To ensure more transparency and greater disclosure, the Reserve Bank of India will now place on its website the compounding orders passed on or after June 01, 2016 and also a guidance note on the methodology used for calculation of the amount imposed under the compounding process, for information of general public. The data will be updated at monthly intervals. It may, however, be noted that the guidance note is meant only for the purpose of broadly indicating the basis on which the amount to be imposed is determined by the compounding authorities in the Reserve Bank. The actual amount imposed may sometimes vary, depending on the circumstances of the case taking into account other relevant factors. These are detailed in the updated Master Direction on Compounding which is available on the Reserve Bank’s website www.rbi.org.in

Compounding is a voluntary process whereby persons, who have contravened the provisions of the Foreign Exchange Management Act 1999 (FEMA) or the Rules/Regulations framed under FEMA, apply to the Reserve Bank seeking compounding of contraventions. The contraventions are compounded in terms of the powers given to the Reserve Bank under the Foreign Exchange (Compounding Proceedings) Rules, 2000, as amended from time to time and orders are issued imposing an amount to be paid by the applicant.

Alpana Killawala
Principal Adviser

Press Release : 2015-2016/2756