The . For all the practical purposes, the
local branch was to be the first and the final contact
point, particularly, in matters relating to the routine
foreign exchange transactions.
The
Foreign Exchange Management Act (FEMA), 1999, became
effective from June 1, 2000 by replacing the then existing
Foreign Exchange Regulation Act (FERA), 1993. The replacement
was with a sunset clause which meant that the effect
of FERA was to be completely erased within two years
of its repeal. In other words, even for the transactions
done by FERA, after two years, its provisions could
not be applied. Thus, exporters could forget the FERA
once for all within two years of FEMA implementation.
Enactment
of FEMA was not a sudden changing event as in the case
of the `Big Bang' of United Kingdom (UK) which resulted
in massive reforms of equity markets. In fact, in FEMA
itself, the concept of export is mentioned in three
contexts only, — to define exports, to authorize
the RBI to regulate the exports and to impose the obligation
of submission of any information needed, including the
basic `export declaration'. There were a number of changes
that were continuously taking place since the late 1990s
and the changes even continued after the enactment of
FEMA. Exporters have gained immensely by simplification
of the procedural rigors that were applicable in their
day-to-day activities. The RBI realized that exporters
should concentrate on their core activity of exporting
and earning foreign exchange rather than on the procedural
hassles. This basic ethos formed the bedrock for the
changes that were effected thereafter. |
