Objectives of Foreign Exchange Regulation Act 2019
- To regulate foreign exchange related transactions.
- To maintain the economic interest of the general public.
- To promote the use of foreign exchange for the payment and receive of foreign trade.
- To promote foreign investment and technology transfer,
- To promote the use of foreign currency in loan exchange.
- To maintain the balance of payment (BoP) in the nation.
- Use of foreign exchange investment and technology transfer.
- Foreign exchange (buying & selling of FOREX).
- Use of foreign exchange for the payment/receive of foreign trade.
- Use of foreign currency in loan exchange (transaction) with foreign entities.
- Regulations of foreign-related transactions.
- Clarifications for various foreign exchange related terms like foreign exchange, convertible currency.
- Foreign Currencies
- Convertible Currencies
- Foreign Negotiable Instruments
Example – All the deposits, landing, balance, foreign, negotiable instrument, international cheques, draft/travel cheque, electric fund transfer tools, credit cards, letter of credit, bills of exchange, etc.
- The provision relating to a license for the transaction of foreign exchange.
- Foreign exchange regulation act assigned to NRB as a regulation for Foreign Exchange transactions.
- The provision relating to the use of foreign exchange in foreign trade to pay or receive.
- Provision relating to lending borrowing loan, repatriation (the sending of money back to one’s own country) of investment and payment on technology transfer in the form of foreign exchange.
- Provision relating to investigation and seized of confiscation of suspicious foreign exchange which is used by violating the legal provision.
- Provision relating to the permission of NRB to be obtained for opening the bank account in abroad bu Nepali Citizen.
- Provision of reward to information provider as up to 20% of the claim amount realized by the court.
- Provision of punishment on foreign exchange related offense. Maximum fine up to 3 times of claim amount and imprisonment up to 3 years.
- Person/B&FIs, firms or company must make foreign exchange transaction only with the licensed company.
What are the punishments
Act doing Foreign exchange transaction by violating the provision of acts/rules and directing by any person, firms of an institution is called foreign exchange related offense.
Punishment – Fine 3 times of claim amount. If the claim amount is not clear then fine up to 2 lakhs.
In case of violation of export, fine up to 2 times of claim amount.
In case of import, fine up to 3 times of claim amount. For accomplice, half the punishment of the main convicted.
For a constitutional person, political appointed authority, double the punishment but imprisonment only up to extra 2 years.
The weakness of Foreign Exchange Regulating Act
- Handed over all rights to NRB.
- The tradition of Foreign Exchange use should be increased.
- The investigation team should be specialized.
- Provision should be in compliance with the money laundering prevention act.