About FERA (foreign exchange Regulation Act)
- The effect was framed when India was experiencing the scarcity of foreign exchange reserve
- FERA came into force from 1st January 1974
- FERA was introduced that time when the foreign exchange Reserve of the country are very low
- Forex being a scarce commodity FERA therefore proceeded on the presumption that all the foreign exchange earned by Indian residents rightfully belong to the Government of India had to be collected and surrendered to the Reserve Bank of India
Objective of foreign exchange Regulation Act
- The conservation of India's precious foreign exchange
- issue of guideline to the foreign investor to direct their fun to the core sector with sophisticated foreign Technology
Features of foreign exchange Regulation Act
- Extend to the whole of India
- applied to citizen of India, branches and Agencies outside India
- Central Government imposes restriction on dealing with foreign exchange by any person other than the authorised dealer
- restriction on payment were also imposed only allowed by RBI
- restriction were also imposed on issue of bearer securities
- without prior permission of RBI new company in the foreigner can acquire hold transfer for sale any immovable property in India
- on the account of it's a strong regulatory provisions specially for the reaction which is calculated that whenever a person was prosecuted or preceded against for contravention of any provision rule regulation on any other provision under the act this often lead to an assessee harrasement of companies at that time to say show Cause Notice and the prosecution for alleged violation of FERA
