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Exam Review

Key Facts: IIBF Forex for Individuals Exam

120 MCQs / 100 marks

Official exam format

IIBF Rules & Syllabus 2026

50/100

Passing score

IIBF Rules & Syllabus 2026

2 hours

Exam time limit; no negative marking

IIBF Rules & Syllabus 2026

₹1,100 / ₹1,600

Member / non-member fee (+ GST)

IIBF Rules & Syllabus 2026

USD 250,000

Annual LRS limit per financial year

RBI LRS Guidelines

182 days

Ceiling for determining residency under FEMA

FEMA Section 2

IIBF Forex for Individuals certificate: 120 MCQs in 2 hours, English, remote-proctored, no negative marking; pass at 50/100. Fees: ₹1,100 (members) / ₹1,600 (non-members) + GST.

Sample IIBF Forex for Individuals Practice Questions

Try these sample questions to review concepts for the IIBF Forex for Individuals exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1FEMA, 1999 came into force on which of the following dates?
A.June 1, 2000
B.January 1, 1999
C.April 1, 2000
D.August 15, 1999
Explanation: The Foreign Exchange Management Act (FEMA), 1999 was enacted in December 1999 and came into official force on June 1, 2000, replacing the older FERA, 1973. This marked a transition from conserving foreign exchange through control to facilitating foreign trade and payments.
2What is the primary structural philosophy change from FERA (1973) to FEMA (1999)?
A.FEMA introduced stricter criminal prosecution and imprisonment for all forex violations.
B.FEMA transitioned the regulatory framework from 'control and conservation' of foreign exchange to 'facilitation' of trade and payments with civil penalties.
C.FEMA restricted all capital account transactions and banned foreign direct investment.
D.FEMA removed all roles of the Reserve Bank of India in managing foreign exchange.
Explanation: FERA (Foreign Exchange Regulation Act) was a highly restrictive regime that treated violations as criminal offences with arrest provisions. FEMA (Foreign Exchange Management Act) shifted focus toward managing and facilitating trade and payment, making contraventions civil in nature.
3Under Section 2(v) of FEMA, what is the quantitative threshold of stay in India to qualify as a 'Person Resident in India'?
A.Residing in India for more than 182 days during the preceding financial year, subject to exceptions.
B.Residing in India for exactly 180 days in the current calendar year.
C.Staying in India for more than 90 days in any given financial year.
D.Staying in India for 365 days continuously without any travel abroad.
Explanation: FEMA Section 2(v) defines a 'Person Resident in India' as someone residing in India for more than 182 days during the course of the preceding financial year. However, exceptions apply for people going/staying abroad for employment, carrying on business, or with an intention to stay for an uncertain period.
4Which of the following describes a 'Current Account Transaction' under FEMA?
A.A transaction that alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India.
B.A transaction that alters the assets or liabilities in India of persons resident outside India.
C.A transaction other than a capital account transaction, including payments due in connection with foreign trade, interest on loans, and moderate remittances for family maintenance.
D.A transaction that exclusively involves buying gold or real estate outside India.
Explanation: Under FEMA Section 2(j), a current account transaction is defined as a transaction other than a capital account transaction. It includes trade payments, short-term banking facilities, interest on loans, net income from investments, and remittances for living expenses, travel, education, or medical care.
5Which section of FEMA prohibits any person other than an Authorised Person from dealing in or transferring foreign exchange or foreign security?
A.Section 3
B.Section 5
C.Section 6
D.Section 10
Explanation: Section 3 of FEMA restricts dealings in foreign exchange. It states that except as otherwise provided in the Act, rules, or regulations, no person shall deal in or transfer any foreign exchange or foreign security to any person other than an authorised person.
6Which authority is empowered to compound contraventions under FEMA, except those involving money laundering or serious hawala transactions?
A.The Reserve Bank of India (RBI)
B.The Directorate of Enforcement (ED)
C.The Securities and Exchange Board of India (SEBI)
D.The Income Tax Department
Explanation: The Reserve Bank of India (RBI) is the compounding authority for FEMA contraventions, except those under Section 3(a) involving hawala/illegal payments which are handled by the Directorate of Enforcement (ED). Compounding allows individuals to voluntarily admit contraventions and pay a settlement fee instead of facing litigation.
7Under FEMA, what is the maximum time limit within which a compounding order must be implemented by paying the compounded sum?
A.15 days from the date of the compounding order
B.30 days from the date of the compounding order
C.60 days from the date of the compounding order
D.90 days from the date of the compounding order
Explanation: According to the Foreign Exchange (Compounding Proceedings) Rules, the compounded amount specified in the compounding order must be paid by the applicant within 15 days from the date of the compounding order.
8Which section of FEMA governs Current Account Transactions and guarantees that any resident may sell or draw foreign exchange for current account transactions, subject to government rules?
A.Section 5
B.Section 7
C.Section 9
D.Section 4
Explanation: Section 5 of FEMA specifies that any person may sell or draw foreign exchange to or from an authorised person if such sale or drawal is a current account transaction, subject to reasonable restrictions imposed by the Central Government in public interest.
9Which of the following is defined as a 'Capital Account Transaction' under FEMA?
A.Acquisition of foreign equity shares or overseas immovable property by a resident individual.
B.Remittance of money for medical expenses of a close relative residing abroad.
C.Remittance of money for purchase of a subscription of a foreign academic journal.
D.Payment of commission on exports to overseas agents.
Explanation: A Capital Account Transaction is one that alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India, or in India of persons resident outside India. Purchasing foreign shares or property changes the assets of the resident, making it a capital account transaction.
10Under FEMA Section 13, what is the maximum penalty that can be levied if a contravention is quantifiable?
A.Up to three times the sum involved in the contravention.
B.Up to five times the sum involved in the contravention.
C.Up to twice the sum involved plus mandatory arrest.
D.A flat fine of ₹10 lakh regardless of the amount.
Explanation: FEMA Section 13 states that if a person contravenes any provision of the Act, rules, or regulations, they shall be liable to a penalty up to thrice (three times) the sum involved where the amount is quantifiable, or up to ₹2,00,000 where it is not quantifiable.

