Indian Fiscal Budget 1997-98: Full Text


FERA and Money Laundering

  1. As we progress towards a more open economy with greater trade and investment linkages with the rest of the world, the regulations governing foreign exchange transactions also need to be modernised. It is generally acknowledged that the Foreign Exchange Regulation Act, 1973 needs to be replaced by a new law consistent with full current account convertibility and our objective of progressively liberalising capital account transactions. Hence, I propose to introduce, later this year, a Bill titled The Foreign Exchange Management Act. An RBI-appointed group is expected to complete the drafting of the Bill shortly.

  2. While FERA is being replaced, we will not let up in our effort to curb the laundering of ill-gotten money. A Bill dealing with money laundering is under preparation and I propose to introduce it during this session of Parliament.

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