The Reserve Bank of India (RBI), on October 23, 2026, notified the Delegation of Compounding of certain Contraventions under FEMA, 1999 to the Regional Offices of the Reserve Bank.
The following has been stated:
• RBI has delegated powers to select Regional Offices to compound contraventions relating to Overseas Investment, Borrowing and Lending, and Guarantee transactions under the Foreign Exchange Management Act (FEMA), 1999, to improve customer service. Compounding applications relating to overseas investment contraventions under the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2000 and 2004, the Foreign Exchange Management (Overseas Investments) Rules, 2022, the Overseas Investments Regulations, 2022, and other related provisions shall be submitted to the designated RBI Regional Office based on the prefix of the Unique Identification Number (UIN) allotted to the foreign entity, overseas joint venture or wholly owned subsidiary.
• Applications involving overseas investments for which no UIN has been allotted shall be submitted to the Cell for Effective Implementation of FEMA (CEFA), Foreign Exchange Department, RBI Central Office, Mumbai. Compounding applications relating to borrowing and lending in foreign exchange or rupees and guarantees under the applicable FEMA Regulations, 2000, 2018 and 2026 shall be submitted to the RBI Regional Office having jurisdiction over the registered office of the Indian company/entity or its place of domicile, as applicable.
• However, applications relating to lending or guarantee transactions undertaken towards a foreign entity in which the applicant has made an Overseas Direct Investment (ODI) shall follow the overseas investment submission procedure. Applications involving contraventions across multiple transaction categories governed by different rules or regulations, for which compounding powers have been delegated to different offices, shall be submitted to CEFA at the RBI Central Office, Mumbai.
• The Master Directions on Compounding of Contraventions under FEMA, 1999, dated April 22, 2025, will be updated accordingly. All Authorised Dealer (AD) Category-I banks and other Authorised Persons are required to inform their constituents of these directions.
[Notification No. - RBI/FED/2026-27/298 A.P. (DIR Series) Circular. No 28/2026-27]
