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ARTICLE · 02 FEBRUARY 2026

RBI Notifies Foreign Exchange Management (Guarantees) Regulations, 2026.

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RBI, through notification dated 06.01.2026, notified the Foreign Exchange Management (Guarantees) Regulations, 2026 ("Guarantee Regulations 2026")...

IndiaFinance and Banking
Sagus Legal LLP
Sagus Legal LLP

RBI, through notification dated 06.01.2026, notified the Foreign Exchange Management (Guarantees) Regulations, 2026 (“Guarantee Regulations 2026”)1 to supersede the Foreign Exchange Management (Guarantees) Regulations, 2000.

The salient features of the Guarantee Regulations 2026 are as follows:

  1. Definition of “Guarantee”: shall include ‘counter guarantee' and mean to be a contract, by whatever name called, to perform the promise, or discharge a debt, obligation or other liability (including portfolio of debts, obligations or other liabilities), in case of default by the principal debtor.
  2. Prohibition: Unless permitted under the Foreign Exchange Management Act, 1999 (“FEMA”), no person resident in India may be a party, i.e. – either as principal debtor, surety or creditor, to a guarantee where any of the parties to such guarantee involve any person resident outside India.

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