BAJAJ BROKING
In the realm of foreign exchange, the Reserve Bank of India (RBI) doesn’t solely manage all transactions. Consequently, the RBI has entrusted its powers to authorised persons under FEMA (Foreign Exchange Management Act). These authorized individuals are empowered to engage in foreign exchange and international securities transactions. This brings us to the pivotal role played by FEMA in regulating and facilitating foreign exchange activities, ensuring a smooth and compliant functioning of the financial ecosystem in India.
The Foreign Exchange Management Act (FEMA) is a pivotal regulatory framework in India that meticulously oversees the management of foreign exchange. The Reserve Bank of India (RBI) has been entrusted with the authority to designate specific individuals or entities as authorised persons under FEMA section 10 for conducting transactions involving foreign securities.
These sub-brokers under FEMA as defined in FEMA Section 2(c), encompass a diverse range of entities, including offshore banking units, money changers, and approved dealers. These entities possess the legal authorization to engage in the trading of foreign securities and foreign exchange within the country’s boundaries. FEMA’s provisions are instrumental in maintaining the integrity and efficiency of India’s foreign exchange operations.
Also Read: Authorised Person Exam
It is crucial to recognize that the roles and responsibilities of these authorized persons may vary based on their specific authorizations, updates in policy and the regulatory landscape at any given time.
To become an Authorized Person under FEMA in India, individuals or entities must apply for authorization through the Reserve Bank of India (RBI). The application process typically involves submitting necessary documentation, demonstrating financial stability, and complying with RBI’s eligibility criteria. Once approved, the RBI grants the authorization, specifying the scope and nature of foreign exchange-related activities that the Authorized Person can undertake.
Also Read: Roles And Functions Of Sub brokers
Under FEMA, RBI plays a pivotal role in regulating and overseeing foreign exchange transactions. Its functions include issuing guidelines and regulations, granting authorization to authorised persons, managing foreign exchange reserves, monitoring capital flows, and ensuring compliance with foreign exchange regulations. RBI also acts as a central authority to maintain stability in the foreign exchange market and safeguard India’s external trade and payment mechanisms.
In summary, FEMA is India’s regulatory framework for foreign exchange transactions, and authorised persons, such as banks, help facilitate these transactions. The RBI supervises and authorizes these entities, ensuring compliance. This system fosters efficient foreign exchange management, promoting stability and serving the needs of businesses and individuals.
Share this article:
Standard Deviation: Meaning, How To Use and Calculate
14 Dec, 2024 | 5 Min. read
Business Forecasting: Definition, Methods, and Models
14 Dec, 2024 | 8 Min. read
Modern Portfolio Theory (MPT): Definition, Types & How To Use
14 Dec, 2024 | 8 Min. read
ASM & GSM Meaning - List of ASM & GSM Stocks
14 Dec, 2024 | 7 Min. read
What Is Nifty BeES? A Guide to Its Benefits and Working
14 Dec, 2024 | 6 Min. read
Nifty Healthcare Index
14 Dec, 2024 | 1 Min. read
Hedging: Meaning, Types, Risks and Strategie
14 Dec, 2024 | 6 Min. read
Bollinger Bands: Meaning, How To Interpret and Use
14 Dec, 2024 | 7 Min. read
Moving Averages Indicator: Variations & Examples
13 Dec, 2024 | 4 Min. read
Learn Everything About Breakout Trading
13 Dec, 2024 | 8 Min. read
Gold Price in India | Gold Drops 1% After Reaching Five-Week High
13 Dec, 2024 | 39 Min. read
Statement of Account and Demat Account: Meaning & Differences
13 Dec, 2024 | 4 Min. read
RBI Launches ULI: Transforming Loan Access
August 27, 2024 | 4 Min. read
Textile Sector in India
September 20, 2024 | 5 Min. read
List of IPOs with DRHPs Filed
November 30, 2023 | 3 Min. read
Aditya Birla Group
September 28, 2023 | 10 Min. read
Bajaj Housing Finance Ltd IPO: Things Smart Investors Need to Know
September 05, 2024 | 4 Min. read
Budget Stock Ideas 2024-2025 | Stocks to Buy Today
July 24, 2024 | 4 Min. read
IPO Eligibility Criteria : Full Details
March 15, 2024 | 6 Min. read
What Is the Lock-In Period in IPOs?
October 18, 2023 | 6 Min. read
Godfrey Phillips Announces 2:1 Bonus Shares
September 16, 2024 | 7 Min. read
Jindal Group- A Comprehensive Analysis
September 27, 2024 | 7 Min. read
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading