RBI Regional Offices can now compound FEMA contraventions on ODI, borrowing and guarantees
TaxByKK · Compliance News · taxbykk.com23 Oct 2026
In short
The Reserve Bank of India has delegated the power to compound FEMA contraventions on overseas investment (ODI), borrowing and lending, and guarantees to its Regional Offices. Until now these applications were received only at the Central Office in Mumbai; FDI-related cases were already handled by the Regional Offices.
- Authority
- Reserve Bank of India, Foreign Exchange Department
- Circular
- A.P. (DIR Series) Circular No. 28/2026-27 (RBI/FED/2026-27/298) dated 23 October 2026
- Type
- Circular
- Effective from
- 23 October 2026
- Law
- FEMA, 1999, sections 10(4) and 11(1); Master Directions on Compounding of Contraventions under FEMA, 1999 (22 April 2025)
- Applies to
- AD Category-I banks, Authorised Persons and their customers
What changed
| Item | Before | Now |
|---|---|---|
| Compounding of overseas investment (ODI) contraventions | Central Office, Mumbai | Regional Office picked by the UIN prefix of the foreign entity, JV or WOS |
| Compounding of borrowing and lending, and guarantee contraventions | Central Office, Mumbai | Regional Office with jurisdiction over the registered office or place of domicile |
| Cases mixing several categories of transactions | Central Office (CEFA) | No change: still CEFA, Central Office, Mumbai |
For ODI cases the Regional Office follows the first letters of the UIN: Ahmedabad (AH), Bengaluru (BG), Mumbai (BL, BY, PJ), Kolkata (BN, CA, GA, GH), New Delhi (CG, JM, JR, KA, ND, PT, WR), Hyderabad (HY) and Chennai (KO, MA). Lending or guarantees given to the foreign entity in which the applicant has made ODI are treated as ODI cases. The Master Directions will be updated to match.
Who it applies to
- Indian companies, LLPs and individuals with overseas investments (ODI) who have missed a FEMA filing or approval
- Borrowers and lenders under ECB and rupee borrowing or lending rules, and those who gave or received guarantees
- CAs and company secretaries who prepare compounding applications
- AD Category-I banks, who must tell their customers
What to do
- Check which category your contravention falls in: ODI, borrowing and lending, guarantees, or a mix.
- For ODI, read the UIN prefix of the foreign entity and file with the matching Regional Office from the list above.
- For borrowing, lending and guarantees, file with the Regional Office that covers the registered office (or domicile), as listed in Part C of Annexure I to the Master Directions.
- If the contraventions span more than one category, file with CEFA at the Central Office, Mumbai.
- Applications already filed at the Central Office: watch for any transfer communication before refiling.
Reference
RBI/FED/2026-27/298, A.P. (DIR Series) Circular No. 28/2026-27, 23 October 2026, Foreign Exchange Department, Central Office, Mumbai. Read with A.P. (DIR Series) Circular No. 17/2024-25 (1 October 2024) and the Master Directions on Compounding of Contraventions under FEMA, 1999 (22 April 2025).
Read the official PDF: RBI circularWritten by TaxByKK from the official notification. Check the official text before you act on it.
Frequently asked questions
Where do I file a FEMA compounding application for an ODI contravention now?
With the RBI Regional Office matching the UIN prefix of the foreign entity, for example New Delhi for UINs starting ND, Mumbai for BY.
Where do borrowing, lending and guarantee compounding applications go?
To the RBI Regional Office having jurisdiction over the registered office of the Indian company or the applicant's place of domicile.
Which cases still go to the RBI Central Office?
Applications covering contraventions under several sets of rules or regulations that are handled by different offices go to CEFA, Foreign Exchange Department, Central Office, Mumbai.
From when does this apply?
From the date of the circular, 23 October 2026.