Foreign Exchange Management Act, 1999 Foreign Exchange Management Act, 1999 Wi
With th ththe e lilibeberaralilizazatition on anand d glglobobalalizizatatioion, n, it it wawas s fefelt lt ththat at ththe e FoForereigignn Ex
Exchchanange ge ReRegugulalatition on AcAct t 191973 73 (F(FERERA) A) shshouould ld be be rereplplacaced ed by by a a momorere business friendly enactment. With this view in mind, the Foreign Exchange business friendly enactment. With this view in mind, the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA) was passed.
Management Act, 1999 (42 of 1999) (FEMA) was passed. Objective:
Objective:
The object of Foreign Exchange Regulation Act, 1973 (FERA) was to conserve The object of Foreign Exchange Regulation Act, 1973 (FERA) was to conserve
th
the e foforereigign n reresosoururceces, s, whwherereaeas s ththe e obobjejectcts s of of ththe e FoForereigign n ExExchchanangege Man
Manageagemenment t ActAct, , 191999 99 (FE(FEMA) MA) wewere re to to conconsolsolidaidate te and and ameamend nd the the lawlaw relating to Foreign Exchange with the objective of facilitating external trade relating to Foreign Exchange with the objective of facilitating external trade and payments for promoting the orderly development and maintenance of and payments for promoting the orderly development and maintenance of foreign exchange market by India.
foreign exchange market by India. Sc
Scopope e of of ththe e AcAct: t: (M(Meaeans ns whwherere e alall l ththis is AcAct t apapplplieies s anand d HoHow w itit applies)
applies) 1.
1. This Act may be This Act may be called the Foreign Exchange Management Act, 1999.called the Foreign Exchange Management Act, 1999. 2.
2. It exIt extentends to tds to the whhe whole oole of Indf India.ia. 3.
3. It shall also applIt shall also apply y to all brancto all brancheshes, , offofficeices s and agenand agencicies outsies outside Indiade India ow
ownened d or or cocontntrorolllled ed by by a a pepersrson on reresisidedent nt in in InIndidia a anand d alalso so to to ananyy con
contratravenventiotion n thethereureundender r comcommimittetted d outoutsidside e IndIndia ia by by any any perperson son toto whom this Act applies.
whom this Act applies. 4.
4. ThThe e FoForereigign n ExExchchangange e MaMananagegemement nt AcAct, t, 191999 99 (F(FEMEMA) A) as as alalso so ththee Rules, Notifications and Orders issued by the Government of India and Rules, Notifications and Orders issued by the Government of India and Reserve Bank of India (RBI) under the Act, form the statutory basis of Reserve Bank of India (RBI) under the Act, form the statutory basis of Foreign Exchange Management in India.
Foreign Exchange Management in India. 5.
5. The Act has received the assent of President of India on 29-12-1999 The Act has received the assent of President of India on 29-12-1999 and has come
and has come into force with effect from 01-06-2000.into force with effect from 01-06-2000. Salient Features of the Act:
Salient Features of the Act:
The Foreign Exchange Management Act, 1999 (FEMA) is more transparent in The Foreign Exchange Management Act, 1999 (FEMA) is more transparent in its application. It has laid down the areas where specific permission of the its application. It has laid down the areas where specific permission of the Reserve Bank / Government of India is required. In rest of the cases no such Reserve Bank / Government of India is required. In rest of the cases no such per
permismissiosion n wouwould ld be be neeneeded and ded and a a perperson can son can remremit it funfunds ds and and acqacquiruiree asset
assets, s, incur liabilincur liability in ity in accoraccordance with dance with the specific provisthe specific provisions laid ions laid down indown in the Act or Notifications issued by the Reserve Bank / Government of India the Act or Notifications issued by the Reserve Bank / Government of India
under the Act, without seeking approval of the Reserve Bank / Government under the Act, without seeking approval of the Reserve Bank / Government of India.
of India.
The salient features of FEMA are
The salient features of FEMA are given below:given below: 1.
