RBI Delegates More FEMA Compounding Powers to Regional Offices
Current · Source: Reserve Bank of India · RBI/2013-14/553 · issued 04 Apr 2014 · ~2 min read
Quick answerRBI has expanded regional offices' authority to compound six specific FEMA contraventions related to foreign direct investment, with no monetary limit for most offices, effective immediately. Kochi and Panaji offices can handle cases up to ₹1 crore.
The rule, in the simplest words
RBI (India's central bank) gave more power to its local offices to fix certain FEMA (foreign money rules) mistakes, so you don't have to go to Mumbai.
For 6 specific FDI (foreign investment) rule breaks, like reporting shares late or wrong pricing, most local RBI offices can now handle any amount with no limit.
Kochi and Panaji offices can only fix mistakes if the amount is less than ₹1 crore (10 million rupees); bigger cases still go to CEFA (the main office) in Mumbai.
Banks and customers can now go to their nearest RBI regional office for these fixes, which should make things faster and easier.
How it plays out — a real example
A forex & trade-finance officer in Indore has a customer who forgot to report a share issuance on time. Instead of sending the paperwork to Mumbai, the officer now tells the customer to visit the Indore RBI regional office, where they can fix the mistake right away with no upper limit on the amount.
What changed
RBI delegated additional compounding powers to all Regional Offices (except Kochi and Panaji) for six specified FEMA contraventions without any upper limit on the contravention amount. Kochi and Panaji Regional Offices can compound these contraventions only if the amount is below ₹1 crore; cases above that threshold remain with CEFA, Mumbai.
What it means for you
Banks and their customers can now approach their local RBI Regional Office for compounding of common FDI-related violations like delayed reporting of share issuance or pricing guideline breaches, instead of having to go to Mumbai. This decentralization should speed up resolution and reduce compliance burden for entities in most regions, though Kochi and Panaji still face a cap.
What you must do
Update your internal FEMA compliance manuals to reflect the expanded compounding powers at Regional Offices.
Advise customers with pending FDI contraventions to apply to their respective Regional Office for eligible cases.
Ensure customers understand that Kochi and Panaji offices can only handle contraventions below ₹1 crore; larger cases go to CEFA, Mumbai.
Monitor RBI circulars for any further delegation or changes to compounding procedures.
Who it affects
All Category-I Authorised Dealer Banks, Entities with FEMA contraventions related to FDI (share issuance, pricing, instruments), RBI Regional Offices (especially Kochi and Panaji), CEFA, Mumbai
❓ Common questions
Which specific FEMA contraventions can now be compounded at Regional Offices?
Six contraventions: delay in reporting inward remittance for share issue, delay in filing FC-GPR, delay in issuing shares or refunding application money beyond 180 days, violation of pricing guidelines, issue of ineligible instruments like non-convertible debentures, and issue of shares without RBI or FIPB approval.
Is there any monetary limit for compounding at Regional Offices?
For most Regional Offices (excluding Kochi and Panaji), there is no limit. For Kochi and Panaji, the limit is below ₹1 crore; above that, cases go to CEFA, Mumbai.
When did this change take effect?
The circular was issued on April 4, 2014, and the modifications came into force with immediate effect.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/553
A.P. (DIR Series) Circular No.117
April 4, 2014
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Foreign Exchange Management Act, 1999 (FEMA)
Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules) -
Compounding of Contraventions under FEMA, 1999
Attention of all the Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR Series) Circular no. 57 dated December 13, 2011 and the Foreign Exchange (Compounding Proceedings) Rules, 2000 notified by the Government of India vide G.S.R.No.383(E) dated 3rd May 2000, as amended from time to time regarding delegation of powers to the Regional Offices of the Reserve Bank of India to compound the contraventions of FEMA.
2. On a review, it has been decided to delegate further powers to the Regional Offices of Reserve Bank of India. Accordingly, the powers to compound the following contraventions will now be vested with the Regional Offices:
Sr. No.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/553 · issued 04 Apr 2014. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All Category-I Authorised Dealer Banks, Entities with FEMA contraventions related to FDI (share issuance, pricing, instruments), RBI Regional Offices (especially Kochi and Panaji), CEFA, Mumbai), your first concrete step on “RBI Delegates More FEMA Compounding Powers to Regional Offices” is: “Update your internal FEMA compliance manuals to reflect the expanded compounding powers at Regional Offices.” (RBI issued this 04 Apr 2014).
Circular: RBI/2013-14/553 -- RBI Delegates More FEMA Compounding Powers to Regional Offices
Issued: 04 Apr 2014
Action required: Update your internal FEMA compliance manuals to reflect the expanded compounding powers at Regional Offices.
Action required: Advise customers with pending FDI contraventions to apply to their respective Regional Office for eligible cases.
Action required: Ensure customers understand that Kochi and Panaji offices can only handle contraventions below ₹1 crore; larger cases go to CEFA, Mumbai.
Action required: Monitor RBI circulars for any further delegation or changes to compounding procedures.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8825&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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