Foreign Exchange Management Act, 1999 (FEMA): Overview and Key Provisions
The Foreign Exchange Management Act, 1999 (FEMA) was enacted by the Indian Parliament to consolidate and amend the law relating to foreign exchange. Its primary objective is to facilitate external trade and payments, and to promote the orderly development and maintenance of the foreign exchange market in India. FEMA came into force on June 1,…
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India’s Exchange Control Framework: An Overview
India’s exchange control regime is primarily governed by the Foreign Exchange Management Act, 1999 (FEMA). This legislation regulates foreign exchange transactions with the objective of facilitating external trade and payments while promoting the orderly development and maintenance of the foreign exchange market in India. The Reserve Bank of India (RBI), in consultation with the Government…
Read article FEDAI rules: Interest/Swap charges in case of Substitution/Change in Tenor of a bill
The 10th edition of FEDAI Rules came in force from 01 April 2019. As per the guidelines FEDAI rule no.2.4, if the Authorised Dealer accepts change in the tenor of Usance bill, in such cases, the Bank shall recover/pay notional swap difference for the relative cover. In case of early delivery of “Optional Delivery Date…
Read article FEDAI rule: Transfer of funds between Vostro Accounts with two banks explained
With effect from April 1st, 2013, the bank carrying out inter-bank VOSTRO transfer by RTGS should follow the procedure as detailed below as per FEDAI rule no. 4.6; i) In the “remark” column of RTGS message related to Vostro Accounts with two banks, the remitting bank should mention that “We undertake to send form A3…
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FEDAI Rule: Export Bills sent for collection
The 10th edition of FEDAI Rules came in force from 01 April 2019. As per the guidelines FEDAI rule no.2.5, the realization proceeds of foreign currency export bill sent for collection or of goods sent on consignment basis shall be purchased by the Authorised Dealer at TT buying rate or FX contract rate as the…
FEDAI rules regarding Foreign Exchange Contracts
The FEDAI Rules (10th edition) for import transactions came in to force with effect from 01 April 2019. Regarding foreign exchange contracts the FEDAI rule 5 specifies the norms detailed as below. Contract amounts: FEDAI rule 5.1 states that any ‘Exchange contracts’ shall be for definite amounts and periods”. Whenever a bill contract mentions more…
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