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February 2013

Reporting under Foreign Exchange Management Act, 1999 (FEMA)

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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This circular states that corporates and individuals have, during the compounding process, attributed the delays in reporting to acts of omission and commission by their Banks. The circular further states that delay in reporting transactions relating to FDI, ECB & ODI affects the integrity of data and consequently the quality of policy decisions relating to capital flows into and out of the country. The circular advices Banks to take necessary steps to ensure that checks and balances are incorporated in systems relating to dealing with and reporting of foreign exchange transactions so that contraventions of provisions of FEMA, 1999 attributable to them do not occur and warns that RBI can impose a penalty on them for contravening any direction given by the RBI or failing to file any return as directed by RBI in terms of Section 11(3) of FEMA, 1999.

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