Section 3 of FEMA : Section 3: Dealing In Foreign Exchange, Etc

Explanation using Example

Here's an example illustrating the application of Section 3 of The Foreign Exchange Management Act, 1999:

Imagine a situation where Mr. Arjun, an Indian resident, wants to buy shares in a foreign company. He approaches his friend Mr. Bala, who lives in the United States, to purchase these shares on his behalf. Mr. Arjun sends the money to Mr. Bala's US bank account without involving any authorized dealer or bank in India.

In this scenario, Mr. Arjun is violating Section 3 of the FEMA Act because...

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