Reserve Bank of India delegates compounding of overseas investment, borrowing, lending and guarantee contraventions to regional offices

The Reserve Bank of India (RBI) has delegated powers to compound contraventions involving overseas investment, borrowing, lending and guarantees under the Foreign Exchange Management Act, 1999, to designated regional offices. Applications for these categories were previously received at the central office, while regional offices already handled certain foreign direct investment contraventions. The overseas investment allocation follows the same seven-office mapping introduced in April 2026 for processing overseas investment references, extending regional handling to compounding applications. Overseas investment applications must be routed according to the Unique Identification Number assigned to the foreign entity, overseas joint venture or wholly owned subsidiary. Cases without such a number remain with the central office’s Cell for Effective Implementation of FEMA. Borrowing, lending and guarantee applications must go to the regional office responsible for the Indian entity’s registered office or the applicant’s domicile. However, lending or guarantees involving a foreign entity in which the applicant has made overseas direct investment follow the overseas investment routing instead. Applications covering multiple transaction categories assigned to different offices may be submitted to the central office. The April 2025 Master Directions on compounding will be updated to reflect these changes.