What is Currency and Currency Notes?

FEMA contains definitions of certain terms, which have been used throughout the Act. The meaning of these terms may differ under other laws or under common language. But for the purposes of FEMA, the terms will signify the meaning as defined there under. Let us take up some of the more impor­tant ones.

“Authorized person” means an authorized dealer, money changer, off-shore banking unit or any other person for the time being authorized to deal in foreign exchange or foreign securities;

“Capital Account Transaction” means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and includes transactions by way of giving guarantees or surety for any debt, obligation or other liability of (1) a person resident outside India or (2) of a person resident in India and owed to a person resident outside India.

“Currency” includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travelers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank;

“Currency Notes” means and includes cash in the form of coins and bank notes;