RBI
The Reserve Bank of India (RBI) has issued circular that mainly focuses on the updated provisions related to compounding of contraventions under the FEMA (Foreign Exchange Management Act), 1999. This circular clarifies the calculation method for compounding amounts, particularly in cases where foreign exchange laws are breached, such as delays in share allotments or non-refunding of amounts within stipulated timeframes.
Key points include:
- Compounding Amounts: The circular specifies how the compounding amounts are calculated based on the time of contravention and provides a graded scale depending on the delay.
- Hearing and Process: It emphasizes that the applicant is provided with an opportunity for a personal hearing, which can be done in person or virtually, with a preference for virtual hearings to streamline the process.
- Payment Terms: Once the compounding order is issued, the payment must be made within 15 days, and non-payment will be considered as if no application was ever made.
These updates ensure transparency and efficiency in handling foreign exchange violations and provide clear guidelines for contraveners.
Circular No. 17/2024-25 dated 01.10.2024
