Foreign Exchange Regulation (FER) Act, 1947 (Act No. VII of 1947)

1. In which year was the Foreign Exchange Regulation Act enacted?
   ✅ Answer:1947
   Explanation:The Foreign Exchange Regulation Act was enacted in 1947 to regulate foreign exchange and securities transactions.
2. What is the full form of FER Act?
   ✅ Answer:Foreign Exchange Regulation Act
   Explanation:The abbreviation FER stands for Foreign Exchange Regulation.
3. What is the Act number of the Foreign Exchange Regulation Act, 1947?
   ✅ Answer:Act No. VII of 1947
   Explanation:It was passed as Act No. VII (7) of 1947.
4. When did the FER Act come into force in Pakistan and Bangladesh?
   ✅ Answer:It came into force in 1947 and continued in force in Bangladesh after independence in 1971.
   Explanation:Bangladesh adopted the Act after liberation with necessary modifications.
5. What was the primary purpose of the FER Act, 1947?
   ✅ Answer:To regulate foreign exchange and control payments and securities involving foreign countries.
   Explanation:It helps maintain national economic stability and conserve foreign reserves.
6. Which authority administers the FER Act in Bangladesh?
   ✅ Answer:Bangladesh Bank
   Explanation:The Bangladesh Bank administers and enforces the FER Act on behalf of the government.
7. Who is the main regulatory body under the FER Act?
   ✅ Answer:Bangladesh Bank
   Explanation:The central bank is empowered to issue permissions, directions, and regulations under the Act.
8. What does “foreign exchange” mean under the FER Act?
   ✅ Answer:Foreign currency and instruments payable in foreign currency.
   Explanation:Includes foreign currency notes, drafts, traveler’s cheques, letters of credit, etc.
9. What is included in the term “foreign security”?
   ✅ Answer:Any security issued or payable in a foreign country or denominated in foreign currency.
   Explanation:Shares, bonds, or debentures of foreign companies fall under this term.
10. What is meant by “authorized dealer” under the Act?
    ✅ Answer:A person or bank authorized by Bangladesh Bank to deal in foreign exchange.
    Explanation:Authorized dealers are licensed institutions handling forex transactions legally.
11. Who appoints authorized dealers in foreign exchange?
    ✅ Answer:Bangladesh Bank
    Explanation:The central bank issues authorization to commercial banks and institutions.
12. Can any person deal in foreign exchange without permission?
    ✅ Answer:No
    Explanation:Only authorized dealers may conduct such transactions legally under Section 3.
13. Which section prohibits unauthorized dealings in foreign exchange?
    ✅ Answer:Section 3
    Explanation:Section 3 restricts dealing in foreign exchange without permission.
14. What is the penalty for violating foreign exchange regulations?
    ✅ Answer:Imprisonment or fine, or both.
    Explanation:Section 23 specifies penalties for contravention of the Act.
15. Which Act controls payments outside Bangladesh?
    ✅ Answer:The Foreign Exchange Regulation Act, 1947
    Explanation:It controls remittances, payments, and financial transfers abroad.
16. What is the main objective of the FER Act, 1947?
    ✅ Answer:To regulate foreign exchange and conserve national reserves.
    Explanation:It aims to maintain economic stability and prevent illegal outflow of foreign exchange.
17. What is the role of the Bangladesh Bank under this Act?
    ✅ Answer:To regulate, monitor, and authorize foreign exchange transactions.
    Explanation:It acts as the implementing authority and issues necessary permissions.
18. What is meant by “export of currency”?
    ✅ Answer:Taking currency or securities out of Bangladesh.
    Explanation:Controlled under Section 8 to prevent capital flight.
19. Is remittance of money abroad without permission allowed?
    ✅ Answer:No
    Explanation:Any transfer or remittance abroad requires prior approval from Bangladesh Bank.
20. What is the meaning of “foreign exchange control”?
    ✅ Answer:Government regulation of currency exchange and foreign payments.
    Explanation:It ensures balance-of-payment stability and prevents illegal forex movement.
21. Which section deals with restrictions on payments?
    ✅ Answer:Section 4
    Explanation:Section 4 prohibits unauthorized payments to non-residents.
22. Which section restricts the export and import of currency?
    ✅ Answer:Section 8
    Explanation:Section 8 imposes restrictions on import/export of currency and securities.
23. Who has the power to issue general or special permission under this Act?
    ✅ Answer:Bangladesh Bank
    Explanation:The central bank can grant general or specific permission for transactions.
24. What is the meaning of “Bangladesh currency” under the Act?
    ✅ Answer:Notes, coins, or instruments expressed in Bangladeshi Taka.
    Explanation:Domestic legal tender used for payments within Bangladesh.
25. Can foreign nationals open bank accounts in Bangladesh freely?
    ✅ Answer:No, they need Bangladesh Bank approval.