1. ApplApplicatication ion of of FEMAFEMA mamay y be be seseen en brbroaoadldly y frfrom om twtwo o angangleles s viviz.z.,, capital account transaction and current account transactions.
capital account transaction and current account transactions. (a)
(a) Capital Account Transactions:Capital Account Transactions: Capital Account Transactions releaseCapital Account Transactions release to
to movemovement of ment of capitcapital, al, e.g., transacte.g., transactions in ions in propproperty and erty and inveinvestmenstmentsts and lending and borrowing money.
and lending and borrowing money. (b)
(b) Current Account Transactions:Current Account Transactions: All other transactions, which do notAll other transactions, which do not fall in capital account category, are current account transactions. They fall in capital account category, are current account transactions. They are freely permitted subject to few restrictions. Like certain transaction are freely permitted subject to few restrictions. Like certain transaction needs permission from RBI and
needs permission from RBI and Central Govenrament.Central Govenrament.
(In the above two points a clear understanding is required between (In the above two points a clear understanding is required between the two typs of
the two typs of transactionstransactions)) 2.
2. Some oSome other Fther Featueatures of tres of the FEMhe FEMA are:A are: (a)
(a) The Foreign Exchange Management Act and Rules give full freedom to a The Foreign Exchange Management Act and Rules give full freedom to a person resident in India, who was earlier resident outside India to hold person resident in India, who was earlier resident outside India to hold oror own
own or or trtransfansfer er any any forforeigeign n secsecuriurity ty or or immimmovaovable ble proproperperty ty sitsituateuatedd outside India and acquired when he/she was resident there.
----outside India and acquired when he/she was resident there. ---- RightsRights of persons who is a resident Indian with regards to FEMA
of persons who is a resident Indian with regards to FEMA (b)
(b) SimiSimilar frlar freedom eedom is also gis also given tiven to a resio a resident wdent who inheho inherits surits such secch securiturity ory or immovable property from a person resident outside India.
immovable property from a person resident outside India. (c)
(c) A persoA person residn resident outent outsidside India is perme India is permittitted to hold shared to hold shares, seces, securiuritietiess and properties acquired by him while he/she
and properties acquired by him while he/she was resident in India.was resident in India.
The above three points discusses the rights or degree of freedom The above three points discusses the rights or degree of freedom given to resident Indian and non
given to resident Indian and non residantresidant
To give effect to the provisions of the Act the Government of India have, To give effect to the provisions of the Act the Government of India have,
am
amonong g otothehersrs, , mamade de FoForereigign n ExExchchanange ge MaMananagegemement nt (C(Cururrerent nt AcAccocoununtt Transactions) Rules, 2000 under section 5 read with Section 46 of the Act. Transactions) Rules, 2000 under section 5 read with Section 46 of the Act. The Reserve Bank of India has also made the following Rules/Regulations/ The Reserve Bank of India has also made the following Rules/Regulations/
issued Notifications under various provisions of the Act, which are: issued Notifications under various provisions of the Act, which are: (i)
(ii)
(ii) RegulRegulationations rs relatielating tng to Co Capital apital AccouAccount nt TransacTransactionstions.. (iii
(iii)) RegulRegulationations relats relating to Exping to Export of Goort of Goods Serods Servicevices.s. (iv)
(iv) OtheOther Regulr Regulationations / Notificas / Notifications istions issued by Ressued by Reserve Baerve Bank of India.nk of India.
