Economics · Indian Economy - Legal & Foreign Exchange

What was the fundamental shift in emphasis when the Foreign Exchange Management Act (FEMA) replaced the Foreign Exchange Regulation Act (FERA)?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Replacing all regulatory guidelines with unmonitored free-market operations.
2Completely banning foreign direct investment in core industrial sectors.
3Moving away from criminal prosecution and imprisonment toward civil penalties and voluntary compliance.✓
4Shifting the control of all foreign exchange reserves directly to commercial banks.

Correct answer

Moving away from criminal prosecution and imprisonment toward civil penalties and voluntary compliance.

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