FEMA compounding for overseas investment, ECB now goes to RBI regional offices

In short: FPAC

FFacts

A.P. (DIR Series) Circular No 28/2026-27 dated October 23, 2026 delegates compounding powers for Overseas Investment and Borrowing and Lending, and Guarantees transactions to select Regional Offices of the Reserve Bank.

PProvisions and law

Issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999), updating the Master Directions on Compounding of Contraventions under FEMA, 1999 dated April 22, 2025 and A.P. (DIR Series) Circular No. 17/2024-25 dated October 1, 2024.

AAnalysis

Overseas investment cases go to the Regional Office mapped to the UIN prefix of the foreign entity, while borrowing, lending and guarantee cases go to the office having jurisdiction over the registered office or place of domicile. Cases with no UIN allotted, and mixed category cases, still go to CEFA, Central Office, Mumbai.

CConclusion

Check your UIN prefix or registered office before filing a FEMA compounding application, as the correct office has changed for most cases.

What to do

1. InformationIdentify the UIN prefix of the foreign entity, joint venture or wholly owned subsidiary, or the registered office or place of domicile for borrowing, lending and guarantee cases.
2. DiscussionDecide whether the contravention falls in one category or spans multiple categories, since mixed cases still go to CEFA, Central Office, Mumbai.
3. FormsFile the compounding application with the correct Regional Office as listed in the circular and Part C of Annexure I to the Master Directions dated April 22, 2025.
4. DeliverablesCompounding application filed with the right office, with acknowledgement on record.

Steps follow IDFD: Information, Discussion, Forms, Deliverables.