About the IIBF Forex for Individuals Exam

The IIBF Certificate in Foreign Exchange Facilities for Individuals equips banking and finance professionals with in-depth knowledge of FEMA regulations, Liberalised Remittance Scheme (LRS), resident foreign currency accounts, NRI account schemes (NRE/FCNR/NRO), TDS, DTAA, and AD Category I compliance.

Exam sponsor: Indian Institute of Banking & Finance (IIBF). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Single remote-proctored online MCQ paper in English. 120 questions for 100 marks; no negative marking. Subject: Foreign exchange facilities for resident and non-resident individuals in India.

Time Limit

2 hours

Passing Score

50 out of 100

Exam / Certification Fees

Members ₹1,100 / Non-members ₹1,600 per attempt (+ GST)

Exam sponsor website

Reported exam pass rate: not-published. IIBF does not publish a headline pass rate for this certification. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

20%

Unit 1 — Introduction to FEMA

Genesis of FEMA, repeal of FERA, important sections of FEMA, and compounding of contraventions under FEMA.

35%

Unit 2 — Facilities for Resident Individuals

Liberalised Remittance Scheme (LRS), travel facilities, outward/inward remittances, resident currency accounts, and overseas investments.

30%

Unit 3 — Facilities for Non-Resident Individuals

Definitions under FEMA, NRE/FCNR(B)/NRO accounts, repatriation rules, tax deduction at source (TDS), and Double Taxation Avoidance Agreements (DTAA).

15%

Unit 4 — Regulatory & Compliance

Role of AD Category I banks, KYC/AML guidelines, Form A2 declaration, and transaction monitoring.

Preparing for the IIBF Forex for Individuals Exam

What You Need to Know

  • Passing score: 50 out of 100
  • Assessment: Single remote-proctored online MCQ paper in English. 120 questions for 100 marks; no negative marking. Subject: Foreign exchange facilities for resident and non-resident individuals in India.
  • Time limit: 2 hours
  • Exam / certification fees: Members ₹1,100 / Non-members ₹1,600 per attempt (+ GST) Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

IIBF Forex for Individuals: Suggested Study Strategy

1Master the annual Liberalised Remittance Scheme (LRS) limit of USD 250,000 per financial year and understand what transactions are permitted, prohibited, or require prior RBI approval under Schedule I, II, and III.
2Understand the key differences between NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR(B) (Foreign Currency Non-Resident Bank) accounts, specifically regarding currency denomination, taxability of interest in India, and repatriation rules.
3Memorize FEMA Section 2 definitions, particularly Section 2(v) for 'Person Resident in India' and Section 2(w) for 'Person Resident outside India' based on the 182-day rule and intention of stay.
4Be clear on the tax rules: NRE and FCNR(B) interest is tax-exempt in India, whereas NRO interest is subject to TDS at 30% plus surcharge/cess, unless benefits of a DTAA (Double Taxation Avoidance Agreement) are claimed.
5Study the rules for compounding of contraventions under FEMA: who is the compounding authority (RBI vs Directorate of Enforcement) and the compounding process.
6Know the threshold limits for carrying physical foreign currency and Indian currency into and out of India for residents and non-residents.

Frequently Asked Questions

What is the IIBF Certificate in Foreign Exchange Facilities for Individuals?

It is a professional certification examination conducted by IIBF to test banking staff and finance professionals on regulations and facilities related to retail foreign exchange transactions for resident and non-resident individuals in India.

What is the exam pattern and passing mark?

The exam consists of 120 objective MCQs to be completed in 2 hours. The passing score is 50 out of 100 marks. There is no negative marking.

How much is the registration fee?

The registration fee is ₹1,100 for IIBF members and ₹1,600 for non-members per attempt, plus applicable GST.

Who is eligible for the exam?

Candidates must have passed the 12th standard (or equivalent) in any discipline. Both members and non-members of IIBF can apply.

Are these practice questions official?

No. These are original practice questions created by OpenExamPrep to help you prepare for the official IIBF exam.