uniformity, certainty, and trust to commercial transactions by standardizing the rules around the use…
The Negotiable Instrument Act, of 1881 was enacted on 9th December 1881 to define and amend the law relating to Negotiable Instruments i.e. Promissory Notes, Bills of Exchange, and Cheque. The act came into force on the first day of March 1882. The Act extends to the whole of India but nothing herein contained affects…
According to Section 19. of the NI Act 1889, A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand. Section 31 of the Negotiable Instruments Act, 1881 covers the liability of the drawee of a cheque. The section states that the drawee of…
Crossing a cheque gives financial institution-specific instructions on how to handle cash. Since Crossed Cheques can only be paid through a bank account. When simply two parallel transverse lines either with or without any words appearing on the face of a cheque, that cheque is called a crossed cheque. Normally cheques are crossed on the…
