Parliament Question: Compounding Offences under FEMA

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE LOK SABHA UN-STARRED QUESTION NO. 1353 TO BE ANSWERED ON MONDAY, JULY 27, 2026/ SHRAVANA 5, 1948 (SAKA) Compounding Offences under FEMA 1353. Shri Azad Kirti Jha: Will the Minister of FINANCE be pleased to state: (a) whether the Government has revised or streamlined the process for compounding offences under the Foreign Exchange Management Act (FEMA) in coordination with the Reserve Bank of India, if so, the details thereof; (b) the number of FEMA cases disposed of through compounding during the last five years and the current year, year-wise, along with the total amount of penalties imposed and recovered during the said period; (c) whether the Enforcement Directorate has issued No Objection Certificates (NOCs) in such cases, if so, the number of such cases in which NOCs have been issued, sector-wise and year-wise; (d) the criteria and safeguards adopted by the Government to determine eligibility for compounding, including cases involving large-value violations; and (e) whether the Government has assessed the impact of the revised compounding mechanism on reducing litigation, improving compliance and ensuring timely disposal of FEMA cases and if so, the details thereof? ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY) (a) Government has notified the Foreign Exchange (Compounding Procedures) Rules, 2024 on 12th September, 2024 which has replaced the Foreign Exchange (Compounding Procedures) Rules, 2000. Further, RBI has issued Master Directions - Compounding of Contraventions under FEMA, 1999, dated April 22, 2025 as updated from time to time listing out the consolidated operational instructions on filing of compounding applications with RBI. (b) and (c) The details of year-wise data on compounding applications disposed along with the amount imposed and received is as per Annexure. Of the applications disposed, No Objection Certificates (NoCs) were obtained from the Directorate ofEnforcement in 79 cases. Sector wise data is not maintained. The year-wise breakup of cases is as follows: Year No. of cases Apr 2021 - Mar 2022 12 Apr 2022 - Mar 2023 18 Apr 2023 - Mar 2024 16 Apr 2024 - Mar 2025 14 Apr 2025 - Mar 2026 18 Apr 2026 - Jul 20, 2026 01 Total 79 (d) The criteria and safeguards for compounding the application in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2024 are categorically provided in the Rules. (e) No such information is available. *****Annexure Year-Wise data on compounding applications disposed along with the amount imposed and received ( Amount in rupees) Year Applications Amount Imposed Amount Disposed Received Apr 2021 - Mar 2022 599 67,84,30,214.60 67,84,30,214.60 Apr 2022 - Mar 2023 664 62,68,87,800.60 59,62,89,521.60 Apr 2023 - Mar 2024 752 53,97,77,744.30 53,97,77,744.30 Apr 2024 - Mar 2025 757 93,11,53,736.30 65,46,15,506.30 Apr 2025 - Mar 2026 858 67,56,77,913.30 34,39,03,228.60 Apr 2026 – Jul 20, 40 96,80,132.50 94,36,998.00 2026