The Reserve Bank of India has issued amendments to its directions on compounding of contraventions under the Foreign Exchange Management Act, 1999, updating how repeat compounding cases are treated and what information applicants must provide when paying electronically. The change deletes the provision that linked the compounding amount payable to an earlier compounding order. Where that linkage would have applied, the applicant will now be deemed to have made a fresh application and the compounding amount will not be tied to the earlier order. To address reconciliation and processing delays linked to misdirected payments and late submission of applications, the Reserve Bank has also expanded the details required in Part B of Annexure I by adding the applicant or authorised representative’s mobile number, the Reserve Bank office to which payment was made (Central Office, Regional Office or FED CO Cell), and the mode of application submission (PRAVAAH or physical). The ‘Directions on Compounding of Contraventions under FEMA, 1999’ will be updated to reflect these changes, and Authorised Dealer Category-I banks and authorised banks are asked to bring the revised guidelines to the attention of their constituents.
Reserve Bank of India 2025-04-22
Reserve Bank of India amends FEMA compounding directions by removing linkage to earlier orders and adding new payment reconciliation data fields
The Reserve Bank of India has amended its directions on compounding contraventions under the Foreign Exchange Management Act, 1999, removing the linkage of compounding amounts to previous orders and treating cases as fresh applications. The amendments require additional applicant information to address reconciliation and processing delays. Authorised Dealer Category-I banks and authorised banks must inform their constituents of these revised guidelines.