Answer the following referring to the provision of the Foreign Exchange Management Act, 1999. (i) Discuss the provision pertaining to holding of…

(i) Holding of foreign exchange by resident in India According to section 4 of the Foreign Exchange Management Act, 1999, except as provided in this Act, no person resident in India shall acquire, hold, own, possess or transfer any foreign exchange, foreign security or any immovable property situated outside India. This section prevents Indian residents to acquire, hold, own, possess or transfer any foreign exchange, foreign security or immovable property abroad. Then through separate notifications, acquisition of these assets has been permitted subject to certain conditions and compliance rules. (ii) The general rule to be understood is that Current Account transactions are freely permitted unless specifically prohibited and Capital Account transactions are prohibited unless specifically or generally permitted.