The text outlines amendments to compounding directions for contraventions under the Foreign Exchange Management Act (FEMA), 1999. It specifically addresses Authorised Dealer Category I banks and Authorised banks, informing them of updated guidelines regarding the imposition of maximum compounded amounts for contravening regulations or rules in FEMA applicable across multiple contravention scenarios. The text highlights that these enhancements ensure compounding amounts are capped at INR 2,00,000 per regulation or rule, contingent upon approval from a compounding authority considering various factors such as the nature of contravention, exceptional circumstances, involved facts, and public interest. This update aims to provide clearer direction for institutions dealing with contraventions under FEMA.
Key Entities Referenced
RESERVE BANK OF INDIA: The central bank of India, the issuer of this circular.
RBIFED20252632: Reference number of the circular.
A.P. DIR Series Circular No 04202526: Series and number of the circular.
April 24, 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 law under which contraventions are compounded.
Directions for compounding of contraventions under FEMA, 1999: Refers to the directions regarding compounding contraventions under FEMA.
A.P. DIR Series Circular No. 17202425: An earlier circular related to compounding of contraventions, dated October 1, 2024.
October 1, 2024: Date of A.P. DIR Series Circular No. 17202425.
Master Directions on compounding of contraventions under FEMA, 1999: Master directions regarding compounding contraventions under FEMA.
April 22, 2025: Date of the Master Directions on compounding of contraventions under FEMA, 1999.
INR 2,00,000: The capped amount for contravention of each regulation/rule.
Foreign Exchange Department, Central Office: Department and office of the Reserve Bank of India issuing the circular.
Central Office Building., Shahid Bhagat Singh Road, Fort, Mumbai400 001, India: Address of the Central Office of the Reserve Bank of India.
Foreign Exchange Management Act, 1999: The act under which the directions are issued.
Dr. Aditya Gaiha: Chief General Manager in Charge at Reserve Bank of India.
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/FED/2025-26/32
A.P. (DIR Series) Circular. No 04/2025-26 April 24, 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
i. Directions for compounding of contraventions under FEMA, 1999,
issued vide A.P. (DIR Series) Circular No. 17/2024-25 dated October
1, 2024 and
ii. Master Directions on compounding of contraventions under FEMA,
1999, dated April 22, 2025
2. On a review, it is decided that the following clause shall be inserted as Para
5.4.II.vi in aforementioned Master Directions.
“vi. Subject to satisfaction of the compounding authority, based on the nature of
contravention, exceptional circumstances/ facts involved in case, and in wider public
interest, the maximum compounding amount imposed may be capped at INR
2,00,000/- for contravention of each regulation/ rule (applied in a compounding
application) with respect to contraventions under row 5 of the above computation
matrix.”
3. The aforesaid Master Directions shall accordingly be updated to reflect the above
change.
4. All AD Category-I banks and Authorised banks may bring the guidelines
contained in this circular to the notice of their constituents.
�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
5. The Directions contained in this circular have been issued under sections 10(4)
and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and/or
without prejudice to permissions/approval, if any, required under any other law.
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 ।