Current account transactions
Section 5 of the Foreign Exchange Management Act, 1999 deals with current account transactions. Any person may sell or draw foreign exchange to or from an authorised person if such sale or drawal is a current account transaction: Provided that the Central Government may, in public interest and in consultation with the Reserve Bank, impose such reasonable restrictions for current account transa The Act came into force on 01 Jun 2000.
Any person may sell or draw foreign exchange to or from an authorised person if such sale or drawal is a current account transaction:
Provided that the Central Government may, in public interest and in consultation with the Reserve Bank, impose such reasonable restrictions for current account transactions as may be prescribed.
Section 5, The Foreign Exchange Management Act, 1999 (Act 42 of 1999).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Akshay N. Patel v. Reserve Bank of India
Court's Decision & Legal Precedent
FEMA s.3 bars dealing in foreign exchange except as permitted by the Act/rules or RBI; merchanting trade (MTT) involves outward and inward foreign-exchange legs and is regulated by RBI under FEMA ss.3/10/11. COVID PPE MTT restrictions were upheld as proportionate under Arts.14/19(1)(g)/21 in service of foreign-exchange and domestic-stock policy.
On this section: Tests a restriction on the drawal of foreign exchange for a merchanting trade transaction, a current account transaction governed by Section 5, and holds that restrictions on such transactions are valid where they are proportionate and fall within the RBI's foreign-exchange management role.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Questions about Section 5
What have the courts held on Section 5 of the Foreign Exchange Management Act?
Akshay N. Patel v. Reserve Bank of India (06 Dec 2021) is the leading judgment on this section among those set out below: Tests a restriction on the drawal of foreign exchange for a merchanting trade transaction, a current account transaction governed by Section 5, and holds that restrictions on such transactions are valid where they are proportionate and fall within the RBI's foreign-exchange management role.
How do I find court cases under Section 5 of the Foreign Exchange Management Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Fema 5, section 5 Fema, section 5 of the Foreign Exchange Management Act. People searching for it also type section 5 of foreign exchange management act 1999 and section 10 5 of foreign exchange management act 1999. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Akshay N. Patel v. Reserve Bank of India (06 Dec 2021).
What should I read with Section 5 of the Foreign Exchange Management Act, and has it changed?
3 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently the Foreign Exchange Management (Current Account Transactions) Rules, 2000. (2000).
When did Section 5 of the Foreign Exchange Management Act come into force?
Section 5 of the Foreign Exchange Management Act, cited as Fema 5, came into force on 01 Jun 2000, having been enacted on 29 Dec 1999. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions1265 words
- 14. Enforcement of the orders of Adjudicating Authority837 words
- 13. Penalties496 words
- 10. Authorised person489 words
- 49. Repeal and saving475 words
- 19. Appeal to Appellate Tribunal465 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.