Exchange Rate Management — Policy Reforms

Entry	Year	Description	Impact
FEMA (Amendment) Act, 2002	2002	Introduced minor amendments to clarify certain provisions and streamline enforcement procedures under FEMA 1999. It primarily focused on procedural aspects and powers of adjudicating authorities.	Enhanced the operational efficiency of FEMA, making it easier for authorities to implement and enforce foreign exchange regulations, thereby contributing to the orderly functioning of the forex market.
Finance Act, 2015 (Section 145)	2015	Introduced amendments to FEMA to align it with the Prevention of Money Laundering Act (PMLA), 2002, and to strengthen provisions related to illicit financial flows. It also clarified certain aspects of compounding of contraventions.	Strengthened India's legal framework against money laundering and illicit financial transactions, which indirectly supports the integrity and stability of the foreign exchange market and the RBI's management efforts.
Finance Act, 2017 (Section 162)	2017	Introduced further amendments to FEMA, particularly concerning the powers of the Enforcement Directorate and the adjudication process. It aimed to improve the effectiveness of enforcement actions.	Improved the enforcement mechanism of FEMA, making it more robust in dealing with contraventions and ensuring compliance, which is vital for maintaining the regulatory environment for exchange rate management.