RBI AS A CONTROLLER OF FOREIGN EXCHANGE :
RBI has got the powers under Foreign Exchange Management Act, 1999 (FEMA) to prohibit, restrict and regulate the following:
(a) transfer or issue of any foreign security by a resident of India and by a person residing outside India
(b) transfer or issue of any security or foreign security by any branch, office or agency in India owned by a person outside India
(c) any borrowing or lending in foreign exchange
(d) any borrowing or lending in rupees between a resident in India and a person outside India
(e) deposits between residents in India and residents outside India
(f) export, import or holding of currency or currency notes
(g) transfer of immovable property outside India other than a lease not exceeding five years by a person resident in India
(h) acquisition or transfer of immovable property in India other than a lease by a person resident outside India
(i) giving guarantee or surety in respect of any debt obligation or other viability incurred by person resident in India to a person outside India and vice-versa.
The Reserve Bank does not deal in foreign exchange directly with the public. It gives license to certain Scheduled Commercial Banks and other entities to deal in foreign exchange and those are known as authorized dealers (ADs) in foreign exchange.