Analyse the below mentioned situation in the light of the provisions of the Foreign Exchange Management Act, 1999. (i) Mr. Vinod has won a big…

According to section 5 of the Foreign Exchange Management Act, 1999, any person may sell or draw foreign exchange to or from an authorized person if such a sale or drawal is a current account transaction. Provided that Central Government may, in public interest and in consultation with the reserve bank, impose such reasonable restrictions for current account transactions as may be prescribed. As per the rules, drawal of foreign exchange for current account transactions are categorized under three headings- Transactions for which drawal of foreign exchange is prohibited,Transactions which need prior approval of appropriate government of India for drawal of foreign exchange, andTransactions which require RBI's prior approval for drawl of foreign exchange. (i) Mr. Vinod wanted to remit US Dollar 20,000 out of his lottery winnings to his son residing in Singapore. Such remittance is prohibited and the same is included in the Foreign Exchange Management (Current Account Transactions) Rules, 2000. Hence Mr. Vinod cannot withdraw foreign exchange for this purpose. (ii) In the given situation, it is a current account transaction, where Mr. Shyam is required to take approval of the Central Government for drawal of foreign exchange for remittance of hire charges of transponders.