Looking for the most important FEMA MCQs for your upcoming exams? We have analyzed past papers for Bank Promotion Exams to bring you the 19 most expected questions on the Foreign Exchange Management Act. Take the live test, review the blueprint, and master the core concepts.
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✅ | Introduction, Scope and Residential Status
Q1A businessman fails to comply with a procedural requirement, under the Foreign Exchange Management Act (FEMA). Which of the following describes the nature of the potential liability he faces?Q2A resident of Bengaluru transfers ₹75,000 via UPI, to a friend's bank account in Kolkata. Both accounts are held in Indian banks, and denominated in Indian Rupees. Why does this transaction NOT fall under the purview of FEMA?Q3Which of the following statements, regarding the objectives and philosophy of FEMA, are correct?Q4An individual has been living and working in Mumbai, for the last five years. While on a trip abroad, she purchases a property in Dubai, in her own name. Does FEMA apply to this asset?Q5Which regulatory body is primarily responsible, for the administration and practical implementation of the Foreign Exchange Management Act (FEMA), including issuing Master Directions to banks?Q6Consider the following scenarios, regarding residential status under FEMA:
✅ | Transactions, Facilities and Authorized Persons
Q7Consider the following foreign exchange transactions, undertaken by Indian residents. Which of the following correctly classifies the nature of the transaction, under FEMA?Q8Regarding the regulation of foreign exchange transactions, which of the following pairs correctly identifies the primary regulatory authority?Q9Under FEMA, the term "Foreign Exchange" includes which of the following?Q10An individual wishes to legally purchase US Dollars, for a holiday abroad. Under FEMA, from whom must they purchase this currency?Q11The "Liberalised Remittance Scheme" (LRS) allows residents to remit a certain amount of money abroad annually, for permitted purposes, without seeking case-by-case approval. What FEMA principle does this illustrate?Q12An Indian exporter ships goods to a buyer in France, but fails to collect the payment within the time period prescribed by the RBI. The exporter claims that since the goods have left India, FEMA no longer applies. Is this correct?
✅ | Penalties, Adjudication and Sections
Q13The Reserve Bank of India (RBI) issues a Master Direction, requiring Authorized Dealer (AD) banks to obtain specific documentation, for certain outward remittances. What is the legal standing of this direction?Q14An individual realizes they have inadvertently committed a technical contravention, of FEMA procedures. They wish to voluntarily admit the error, and pay a monetary settlement to close the matter, without facing lengthy litigation. Which facility under FEMA allows this?Q15Consider the following statements, regarding penalties and recovery under FEMA:Q16Which of the following statements, correctly describe the enforcement and appellate structure under FEMA?Q17Which of the following pairs, correctly matches the Section of the Foreign Exchange Management Act (FEMA), with its specific subject matter?Q18A person resident in India, wishes to open a savings bank account in New York, denominated in US Dollars. Under FEMA, is this permitted?Q19An Indian parent company, provides a corporate guarantee to a foreign bank, to secure a loan for its overseas subsidiary. How is this transaction classified under FEMA?
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💬 Frequently Asked Questions
Why are FEMA MCQs critical for Bank Promotion Exams?
It is a consistently high-scoring area. Examiners frequently repeat core concepts from this section, especially regarding the classification of capital versus current account transactions and penalty limits.
Does this mock test cover the full syllabus?
Yes, these questions target the most highly-weighted concepts found in previous years’ papers, covering everything from residential status to the compounding of contraventions.
What are the most repeated topics?
Based on our blueprint, Penalties and Adjudication, along with the rules for Authorized Persons, carry the highest weightage.
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