According to FEMA foreign exchange does not include which one of the following?

Question

Question

This question was previously asked in

UGC NET Paper 2: Commerce 14 Oct 2022 Shift 1

Deposit-payable in any foreign currency
Bills of exchange drawn in Indian currency but payable in any foreign currency
Travellers cheques drawn by institutions outside India but payable in Indian currency
Draft drawn by banks outside India and payable in foreign currency

Answer 1

Draft drawn by banks outside India and payable in foreign currency is not included in foreign exchange.

Key PointsForeign Exchange Management Act:

Facilitating payments and trade abroad was the fundamental reason why FEMA was established in India.
FEMA was also developed in order to support the orderly growth and upkeep of the Indian currency market.
The processes and procedures for all foreign exchange transactions in India are outlined by FEMA.
Current Account Transactions and Capital Account Transactions are the two categories into which these foreign exchange transactions have been divided.

Important PointsForeign Exchange Means Foreign Currency and Includes:

Deposits, credits, and balances payable in any foreign currency
Drafts, traveler's cheques, letters of credit, or bills of exchange expressed or drawn in Indian currency but payable in any foreign currency. ,
Drafts, traveler's cheques, letters of credit, or bills of exchange drawn by banks institutions, or persons outside India but payable in Indian Currency.

Hence, it can be concluded that the statement is incorrect.