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ARTICLE · 09 MAY 2025

Master Direction On Compounding Of Contraventions Under FEMA, 1999

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The Reserve Bank of India (RBI), in alignment with the recently notified Foreign Exchange (Compounding Proceedings) Rules, 2024, has issued the Master Direction – Compounding of Contraventions under FEMA, 1999, vide notification no. RBI/FED/2025-26/135 dated April 22, 2025, and further amended the same via A.P. (DIR Series) Circular No. 04/2025-26 dated April 24, 2025.

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The Reserve Bank of India (RBI), in alignment with the recently notified Foreign Exchange (Compounding Proceedings) Rules, 2024, has issued the Master Direction – Compounding of Contraventions under FEMA, 1999, vide notification no. RBI/FED/2025-26/135 dated April 22, 2025, and further amended the same via A.P. (DIR Series) Circular No. 04/2025-26 dated April 24, 2025.

The updated Master Direction consolidates and clarifies the compounding procedures under the Foreign Exchange Management Act, 1999 (FEMA), and harmonizes them with the revised 2024 Rules. A detailed summary of the key procedural and substantive changes can be found in our note on the Foreign Exchange (Compounding Proceedings) Rules, 2024 at https://rbi.org.in

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