Key RBI Powers over Authorized Persons
The Reserve Bank of India (RBI) has extensive powers with respect to authorized persons under FEMA (Foreign Exchange Management Act, 1999), enabling it to regulate, supervise, and enforce compliance in the conduct of foreign exchange transactions. Authorization & Licensing RBI is empowered to authorize any person or entity (banks, money changers, financial institutions) to act…
Read article Regulation and Management of Foreign Exchange in India
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…
Read article Meaning of Certain Important Terms Used in FEMA
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…
Read article Foreign Exchange Management Act (FEMA), 1999 – A Simplified Guide
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…
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Understanding Asset-Liability Management (ALM): A Strategic Approach to Financial Stability
Asset-Liability Management (ALM) is a comprehensive financial strategy employed by banks, financial institutions, and large corporations to manage the risks arising from mismatches between their assets and liabilities. The core objective of ALM is to ensure that an institution can meet its financial obligations as they fall due while optimizing profitability and maintaining long-term financial…
Distinction Between Treasury and Asset-Liability Management (ALM) in Financial Institutions
Treasury and Asset-Liability Management (ALM) are critical functions within financial institutions, each playing a distinct role in maintaining financial stability and effective risk management. While Treasury focuses primarily on short-term liquidity and operational funding needs, ALM is concerned with the strategic management of the institution’s balance sheet over the medium to long term. Role of…
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