RBI/FED/2025-26/135 FED Master Direction No.04/2025-26 — THE RESERVE BANK OF INDIA ACT, 1934

RBI/FED/2025-26/135 FED Master Direction No.04/2025-26 To, All Authorised Dealer Category – I banks and Authorised banks Madam / Sir, Master Directions -Compounding of Contraventions under FEMA, 1999 The provisions of section 15 of Foreign Exchange Management Act, 1999 (42 of 1999) [hereinafter referred to as 'FEMA, 1999'], enable compounding of contraventions and, empowers the Reserve Bank to compound any contravention as defined under section 13 of the FEMA, 1999, except the contraventions under section 3 (a) of FEMA, 1999, on an application made by the person committing such contravention. Government of India vide Notification G.S.R. 566 (E). dated September 12, 2024, has notified the Foreign Exchange (Compounding Proceedings) Rules, 2024 in supersession of the Foreign Exchange (Compounding Proceedings) Rules, 2000. Instructions issued on "Compounding of Contraventions under FEMA, 1999" have been compiled in this Master Direction. The list of underlying circulars/ notifications which form the basis of this Master Direction is furnished in the Appendix . Further, in terms of Section 11 (2) of FEMA, 1999, the Reserve Bank may, for the purpose of ensuring the compliance with the provisions of the Act or of any rule, regulation, notification, direction or order made thereunder, direct any authorized person to furnish such information, in such manner, as it deems fit. Authorised Dealers are therefore, advised to take necessary steps to ensure that checks and balances are incorporated in systems relating to dealing with and reporting of foreign exchange April 22 , 2025 (Updated as on April 24, 2025) transactions so that contraventions of provisions of FEMA, 1999 , attributable to the Authorised Dealers do not occur. In this connection, it is reiterated that in terms of Sec