1. Definiti
1. Definitions: ons: need to have an underneed to have an understanding of the defstanding of the definitionsinitions
Chapter - I of the Act, deals with the definitions Section 2 of the Act Chapter - I of the Act, deals with the definitions Section 2 of the Act has defined certain words, which have been used in the Act. The has defined certain words, which have been used in the Act. The important definiti
important definitions are ons are as follows:as follows: (1)
(1) 'Authorized person' - [Section 2(c)] :'Authorized person' - [Section 2(c)] : means an authorized dealer,means an authorized dealer, money changer, offshore banking unit or any other person for the time money changer, offshore banking unit or any other person for the time being authorized under sub-section (1) of Section 10 to deal in foreign being authorized under sub-section (1) of Section 10 to deal in foreign exch
exchange of ange of foreiforeign gn secursecuritieities. s. BasicBasically a ally a persoperson/orgn/organizatanization ion who haswho has the authority to deal in foreign exchange
the authority to deal in foreign exchange (2)
(2) 'Currency' - [Section 2(h)]:'Currency' - [Section 2(h)]: The currency includes all currency notes,The currency includes all currency notes, postal orders, money orders, cheques, drafts, travelers cheques, letters postal orders, money orders, cheques, drafts, travelers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by
other similar instruments, as may be notified by the Reserve Bank.the Reserve Bank. (3)
(3) 'Fo'Foreireign gn ExExchachangenge' ' - - [S[Sectection ion 2(n2(n)] )] :: ForForeigeign n ExcExchanhange ge meameansns foreign currency and include:
foreign currency and include: (i)
(i) deposdeposits, crits, credits edits and baland balances pances payablayable in any e in any foreforeign curign currencyrency.. (ii)
(ii) drdrafaftsts, , trtravavelelleler r chcheqequeues, s, leletttterers s of of crcrededit it or or bibilllls s of of exexchchanangege,, ex
exprpresessesed d or or drdrawawn n in in InIndidian an cucurrrrenency cy bubut t paypayablable e in in anany y foforereigignn currency.
currency. (iii
(iii)) draftdrafts, travells, travellers cheque, letteers cheque, letters of rs of credcredit or it or billbills s of exchange drawn byof exchange drawn by ba
banknks, s, ininstistitututitionons s or or pepersrsonons s ououtstsidide e InIndidia, a, bubut t papayayablble e in in InIndidianan currency.
currency. (4)
currency other than Indian currency. currency other than Indian currency. (5)
(5) 'Person' - [Section 2(u)]:'Person' - [Section 2(u)]: Person includes:Person includes:
((ii)) aan in innddiivviidduuaall;; (i
(ii)i) a ha hinindu du unundidivivideded fad famimilyly;; (i
(iiiii)) a ca comompapanyny;; ((iviv)) a a fifirrmm;;
(v)
(v) an association of person or a body of individuals, whether any of thean association of person or a body of individuals, whether any of the proceeding sub-clauses.
proceeding sub-clauses.
(6)
(6) 'Person Resident in India' - [Section 2(V)]:'Person Resident in India' - [Section 2(V)]: A person resident of A person resident of India means;
India means;
A person residing in India for more than one hundred and eighty two days A person residing in India for more than one hundred and eighty two days durin
during g the course of the course of the precedithe preceding, financial year. It ng, financial year. It is importanis important t to noteto note that the reason for travelling abroad is important. If a person is staying that the reason for travelling abroad is important. If a person is staying abroad for an uncertain period he becomes an NRI if he comes back abroad for an uncertain period he becomes an NRI if he comes back before 182 days.
