Reserve Bank Employees Oppose Abolition Of Fera
The All India Reserve Bank of India Employees Associa-tion has said abolition of the Foreign Exchange Regulation Act (Fera) would only mean a licence to money laundering and speculation by unscrupulous business houses.
Pressure had been mounting for the past few months for repealing the act on the grounds that it was incompatible with the liberalised economic environment and was not export friendly.
The association feels that any move to annul Fera would be unwise and detrimental to the interests of the economy.
Also Read
The union pointed out Fera has on many occasions been found inadequate to check the flight of foreign exchange from the country and said it would, therefore, be of utmost necessity to strengthen Fera and not dilute it.
The association called upon the central government to ascertain the views of prominent economists and take the Reserve Bank into confidence before embarking on any move in this direction.
While the genuine difficulties of the exporters must be looked into, the government must not succumb to any pressure since the interest of the country is supreme, it said.
The purpose of the Act is to regulate certain payment dealings in foreign exchange and securities, export-import and other transactions indirectly affecting foreign exchange.
The association pointed out the basic objective of Fera is to conserve foreign exchange resources of the country and to ensure its proper utilisation.
A press release issued by the association said, the negation of the regulation of foreign exchange presupposes that we have reached a state where monitoring of foreign currencies is no longer necessary and the reserves (foreign exchange) the country has are sufficient to take care of any situation which is far from reality.
The union also expressed its discontent on the governments decision to set up a board to investigate bank fraud and said such a move was politically motivated. The union said this move on the part of the government would make the functions of the department of supervision (DoS) redundant.