This Circular has been Superseded vide:- RBI/FED/2024-25/78 A.P. (DIR Series) Circular.No.17/2024-25 dt. 01.10.2024
RBI/2020-21/67
A.P. (DIR Series) Circular No. 06
November 17, 2020
To
All Category-I Authorised Dealer Banks
Madam / Sir
Foreign Exchange Management
Act, 1999 (FEMA)- Compounding of Contraventions under FEMA, 1999
The attention of Authorized Dealer Category-I (AD Category-I) banks is invited
to paragraph 3 of the Master Direction on “Compounding of Contraventions under
FEMA, 1999”, in terms of which the powers to compound certain contraventions of
Notifications FEMA 20/2000-RB dated May 3, 2000 and FEMA 20(R)/2017-RB dated
November 07, 2017 have been delegated to the Regional Offices/Sub-Offices of the
Reserve Bank for enhanced customer service and operational conveninece. The
Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and Foreign
Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments)
Regulations, 2019 i.e. Notification No. FEMA.395/2019-RB, both notified on
October 17, 2019, by Government of India and Reserve Bank of India respectively
have since superseded the earlier Notification No. FEMA 20(R)/2017-RB.
Accordingly, the compounding powers stand delegated to the Regional Offices/ Sub
Offices of the Reserve Bank to compound the following contraventions.
|
FEM (Non - Debt Instruments) Rules, 2019 dated October 17, 2019 |
| Rule 2(k) read with Rule 5 |
| Rule 21 |
| Paragraph 3 (b) of Schedule I (Issue of shares without approval of RBI or Government, wherever required) |
| Rule 4 (Receiving investment in India from non-resident or taking on record transfer of shares by Investee Company) |
| Rule 9(4) and Rule 13(3) |
|
FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations dated October 17, 2019 |
| Regulation 3.1(I)(A) |
| Regulation 4(1) |
| Regulation 4(2) |
| Regulation 4(3) |
| Regulation 4(6) |
| Regulation 4(7) |
| Regulation 4(11) |
2. Please refer to para 3.5 of
A.P. (DIR Series) Circular No. 56 dated June 28, 2010 and para 2 of A.P. (DIR
Series) Circular No.11 dated July 31, 2012 with respect to the classification of
a contravention under FEMA by the Reserve Bank as ‘technical’ or ‘material’ or
‘sensitive/serious in nature’. On a review it has been decided to discontinue
the classification of a contravention as ‘technical’ that was dealt with by way
of an administrative/ cautionary advice and regularize such contraventions by
imposing minimal compounding amount as per the compounding matrix as contained
in the ‘Master Direction - Compounding of Contraventions under FEMA, 1999’ dated
January 01, 2016, as amended from time to time.
3. Please refer to para 3(I) of A.P. (DIR Series) Circular No.73 dated May 26,
2016 with respect to public disclosure of Compounding Orders. On a review and in
partial modification of earlier instructions it has been decided that in respect
of the Compounding Orders passed on or after March 01, 2020 a summary
information, instead of the Compounding Orders, shall be published on the Bank’s
website in the following format:
|
Sr. No. |
Name of the Applicant |
Details of contraventions (provisions of the Act/Regulation/Rules compounded) |
Date of compounding order |
Amount imposed for compounding of contraventions |
4. The aforesaid Master Direction
No. 4 dated January 01, 2016, as amended from time to time, is being updated to
reflect the changes. AD Category - I banks should bring the contents of this
circular to the notice of their constituents and customers concerned.
5. The directions contained in this circular have been issued under section
10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions/approvals, if any, required under any other
law.
Yours faithfully
Ajay Kumar Misra
Chief General Manager-in-Charge