    Explanation:Foreigners require permission to open or operate local or foreign currency accounts.
26. What is the penalty for unauthorized dealings in foreign exchange?
    ✅ Answer:Imprisonment up to 2 years or fine, or both.
    Explanation:Section 23 prescribes punishment for anyone dealing in foreign exchange without authority.
27. What is the main focus of Section 3 of the FER Act?
    ✅ Answer:Restrictions on dealing in foreign exchange without authorization.
    Explanation:Section 3 forms the foundation of foreign exchange control under the Act.
28. What is prohibited under Section 4 of the FER Act?
    ✅ Answer:Unauthorized payments to or for the credit of non-residents.
    Explanation:Section 4 restricts making payments outside Bangladesh without permission.
29. Which section deals with acquisition of foreign exchange?
    ✅ Answer:Section 5
    Explanation:Section 5 regulates acquisition and holding of foreign exchange by residents.
30. Who has the authority to inspect foreign exchange accounts?
    ✅ Answer:Bangladesh Bank
    Explanation:The central bank can inspect and verify foreign exchange transactions for compliance.
31. What is meant by “bearer certificate” in foreign securities?
    ✅ Answer:A certificate payable to whoever holds it, not in a specific name.
    Explanation:Bearer certificates are transferable by delivery and are subject to control.
32. What does the FER Act regulate?
    ✅ Answer:Foreign exchange, securities, payments, and import/export of currency.
    Explanation:It provides the legal framework for controlling international financial transactions.
33. What is the penalty for false statements under the Act?
    ✅ Answer:Fine or imprisonment for making false declarations.
    Explanation:Section 23(1)(b) punishes false information in foreign exchange matters.
34. What is the purpose of Section 12(1)?
    ✅ Answer:To ensure export proceeds are repatriated to Bangladesh.
    Explanation:Exporters must bring foreign earnings into the country within the prescribed period.
35. Which section controls the export of goods and payments?
    ✅ Answer:Section 12
    Explanation:Section 12 imposes control on export payments and their timely repatriation.
36. What is meant by “foreign controlled company”?
    ✅ Answer:A company owned or controlled by non-residents or foreign nationals.
    Explanation:Such companies are subject to additional exchange control scrutiny.
37. Can a person acquire foreign currency without permission?
    ✅ Answer:No
    Explanation:Section 5 restricts acquisition or holding of foreign currency without approval.
38. What does “holding of foreign exchange” mean?
    ✅ Answer:Possession of foreign currency or securities.
    Explanation:Residents must declare and obtain permission to hold or retain foreign exchange.
39. What are the responsibilities of authorized dealers?
    ✅ Answer:To follow Bangladesh Bank’s instructions in handling foreign exchange.
    Explanation:Dealers must report, record, and comply with all exchange control directives.
40. Who can issue licenses for foreign currency holdings?
    ✅ Answer:Bangladesh Bank
    Explanation:The central bank grants specific permissions or licenses to hold or retain forex.
41. What does Section 12(2) deal with?
    ✅ Answer:Requirement for exporters to submit documents and declarations to banks.
    Explanation:Ensures monitoring of export-related foreign exchange inflows.
42. What is required for opening a foreign currency account?
    ✅ Answer:Permission from Bangladesh Bank.
    Explanation:Residents must get approval before opening or maintaining such accounts.
43. Which government department implements FER Act rules?
    ✅ Answer:The Ministry of Finance (through Bangladesh Bank).
    Explanation:Bangladesh Bank executes policies under the supervision of the Finance Ministry.
44. What is the meaning of “import of currency”?
    ✅ Answer:Bringing foreign or local currency into Bangladesh.
    Explanation:Importing currency requires declaration and, sometimes, prior permission.
45. What is prohibited under Section 5 of the Act?
    ✅ Answer:Unauthorized acquisition or borrowing of foreign exchange.
    Explanation:Residents must not acquire foreign exchange unless permitted.
46. What is the meaning of “foreign exchange” under Section 2?
    ✅ Answer:Instruments expressed or payable in foreign currency.
    Explanation:Includes bank drafts, traveler’s cheques, letters of credit, and bills of exchange.
47. What is the purpose of Section 8?
    ✅ Answer:To regulate export and import of currency, bullion, and securities.
    Explanation:Section 8 ensures that movements of currency across borders are monitored.
48. Which section controls dealings in foreign securities?
    ✅ Answer:Section 7
    Explanation:Section 7 restricts purchase, sale, or transfer of foreign securities without permission.
49. What is the power of inspection under Section 19?
    ✅ Answer:Bangladesh Bank can inspect books, accounts, and documents of dealers.
    Explanation:This ensures compliance with the Act’s provisions.
50. What is the punishment for contravention of this Act?
    ✅ Answer:Imprisonment, fine, or both as prescribed under Section 23.