before 182 days. (7)
(7) 'Security' - [Section 2(za)]:'Security' - [Section 2(za)]: Security means shares, stocks, bonds andSecurity means shares, stocks, bonds and debentures. Government securities as defined in the public debt Act, debentures. Government securities as defined in the public debt Act, 1944 (18 of 1944), Saving Certificates to which the Government savings 1944 (18 of 1944), Saving Certificates to which the Government savings Certificate Act, 1859 (46 of 1959) applies, deposit receipts in respect of Certificate Act, 1859 (46 of 1959) applies, deposit receipts in respect of deposits and securities and units of the Unit Trust of India established deposits and securities and units of the Unit Trust of India established under Sub-section (1) of Section 3 of the Unit Trust of India Act, 1963 under Sub-section (1) of Section 3 of the Unit Trust of India Act, 1963 (52 of 1963) or of any mutual fund and including certificates of title to (52 of 1963) or of any mutual fund and including certificates of title to securities, but does not include bills of exchange or notes other than securities, but does not include bills of exchange or notes other than Government Promissory Notes or any other instrumentals which may be Government Promissory Notes or any other instrumentals which may be notified by the Reserve Bank as the security for the purposes of this Act. notified by the Reserve Bank as the security for the purposes of this Act. (8)
(8) 'Ca'Capipital tal AccAccounount t TraTransansactiction' on' - - [Se[Sectction ion 2(e2(e)] )] :: CapitaCapital l AccoAccountunt Transaction means a transaction which alters the assets or liabilities, Transaction means a transaction which alters the assets or liabilities, including contingent liabilities, outside India or persons resident in India including contingent liabilities, outside India or persons resident in India or assets or liabilities in India of persons resident outside India, and or assets or liabilities in India of persons resident outside India, and includes transactions referred to in sub-section (3) of
includes transactions referred to in sub-section (3) of the Section 6.the Section 6. (9)
Transaction means, transaction other than a capital account transaction Transaction means, transaction other than a capital account transaction
an
and d wwiiththouout t prprejejududicice e to to tthe he gegenenerralalitity y of of tthe he foforregegoioing ng susuchch transactions includes:
transactions includes: (i)
(i) Payment due in connection with foreign trade, other current business,Payment due in connection with foreign trade, other current business, ser
servicvices es and and shoshort-rt-terterm m bankbanking ing and and crecredit dit facfaciliilitieties s in in the the ordordinainaryry course of Business.
course of Business. (ii)
(ii) PaymPayments duents due as ine as intereterest on lost on loans and as ans and as net innet income fcome from irom investnvestmentments.s. (iii
(iii)) RemiRemittancettances for living exps for living expenseenses of parents, spouse ans of parents, spouse and childrd children residien residingng abroad, and
abroad, and (iv)
(iv) Expenses in connection with foreign travel, education and Expenses in connection with foreign travel, education and medical caremedical care of parents, spouse and children.
of parents, spouse and children.
2. Regul
2. Regulation and Mation and Management of anagement of Foreign ExForeign Exchange: change: Provisions Provisions of of FEMA
FEMA
Dealing in For
Dealing in Foreign Exchange, Eeign Exchange, Etc., - [Secttc., - [Section 3]: ion 3]: ---- who can deal i---- who can deal inn Foreign Exchange
Foreign Exchange
Save as otherwise provided in this Act, rules or regulations made thereunder, Save as otherwise provided in this Act, rules or regulations made thereunder, or with the general or special permission of Reserve Bank, no person shall: or with the general or special permission of Reserve Bank, no person shall: (a)
(a) deal in or transfdeal in or transfer any foreier any foreign exchanggn exchange or foreign secue or foreign security to any perrity to any personson not being an authorized person;
not being an authorized person; (b)
(b) makmake e any paymany payment to or ent to or for the crefor the credit of dit of any perany person resison residendent t outoutsidsidee India in any manner;
India in any manner; (c)
(c) recereceive otheive otherwisrwise through an authore through an authorized persized person, any paymeon, any payment by ordernt by order or on behalf of any person resident outside India in a
or on behalf of any person resident outside India in any manner;ny manner; In nutshell only an authorized person shall deal in foreign exchange. In nutshell only an authorized person shall deal in foreign exchange.
