The Reserve Bank of India (RBI) has issued circular RBIFED20252629 dated April 22, 2025, addressing amendments for compounding of contraventions under Foreign Exchange Management Act (FEMA), 1999. The revisions include:
1. **Clarification on Compounding Amount**: In cases requiring the compounding of violations, the amount shall not be linked to any previous compounding orders; henceforth considered a fresh application.
2. **Enhanced Communication for Electronic Payments**: Applicants are now advised to provide their mobile number along with that of the designated RBI office (Central Office, Regional Office or FED CO Cell) when making electronic payments and upon submitting compensation applications through the online portal PRAVAAH Physical. This aims to facilitate better reconciliation and processing time.
3. The **updated guidelines** reflect these changes are set to replace previous directions issued on October 1, 2024 (Circular No. 17202425), with a view to improving the efficiency in handling compounding applications by addressing issues related to incorrect payment to RBI offices and delays in submitting applications post-payment.
The notification is intended primarily for Authorised Dealer Category I banks and other banks under the purview of these directives, requesting them to disseminate the outlined guidelines to their relevant departments.
Key Entities Referenced
RESERVE BANK OF INDIA: The central bank of India, the issuer of the circular.
RBIFED20252629: Reference number of the circular.
A.P. DIR Series Circular No 02202526: The specific circular being issued by the Reserve Bank of India.
April 22, 2025: Date of the circular's issuance.
All Authorised Dealer CategoryI banks and Authorised banks: Addressees of the circular.
FEMA, 1999: Foreign Exchange Management Act, 1999, the legislation under which contraventions are being compounded.
Guidelines for compounding of contraventions under FEMA, 1999: The guidelines which are being amended by this circular.
A.P. DIR Series Circular No. 17202425: Previous circular related to compounding of contraventions under FEMA, 1999.
October 1, 2024: Date of the A.P. DIR Series Circular No. 17202425.
Paragraph 5.4.II.v: Specific paragraph within the A.P. DIR Series Circular No. 17202425 that is being deleted.
Part B of Annexure I: Section of the A.P. DIR Series Circular being modified.
Central Office: One of the offices of the Reserve Bank of India.
Regional Office: One of the offices of the Reserve Bank of India.
FED CO Cell: One of the offices of the Reserve Bank of India.
PRAVAAH: Mode of submission of application through PRAVAAH Physical.
Dr. Aditya Gaiha: Chief General Manager in Charge at Reserve Bank of India.
Foreign Exchange Department: Department within the Reserve Bank of India.
Central Office Building., Shahid Bhagat Singh Road, Fort, Mumbai400 001, India: Address of the Reserve Bank of India's Central Office.
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/FED/2025-26/29
A.P. (DIR Series) Circular. No 02/2025-26 April 22, 2025
To,
All Authorised Dealer Category-I banks and Authorised banks
Madam / Sir,
Amendments to Directions - Compounding of Contraventions under FEMA,
1999
Attention of Authorised Dealer (AD) Category - I banks is invited to the Guidelines
for compounding of contraventions under FEMA, 1999, issued vide A.P. (DIR
Series) Circular No. 17/2024-25 dated October 1, 2024.
2. The provision contained at Paragraph 5.4.II.v of the aforesaid Circular, to link the
Sum for which contravention is compounded (‘compounding amount’) payable to
earlier compounding order, has been reviewed. In such cases, the applicant shall
be deemed to have made a fresh application, and the compounding amount payable
shall not be linked to the earlier compounding order. Accordingly, Paragraph 5.4.II.v
of the A.P. (DIR Series) Circular No. 17/2024-25 dated October 1, 2024, stands
deleted.
3. Further, as per the instructions laid down in Part B of Annexure I to the aforesaid
Circular, when making payment through electronic mode, applicants are required to
send an email communication to the concerned office of the Reserve Bank to
reconcile the application fee/compounding amount received against the
compounding applications submitted.
4. However, it has been observed that in some cases applicants do not make
payment to the correct office of the Reserve Bank, and/or there is a delay in
submitting the compounding application after making the application fee payment.
These issues create difficulties in reconciling the received amounts and lead to
delays in processing compounding applications. To address these challenges and
improve turnaround time for processing compounding applications, it has been
�वदेशी मुद्रा �वभाग, केंद्र�य कायालर् य, केंद्र�य कायालर् य भवन, शह�द भगत �सहं माग,र् फोटर्, मुंबई-400 001, भारत
Foreign Exchange Department, Central Office ,Central Office Building., Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India
टेल�फोन/Tel. No.022-22601000 फैक्स/Fax No. 022- 22665330 अमर भवन फोन 022-22603000 फैक्स 22694935, ईमेल: helpfed@rbi.org.in
�हदं � में काम करना आसान है, इसका प्रयोग बढ़ाइए ।भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
www.rbi.org.in
decided to include the following additional details in Part B of Annexure I of the
above-referred circular:
• Mobile number of the applicant/ authorised representative.
• Office of the Reserve Bank (i.e., Central Office, Regional Office or FED CO
Cell) to which the payment was made.
• Mode of submission of application (through PRAVAAH/ Physical).
5. The ‘Directions on Compounding of Contraventions under FEMA, 1999’
issued vide A.P. (DIR Series) Circular No. 17/2024-25 dated October 1, 2024, shall
accordingly be updated to reflect the above changes.
6. All AD Category-I banks and Authorised banks may bring the guidelines
contained in this circular to the notice of their constituents.
Yours faithfully,
(Dr. Aditya Gaiha)
Chief General Manager in Charge
�वदेशी मुद्रा �वभाग, केंद्र�य कायालर् य, केंद्र�य कायालर् य भवन, शह�द भगत �सहं माग,र् फोटर्, मुंबई-400 001, भारत
Foreign Exchange Department, Central Office ,Central Office Building., Shahid Bhagat Singh Road, Fort, Mumbai-400 001, India
टेल�फोन/Tel. No.022-22601000 फैक्स/Fax No. 022- 22665330 अमर भवन फोन 022-22603000 फैक्स 22694935, ईमेल: helpfed@rbi.org.in
�हदं � में काम करना आसान है, इसका प्रयोग बढ़ाइए ।