    Explanation:Section 23 outlines penalties for violations, such as unauthorized dealings or false declarations.
51. Can a person hold foreign securities without permission?
    ✅ Answer:No
    Explanation:Section 7 prohibits holding or transferring foreign securities without Bangladesh Bank’s approval.
52. What is the role of Bangladesh Bank in foreign exchange control?
    ✅ Answer:To supervise, regulate, and authorize all foreign exchange transactions.
    Explanation:Bangladesh Bank ensures compliance with national exchange control policy.
53. What is the purpose of licensing authorized dealers?
    ✅ Answer:To ensure only approved institutions handle foreign exchange.
    Explanation:It prevents illegal or unauthorized forex dealings.
54. Can a company remit profits abroad freely?
    ✅ Answer:No, prior approval from Bangladesh Bank is required.
    Explanation:Remittance of profits or dividends to foreign shareholders is regulated under the Act.
55. What permission is needed to invest abroad?
    ✅ Answer:Approval from Bangladesh Bank and the Government.
    Explanation:Foreign investments by residents are restricted unless approved.
56. What is Section 13 of the Act concerned with?
    ✅ Answer:Restrictions on transfer of securities to non-residents.
    Explanation:It ensures control over ownership changes that may affect foreign reserves.
57. What is required for exporting currency notes?
    ✅ Answer:Permission from Bangladesh Bank.
    Explanation:Exporting any currency (foreign or local) requires central bank approval under Section 8.
58. What is Section 22 related to?
    ✅ Answer:Power to make rules for carrying out the provisions of the Act.
    Explanation:It authorizes the Government to frame detailed rules for implementation.
59. Who can make rules under this Act?
    ✅ Answer:The Government of Bangladesh.
    Explanation:Rules framed by the Government help execute the objectives of the Act.
60. What is Section 23A about?
    ✅ Answer:Offences by companies and their liability.
    Explanation:It states that company directors or officers may be liable for violations.
61. What is Section 24 concerned with?
    ✅ Answer:Power to make exemptions from the Act.
    Explanation:The Government may exempt certain transactions or classes of persons from restrictions.
62. Can appeals be made under the FER Act?
    ✅ Answer:Yes
    Explanation:The Act provides for appeals against decisions or penalties imposed under it.
63. What is the appeal provision under Section 23B?
    ✅ Answer:It allows an aggrieved person to appeal to the higher authority or court.
    Explanation:Section 23B outlines the procedure for appeal against penalties.
64. Which court tries offences under this Act?
    ✅ Answer:The Court of a Magistrate of the First Class.
    Explanation:Such courts have jurisdiction to try offences under the Act.
65. Can offences under FER Act be compounded?
    ✅ Answer:Yes, with the permission of Bangladesh Bank.
    Explanation:Some offences can be settled by payment of a penalty instead of prosecution.
66. What is the objective of Section 18?
    ✅ Answer:To empower authorities to search and seize evidence of contravention.
    Explanation:It supports enforcement by allowing inspection and investigation.
67. What are the powers of investigation under the Act?
    ✅ Answer:To inspect, demand documents, and question individuals.
    Explanation:Bangladesh Bank and authorized officers can investigate suspected violations.
68. Who can inspect foreign exchange transactions?
    ✅ Answer:Bangladesh Bank or an officer authorized by it.
    Explanation:Only designated officials may perform inspections.
69. What are the reporting obligations of authorized dealers?
    ✅ Answer:To submit periodic reports to Bangladesh Bank on forex transactions.
    Explanation:Regular reporting ensures transparency and compliance.
70. What is the role of the government in the FER Act?
    ✅ Answer:To make policies, issue rules, and oversee enforcement.
    Explanation:The government, through the Finance Ministry, coordinates with Bangladesh Bank.
71. What is the penalty for violation under Section 23(1)?
    ✅ Answer:Fine up to twice the value of the foreign exchange involved, or imprisonment.
    Explanation:Penalties depend on the nature and extent of the contravention.
72. What is “contravention” under the Act?
    ✅ Answer:Any act or omission violating the Act or rules made under it.
    Explanation:Includes unauthorized dealings, false statements, or non-reporting.
73. Can search and seizure be conducted under this Act?
    ✅ Answer:Yes
    Explanation:Authorized officers may search premises and seize documents under Section 19.
74. What does Section 19A specify?
    ✅ Answer:Power of Bangladesh Bank to call for information from any person.
    Explanation:Ensures the central bank can obtain data for enforcement and monitoring.
75. What type of control is exercised under FER Act?
    ✅ Answer:Exchange control over foreign payments, securities, and transactions.
    Explanation:Aims to manage foreign reserves and regulate international financial flows.
76. What is the penalty for false declarations?
    ✅ Answer:Imprisonment, fine, or both under Section 23.