Ho
Holdldining g Of Of FoForereigign n ExExchchanangege, , EtEtc.c., , - - (S(Secectition on 4)4): : --- -- HaHandndlilingng similar to handling of baggage in airports. – means when a foreign similar to handling of baggage in airports. – means when a foreign exnache is transacted who can handle
exnache is transacted who can handle or involve in the or involve in the transactiontransaction Save as otherwise provided in this Act, no person resident in India shall Save as otherwise provided in this Act, no person resident in India shall ac
acququirire, e, hoholdld, , owown, n, popossssesess s or or trtransansfefer r anany y foforereigign n exexchchangange, e, foforereigignn security or any immovable property situated outside India.
security or any immovable property situated outside India. Current Account Transactions - (Section 5):
Current Account Transactions - (Section 5):
Any person may sell or draw foreign exchange to or from an authorized Any person may sell or draw foreign exchange to or from an authorized person if such sale or drawn is a current account transaction:
person if such sale or drawn is a current account transaction: Pr
Provovidided ed ththat at ththe e CeCentntraral l GoGovevernrnmement nt mamay, y, in in pupublblic ic inintetererest st anand d inin consultation with the Reserve Bank, impose such reasonable restrictions for consultation with the Reserve Bank, impose such reasonable restrictions for current account transactions as may be
current account transactions as may be prescribed.prescribed. Ho
Howewevever r cecertrtaiain n trtranansacsactitionons s arare e nonot t rereststririctcteded---(no -(no restrestrictrictionsions examples)
examples) 1.
1. paymepayment for int for impormports under ots under open genepen general liral licensecense 2.
2. paymepayment of divnt of dividenidend on approd on approved foreved foreign invign investmeestmentnt 3.
3. paymepayment of int of interenterest on appst on approveroved borrod borrowed fundwed fundss 4.
4. salsalary tary to foro foreigeign dirn directectorsors 5.
5. paypaymenment t to to airairlinline e boobookinkings, shippgs, shipping comping companianies and es and for tranfor transfesfer r of of cargo
cargo
Capital Account Transactions-(Section 6): Capital Account Transactions-(Section 6): (1)
(1) SubjeSubject to the provisict to the provisions of sub-sections of sub-section (2), any persoon (2), any person may sell or drawn may sell or draw foreign exchange to or from an authorized person for a capital account foreign exchange to or from an authorized person for a capital account transaction.
transaction. (2
(2)) The ReserThe Reserve Bank ve Bank maymay, , in in conconsulsultattation with ion with the Centrthe Central al GovGovernernmenment,t, specify :
specify :
((aa)) aanny y ccllaasss s oor r ccllasasseses s oof f ccapapiittaal l aaccccoouunnt t ttrrananssaaccttiioonns s wwhhiicch h araree permissible;
permissible; (b
(b)) ththe e lilimimit t up up to to whwhicich h foforereigign n exexchchangange e shshalall l be be admadmisissisiblble e fofor r susuchch transactions:
transactions: (3)
(3) ReReststririctctioions ns of of cacapipitatal l acaccocoununt t trtranansasactctioionsns ---(Restrictions---(Restrictions examples)
(a
(a)) trtranansfsfer or er or isissue of sue of anany y foforereigign n sesecucuririty by ty by a a pepersrson on reresisidedent nt ououtstsididee India;
India; (b)
(b) transftransfer or ier or issue of assue of any secny securiturity by a pey by a person rrson resideesident outnt outside Inside India;dia; (c)
(c) any borroany borrowinwing g or or lenlendinding g in in forforeieign gn excexchanhange ge or or in in IndIndian ian ruprupees inees in whatever form or by whatever name called;
whatever form or by whatever name called; (d)
(d) deposideposits betwts between pereen persons resons resident isident in India and pn India and personersons resis resident oudent outsidetside India;
India; (e)
(e) expoexport, irt, impormport or hot or holdinlding of cug of currenrrency or cy or currcurrency ency notes;notes; (f
(f)) trtranansfsfer of er of imimmomovavablble e prpropopererty outsty outsidide e InIndidia, othea, other r ththan an a a lelease notase not exceeding five years, by a person
exceeding five years, by a person resident in India;resident in India; (g)
(g) acquiacquisitiosition or transn or transfer of imfer of immovabmovable prole propertperty in Indiay in India, other th, other than a leasean a lease not exceeding five years, by a
not exceeding five years, by a person resident outside India;person resident outside India; (h
(h)) gigiviving of ng of a a guguararantantee or ee or susurerety in ty in rerespspecect t of any debtof any debt, , obobliligatgatioion n oror other liability incurred:
other liability incurred: (i
(i)) by a by a pepersrson reon resisidedent in nt in InIndidia a anand d owowed to ed to a a pepersrson reson resididenent t ououtstsididee India; and
India; and (ii
(ii)) by a by a perperson son reresidsident ent outoutsidside Ine Indiadia..
