Transition from Foreign Exchange Regulation Act (FERA) to Foreign Exchange Management Act (FEMA) has been a significant manoeuvre in moving towards a more open economy, according to Reserve Bank of India's zonal director J. Sadakkadulla.
Booster
“The inception of FEMA has proved to be a booster for productive investments as any offences under the Act is treated only as civil offences whereas it was criminal offences under FERA,” he said.
He was addressing the bankers and textile exporters at a meeting organised here under the ‘Town Hall programme’ of the RBI on FEMA and policy initiatives.
Mr. Sadakkadulla called upon the bank officials to be ‘pro-customer’ and further reminded them about the need for constantly updating themselves on foreign exchange management aspects to address any concerns of the people on the topic.
Initiatives
He further listed out the initiatives being taken by the RBI as a ‘central monitoring authority’ on monetary issues and policies in the country and how the bank sees Foreign Direct Investment in the country.
In the representation to the RBI regional director, the knitwear exporters from Tirupur cluster pointed out that the banks were levying Rs. 750 as charges for forward contracts booking and an equal amount as cancellation charges against every booking of foreign exchange.
Charges
“These charges need to be lowered to at least Rs. 250 for every transaction,” opined A. Sakthivel, president of Tirupur Exporters Association.
Similarly, the exporters also wanted the banks to meet the insurance premium under the Export Promotion Capital Goods (EPCG) scheme from their own resources rather than deducting the same from the accounts held by the exporting units.
