RBI delegated authority to compound certain FEMA contraventions to its regional offices to streamline enforcement and reduce pendency.
Delegation of FEMA Compounding Powers to RBI Regional Offices
On October 23, 2026, the RBI issued a circular (A.P. (DIR Series) Circular No. 28/2026-27) delegating authority to compound certain contraventions under the Foreign Exchange Management Act, 1999 (FEMA) to its regional offices. This aims to expedite resolution of minor violations and reduce administrative burden on head office mechanisms.
The delegation applies to specified offences, including procedural lapses in reporting foreign inflows, minor discrepancies in export declarations, and untimely filings under FEMA. Regional offices may now adjudicate compounding applications within defined monetary and procedural limits. The move aligns with Master Directions on Compounding of Contraventions under FEMA, 2015, as amended.
Legal practitioners should note that this decentralisation can shorten resolution timelines for clients. However, cases involving serious violations or repeat offenders remain with the central compounding authority. Lawyers should assess jurisdiction early and file applications at the appropriate regional office to expedite closure of FEMA proceedings.
Citations
- Foreign Exchange Management Act, 1999 (42 of 1999)