    Explanation:Giving false information or declarations related to foreign exchange is a punishable offence.
77. What is the purpose of Section 20?
    ✅ Answer:To protect officers acting in good faith under the Act.
    Explanation:It provides legal protection to officials for actions taken honestly during enforcement.
78. Who enforces compliance with foreign exchange laws?
    ✅ Answer:Bangladesh Bank and authorized government officers.
    Explanation:They monitor, inspect, and penalize violations under the FER Act.
79. Can the government delegate powers to Bangladesh Bank?
    ✅ Answer:Yes
    Explanation:The Government can delegate powers to the Bangladesh Bank for effective administration.
80. What is the scope of Section 21?
    ✅ Answer:Power to give directions to authorized dealers.
    Explanation:Bangladesh Bank can issue binding instructions to dealers for compliance.
81. What is the main aim of exchange control regulations?
    ✅ Answer:To conserve foreign exchange and stabilize the economy.
    Explanation:Exchange control ensures proper utilization of foreign reserves.
82. What is Section 23(2) about?
    ✅ Answer:Procedure for recovery of penalties.
    Explanation:It allows fines imposed under the Act to be recovered as arrears of land revenue.
83. Can the government exempt transactions from the Act?
    ✅ Answer:Yes, under Section 24.
    Explanation:The Government can issue exemption orders for specific persons or classes of transactions.
84. What is the role of authorized money changers?
    ✅ Answer:To buy and sell foreign currency as permitted by Bangladesh Bank.
    Explanation:They operate under licenses and are subject to strict reporting requirements.
85. Is transfer of securities abroad restricted?
    ✅ Answer:Yes
    Explanation:Section 7 restricts transfer of foreign securities without Bangladesh Bank approval.
86. What are the offences under this Act?
    ✅ Answer:Unauthorized foreign exchange dealings, false declarations, and failure to report transactions.
    Explanation:All acts violating the provisions or rules of the FER Act constitute offences.
87. What is required to repatriate export proceeds?
    ✅ Answer:Exporter must bring foreign currency earnings into Bangladesh within the prescribed time.
    Explanation:Section 12 ensures repatriation of export proceeds to conserve foreign reserves.
88. What is the power of Bangladesh Bank to inspect dealers?
    ✅ Answer:It can inspect books, records, and transactions of authorized dealers.
    Explanation:Section 19 gives the central bank oversight power to verify compliance.
89. Can an exporter keep foreign currency abroad?
    ✅ Answer:No, unless permitted by Bangladesh Bank.
    Explanation:Exporters must surrender foreign earnings to local banks as per the Act.
90. What does Section 18A refer to?
    ✅ Answer:Power to obtain information or evidence from any person.
    Explanation:Bangladesh Bank or authorized officers can require statements or evidence for investigation.
91. Can a person open a foreign account without approval?
    ✅ Answer:No
    Explanation:Opening or maintaining a foreign account requires Bangladesh Bank’s permission.
92. What is the effect of contravention on transactions?
    ✅ Answer:Transactions become void or invalid.
    Explanation:Unauthorized transactions under the Act are legally unenforceable.
93. What is the power of seizure of documents?
    ✅ Answer:Authorized officers may seize documents or materials related to violations.
    Explanation:Ensures that evidence of illegal transactions can be lawfully secured.
94. What is meant by “foreign exchange transaction”?
    ✅ Answer:Any dealing involving foreign currency or instruments payable in foreign currency.
    Explanation:Includes buying, selling, transferring, or remitting foreign exchange.
95. What is the significance of Section 11?
    ✅ Answer:It deals with restrictions on issue of bearer securities.
    Explanation:Prevents misuse of bearer instruments for foreign transactions.
96. What are the control measures on capital transfers?
    ✅ Answer:Permission is required for investment, loans, or asset transfers abroad.
    Explanation:Helps control capital outflow and maintain balance of payments.
97. What is the purpose of Section 10?
    ✅ Answer:To control payments between residents and non-residents.
    Explanation:Ensures that all international payments comply with exchange control rules.
98. What is meant by “remittance”?
    ✅ Answer:Transfer of money or funds from one country to another.
    Explanation:Remittances must be made through authorized channels under the Act.
99. What is the difference between foreign exchange and foreign currency?
    ✅ Answer:

Foreign exchange: Includes all instruments payable in foreign currency (drafts, cheques, etc.).

Foreign currency: Refers to actual notes and coins of another country.
Explanation: Foreign exchange is a broader term covering both physical and non-physical forms.

100. What is the long title of the Foreign Exchange Regulation Act, 1947?
     ✅ Answer:“An Act to regulate certain payments, dealings in foreign exchange and securities, and the import and export of currency and bullion.”
     Explanation:The long title defines the purpose and scope of the Act as per its introduction.