Consider the following functions of the Foreign Exchange Management Act FEMA 1 FEMA restricts activi...........

Economic Affairs Balance of Payments

Consider the following functions of the Foreign Exchange Management Act(FEMA):

1. FEMA restricts activities such as payments made to any person outside India or receipts from them.

2. FEMA imposes restriction on people living in India who carry out transactions in foreign exchange, foreign security or who own or hold immovable property abroad.

3. FEMA regulates the exporters to furnish their export details to RBI.

Which of the statements given above is/are correct?

1, 2, and 3

1 and 3 only

2 and 3 only

1 only

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Explanation:

The Foreign Exchange Management Act,1999 (FEM(A) is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India". This act makes offences related to foreign exchange civil offenses. It extends to the whole of India. It enabled a new foreign exchange management regime consistent with the emerging framework of the World Trade Organisation (WTO). It also paved the way for the introduction of the Prevention of Money Laundering Act, 2002, which came into effect from 1 July 2005.