FEMA & Foreign Exchange Practice Quiz

FEMA & Foreign Exchange Practice Test

⏱️ Time: 00:00

1. Under Section 2(n) of the Foreign Exchange Management Act (FEMA), 1999, which of the following is specifically included in the definition of "Foreign Exchange"?

A) Only foreign currency notes and coins.

B) Deposits, credits, and balances payable in any foreign currency.

C) Indian currency notes held by a resident.

D) Only traveller’s cheques expressed in Indian currency.

2. In the Indian foreign exchange market structure, a "Spot" transaction typically involves delivery within how many working days?

A) T+1

B) T+2

C) T+3

D) T+0 (Same day)

3. According to FEMA Section 7 and standard RBI guidelines, what is the normal time limit for an exporter to ensure the realization and repatriation of full export proceeds to India?

A) 6 months from the date of export.

B) 9 months from the date of export.

C) 12 months from the date of export.

D) 18 months from the date of export.

4. Under the Import Data Processing and Monitoring System (IDPMS) framework, within what maximum period must an importer submit the Bill of Entry (BoE) to the Authorised Dealer (AD) bank?

A) 3 months from the date of remittance.

B) 6 months from the date of remittance.

C) 9 months from the date of remittance.

D) 12 months from the date of remittance.

5. What is the current overall ceiling for outward remittances permitted for a Resident Individual under the Liberalised Remittance Scheme (LRS) per financial year?

A) USD 100,000

B) USD 200,000

C) USD 250,000

D) USD 500,000

6. To be eligible to open a Diamond Dollar Account (DDA), a firm dealing in gems and jewellery must be registered with GJEPC and possess an export track record of at least:

A) 1 year

B) 2 years

C) 3 years

D) 5 years

7. In Letter of Credit (LC) operations, which SWIFT message type is used by the Issuing Bank to advise the terms and conditions of a newly issued Documentary Credit?

A) MT 707

B) MT 740

C) MT 754

D) MT 700

8. Which of the following is a primary characteristic of an Exchange Earner’s Foreign Currency (EEFC) account maintained by residents?

A) It is a term deposit account that earns interest at LIBOR-linked rates.

B) It is a non-interest-bearing account.

C) Only 50% of foreign exchange earnings can be credited to the account.

D) Credits are only permitted from domestic trade transactions.

9. While the Central Government regulates Current Account Transactions under Section 5 of FEMA, which authority governs and controls Capital Account Transactions under Section 6?

A) Ministry of Commerce

B) Foreign Settlement Board

C) Reserve Bank of India (RBI)

D) Enforcement Directorate (ED)

10. What is the maximum permissible limit for a "Self Write-off" by an exporter regarding unrealized export proceeds in EDPMS?

A) 2% of the total export proceeds realized in the previous calendar year.

B) 5% of the total export proceeds realized in the previous calendar year.

C) 10% of the total export proceeds realized in the previous calendar year.

D) Up to USD 1 million per importer per financial year.

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