SIMPLIFIED, FAIR, AND FORWARD-LOOKING: RBI’S REVAMP OF FEMA COMPOUNDING GUIDELINES

Published On: 05/05/2025

Practice Area: Corporate & Commercial

Authors:

Recently, the Reserve Bank of India (RBI) has revamped its FEMA compounding guidelines to make compliance simpler, fairer, and more efficient. Key updates in the amendment include the removal of penalty escalation for reapplications, the introduction of a penalty cap on non-reporting violations, and a streamlined payment tracking process. These changes signal a shift toward a more facilitative regulatory environment. INDUSLAW's Winnie Shekhar, Harsha Tiwari and Khushi Vardhan discuss the key amendments to the compounding guidelines and analyse its potential implications for stakeholders.