The Authorized Dealers are financial institutions, banks and other institutions authorized by the Central Bank of the country is to deal in the foreign exchange.  The dealer should do with the instructions and important directions given by the Reserve Bank given from period to period.  While Foreign Exchange Regulation Act was in force, such directions of standing nature were available in the Exchange [...]

There is a need for foreign exchange for the exporters and importers in the country who are spread over a vast geographical area.  Even though, the authority of administer of foreign exchange in India is given to the Reserve Bank, it cannot able to control by itself and it is impossible to do the work individually.  Therefore, provision has been made in the Act of Section 10, the person who enables [...]

The Foreign Exchange Regulation Act, 1973, governs India’s Foreign Exchange Control System.  On September 3, 1939 the Exchange Control was introduced in India on the outbreak of the Second World War. In the closing stages of the war, it became clear that control over foreign exchange transactions would have to continue in some form.  The FERA of 1947 was enacted and decided on a statutory basis [...]

Under Section 46 of the Foreign Exchange Management Act has been empowered the Central Government to make rules to carry out the provisions of the Act.  Same as, Section 47 empowers the Reserve Bank to make regulations to carry out the provisions of the Act and the rules made there under.   Further, Section 41 provides that the Central Government may from time to time, give to the Reserve [...]

The Foreign Exchange Management Act, 1999 (FEMA) seeks to bring the law on the subject up to date keeping in view the changed environment.  This Act “aims at consolidating and amending the law relating to Foreign Exchange with the objective of facilitating external trade and payments are for promoting the orderly development and maintenance of foreign exchange markets in India”.  The important [...]

In all the countries of the world till 1970’s, foreign exchange was considered as a rare commodity and was subject to the strict market control.  Exchange control was the order of the day.  Today we all speak about exchange management and not about exchange control.  Foreign exchange is essential to co-ordinate global business.  Foreign exchange management is associated with currency [...]

Foreign Exchange As Stock To verify the very balance held abroad, the term foreign exchange is used.  The word foreign exchange refers to the stock of foreign currencies and other foreign assets.  According to Foreign Exchange Management Act (FEMA), 1999, defines: “Foreign Exchange means foreign currency and it includes – a)     Deposits, credits and balances payable in any foreign [...]

Forex Exchange Rate The rate at which one country is converted into another currency is the rate of exchange between the currencies concerned.  In our example, if Bank of India exchanges US dollars for Indian rupees at Rs. 50 as dollars the exchange rate between rupee and dollar can be expressed as US Dollar 1 = Rs. 50/- From the foreign exchange quotation market, the rate of exchange for [...]

The trade between the two neighborhood countries is known as International Trade.  With its own set of regulations and currency each country functions as a Sovereign State.  The conduct of International Trade and settlement of transactions has some peculiar problems arising from the difference in the rationality of the exporter and the importer.  Some of the important problems are follows: a)   [...]

What is Forex Trading? A economic transaction made between two countries residents who involves in exchange of one country currency into another.  A person may import the goods and services from other country or he may export them from his country.  If a investor invests abroad gives him higher returns of income.  A person who visits India and not an Indian, buys a product has to spend in India [...]