Ex
Expoport rt of of GoGoodods s anand d SeServrvicices es - - (S(Secectition on 7)7): : ---ruruleles s whwhililee exporting
exporting (1
(1)) EveEvery ry expexportorter er of of googoods sds shalhall:l: (a)
such form and in such manner as may be specified, containing true and such form and in such manner as may be specified, containing true and correct material particulars, including the amount representing the full correct material particulars, including the amount representing the full export.
export. (b)
(b) furfurnisnish to h to the Rethe Reserserve Bank sucve Bank such other inh other inforformatmation as may be requion as may be requireiredd by the Reserve Bank for the purpose of ensuring the realization of the by the Reserve Bank for the purpose of ensuring the realization of the export proceeds by such exporter.
export proceeds by such exporter. (2
(2)) EveEvery expry exportorter of server of serviceices shall furs shall furnisnish to h to the Rethe Reserserve Banve Bank or k or to suchto such other authorities a declaration in such form and in such manner as may other authorities a declaration in such form and in such manner as may be
be spespecifcifiedied, , concontaitaininning g the the trutrue e and and corcorrecrect t matmatererial ial parparticticulaulars rs inin relation to payment for such
relation to payment for such services.services. Realizatio
Realization And n And RepatriatiRepatriation Of on Of Foreign Exchange - (Section Foreign Exchange - (Section 8):8): Sa
Save ve as as ototheherwrwisise e prprovovidided ed in in ththis is AcAct, t, whwherere e anany y amamouount nt of of foforereigignn exchange is due or has accrued to any person resident in India, such person exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realize and repatriate to India such foreign shall take all reasonable steps to realize and repatriate to India such foreign exchange within such period and in such manner as may be specified by the exchange within such period and in such manner as may be specified by the Reserve Bank.
Reserve Bank. Ex
Exememptptioion n frfrom om ReRealalizizatatioion n anand d ReRepapatrtriaiatition on in in CeCertrtaiain n CaCaseses- s-(Section 9):
(Section 9): (a)
(a) possepossession of fssion of foreioreign currgn currency oency or forer foreign coign coins by anins by any pery person up to sson up to suchuch limit as the Reserve Bank may s
limit as the Reserve Bank may specify;pecify; (b
(b)) foforereigign n cucurrrrenency accocy accoununt t heheld or ld or opopereratated by ed by susuch perch persoson n or claor class of ss of persons and the limit up to which the Reserve Bank may specify;
persons and the limit up to which the Reserve Bank may specify; (c)
(c) foreforeign excign exchange ahange acquircquired froed from emplm employmeoyment, busint, business, ness, tradetrade, vocat, vocation,ion, services, honorarium, gifts, inheritance or any other legitimate means services, honorarium, gifts, inheritance or any other legitimate means up to such limit as the Reserve Bank may specify; and
up to such limit as the Reserve Bank may specify; and (d
(d)) susuch ch ototheher r rerececeipipts ts in in foforereigign n exexchchanange ge as as ththe e ReReseservrve e BaBank nk mmayay specify.
specify.
3. Authorized Persons To Deal In
3. Authorized Persons To Deal In Foreign Exchange:Foreign Exchange:
Chapter - III of the Act, relates to the Authorization of a person by Chapter - III of the Act, relates to the Authorization of a person by the Reserve Bank to
Authorized Person - (Section 10): Authorized Person - (Section 10): (1)
(1) The Reserve Bank may authorize any person to be known as authorized The Reserve Bank may authorize any person to be known as authorized pe
persrson on to to dedeal al in in foforereigign n exexchchanange ge or or in in foforereigign n sesecucurirititieses, , as as anan authorized dealer, money changer or off-shore banking unit or in any authorized dealer, money changer or off-shore banking unit or in any other manner as it deems fit.
other manner as it deems fit.
