RBI imposes penalty on five foreign banks for forex violations

• RBI imposes penalty on 5 foreign banks for violating FEMA rules The Reserve Bank of India (RBI) has imposed fine on five foreign banks namely, Standard Chartered Bank, Deutsche Bank, Bank of America, Bank of Tokyo Mitsubishi and The Royal Bank of Scotland for violating reporting requirements of the Foreign Exchange Management Act (FEMA), 1999.
• The fines were imposed by Central Bank by exercising its powers under the provisions of Section 11(3) of FEMA 1999. Germany’s Deutsche Bank has been imposed a fine of Rs 20,000 while the rest of the banks have been fined Rs 10,000 each.

About FEMA:

• The Foreign Exchange Management Act, 1999 (FEMA) 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".  
• It was passed in the winter session of Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA).

Main features of FEMA:

• Activities like payments created to somebody outside Indian or receipt from them, alongside the deals in interchange and foreign security is restricted. It’s FEMA that provides the central government the ability to impose the restrictions.
• Restrictions are obligatory on residents of Indian do transactions in exchange, foreign security or an own or hold unmovable property abroad.
• Without general or specific permission of the FEMA restricts the transactions involving interchange or foreign security and payments from outside the country to India the transactions should to be created solely through a licensed person.
• Deals in exchange beneath this account by a licensed person may be restricted by the Central Government, supported public interest.
• Although commercialism or drawing of exchange is finished through a licensed person, the run batted in is authorized by this Act to subject the capital account transactions to variety of restrictions.
• Residents of India are allowable to hold out transactions in interchange, foreign security or to possess or hold unmovable property abroad if the currency, security or property was owned  or no inheritable once he/she was living outside Asian nation, or once it had been genetic by him/her from somebody living outside India.
• Exporters are required to furnish their export details to run batted in. to make sure that the transactions are allotted properly, run batted in could raise the exporters to abide by to its necessary necessities.
   

By: Vishal