A major clean up of decades old foreign exchange cases is now underway.
The Enforcement Directorate has decided to bring pending cases registered under the Foreign Exchange Regulation Act (FERA) to a close, even though the law was repealed more than 25 years ago in 1998. The agency aims to complete this exercise by the first quarter of 2026.
The FERA of 1973, which contained strong criminal provisions, was replaced in June 2000 by the Foreign Exchange Management Act of 1999. Unlike its predecessor, FEMA is a civil law and focuses on managing foreign exchange rather than strict regulation and control.
Officials said the agency has started identifying around 400 to 500 FERA cases where adjudication is still pending before courts. These cases are being considered for fast tracked closure as many of the individuals facing prosecution have either passed away, cannot be traced, or the assets involved have already been liquidated or no longer exist.
According to officials, the immediate deadline for completing this process is the first quarter of 2026. The last show cause notices under the FERA framework were issued in May 2002.
During a recent internal conference held in Gujarat, ED Director Rahul Navin reiterated his instructions for “fast-tracking” old FERA adjudication cases. He stressed the importance of completing the full lifecycle of long pending cases across different legal forums.
Officials added that closing these cases in the coming months would finally end litigation and procedural redundancy that has continued for more than 20 years.
FERA itself has a long legislative history. The first version of the law was introduced in 1947. In 1956, the central government established the Enforcement Directorate as an enforcement unit under the Department of Economic Affairs to handle violations under the 1947 law. This was later replaced by the FERA of 1973 and eventually by FEMA in 1999 as part of India’s economic liberalisation.
Under FEMA, most violations are treated as civil offences, unlike the criminal proceedings that were common under FERA.
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