Reserve Bank of India (“RBI”) with powers conferred under Section 15 of the Foreign Exchange Management Act, 1999 (“FEMA Act”) vide Circular No. RBI/FED/2025-26/135 dated April 22, 2025, issued the Master Direction consolidating all applicable instructions relating to the Compounding of Contraventions under the FEMA Act (“Master Directions”).[1] This step follows the issuance of the Foreign Exchange (Compounding Proceedings) Rules, 2024 by the Government of India, which supersedes the earlier 2000 Rules.
The Master Directions aim to streamline and provide clarity on the compounding process, ensuring greater consistency and efficiency in handling such matters. It consolidates all past instructions, circulars, and notifications into one comprehensive framework and can be accessed on the RBI official website.
[1] https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12839&Mode=0#FN2