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Corporate Laws Central Ministry of Finance Foreign Exchange Management Act, 1999

Master Directions - Compounding of Contraventions under FEMA, 1999

22-Apr-2025 | RBI/FED/2025-26/135 FED Master Direction No.04/2025-26

RBI has issued the circular regarding Master Directions - Compounding of Contraventions under FEMA, 1999 effective from 22nd April, 2025. Key highlights are as follows: 1. This master direction is applicable to all Authorised Dealer Category - I banks and Authorised banks. 2. An applicant may submit a compounding application, along with the relevant documents, physically or through PRAVAAH Portal of the Reserve Bank. 3. The aim of the directions is to provide a facility for compounding of contraventions as specified in the Foreign Exchange Management Act, 1999 to persons involved in foreign exchange transactions in case they contravene or violate any provisions of the FEMA Act, Rules, Regulations, etc. 4. The applicant is required to pay the compounding amount as specified in the compounding order by way of a demand draft, NEFT or RTGS such other permissible electronic or online modes of payment within 15 days from the date of the order of compounding of such contravention. It may be ensured that intimation of payment of the amount for which the contravention is compounded shall be made as soon as possible, but not later than 2 hours from the time of payment in the template specified. 5. List of cases which are not eligible for compounding are also specified. 6. The current direction supercedes the Master Direction- Compounding of Contraventions under FEMA, 1999, (Updated as on May 24, 2022) Also, all AD Category - I banks and Authorised banks may bring the guidelines contained in this circular to the notice of their constituents.

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