Consider the following statements:
$$1.$$ Foreign Exchange Management Act (FEMA) was passed in $$1991$$ to replace Foreign Exchange Regulation Act.
$$2.$$ FEMA serves to make transactions for external trade (exports and imports) easier.
Which of the statements given above is/ are correct?
The correct option is B Only $$2$$
The Government notified the Foreign Exchange Management Act (FEMA) 1999, to replace the Foreign Exchange Regulation Act (FERA), 1974. After the amendment of FERA in 1993, it was decided that the act would become the FEMA. This was done in order to relax the controls on foreign exchange in India, as a result of. FEMA served to make transactions for external trade and easier – transactions involving current account for external trade no longer required RBI’s permission.