Reserve Bank's Powers To Issue Directions To Authorized Person Reserve Bank's Powers To Issue Directions To Authorized Person -(Section 11):
(Section 11):
The Reserve Bank may, for the purpose of securing compliance with the The Reserve Bank may, for the purpose of securing compliance with the
pro
provivisiosions ns of of thithis s Act Act and and of of any any rulrules, es, regregulaulatiotions, ns, notnotifiificatcationions s oror di
direrectctioions ns mmadade e ththerereueundnderer, , gigive ve to to ththe e auauththororizized ed pepersrsonons s ananyy direction in regard to making of payment or the doing or desist from direction in regard to making of payment or the doing or desist from doing any act relating
doing any act relating to foreign exchange or foreign security.to foreign exchange or foreign security. Power Of Reserve Bank To
Power Of Reserve Bank To Inspect Authorized Person – (Section 12):Inspect Authorized Person – (Section 12): The Reserve Bank may, at any time, cause an inspection to be made by The Reserve Bank may, at any time, cause an inspection to be made by any officer of the Reserve Bank specially authorized in writing by the any officer of the Reserve Bank specially authorized in writing by the Reserve Bank in this behalf, of the business of any authorized person as Reserve Bank in this behalf, of the business of any authorized person as may appear to be necessary.
may appear to be necessary. 4. Contravention and Penalties: 4. Contravention and Penalties: Penalties-(Sec
Penalties-(Section tion 13):13): (1
(1)) If any persIf any person conton contravraveneenes any provis any provisiosion n of this Actof this Act, or , or concontratravenvenes anyes any rules, regulation, notification, direction or order issued in exercise of the rules, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an powers under this Act, or contravenes any condition subject to which an authorization is issued by the Reserve Bank, he shall upon adjudication, authorization is issued by the Reserve Bank, he shall upon adjudication, b
be e lliiaabblle e tto o a a ppeennaalltty y uup p tto o tthhrriicce e tthhe e ssuum m iinnvvoollvveed d iin n ssuucchh contravention where such amount is quantifiable,
contravention where such amount is quantifiable,
or up to two lakh rupees where the amount is not quantifiable, and or up to two lakh rupees where the amount is not quantifiable, and whe
where re sucsuch h concontratravenventiotion n is is a a concontintinuinuing g oneone, , furfurthether r penpenaltalty y whiwhichch may extend to five thousand rupees for every day after the first day may extend to five thousand rupees for every day after the first day during which the contravention continues.
during which the contravention continues. (2
(2)) AnAny y AdAdjujudidicatcatining g AuAuththororitity y adadjujudgdgining g any any cocontntraraveventntioion n unundeder r susub- b-section (1), may, if he thinks fit in addition to any penalty which he may section (1), may, if he thinks fit in addition to any penalty which he may impose for such contravention direct that any currency, security or any impose for such contravention direct that any currency, security or any other money or property in respect of which the contravention has
other money or property in respect of which the contravention has takentaken place shall be confiscated to the Central Government and further direct place shall be confiscated to the Central Government and further direct that the foreign exchange holdings, if any, of the persons committing that the foreign exchange holdings, if any, of the persons committing the contraventions or any part thereof, shall be brought back into India the contraventions or any part thereof, shall be brought back into India or shall be retained outside India
or shall be retained outside India in accordance with the directions madein accordance with the directions made in this behalf.
Appeal to Appellate Tribunal - (Section 19): Appeal to Appellate Tribunal - (Section 19):
Save as provided in sub-section (2), the Central Government or any Save as provided in sub-section (2), the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of Section 17, or the Special than those referred to in sub-section (1) of Section 17, or the Special Director (Appeals), may prefer all appeal to
