The Reserve Bank of India has expanded the role of select regional offices in handling compounding applications linked to overseas investments, borrowing and lending, and guarantees. The move changes where applicants must submit several categories of FEMA contravention cases.
BKK Bureau, New Delhi | 23 October 2026 | 8:57 PM IST
The Reserve Bank of India has delegated powers to compound certain contraventions under the Foreign Exchange Management Act, 1999, to select regional offices. The change covers applications involving overseas investment, borrowing and lending, and guarantees that were previously being received at the RBI’s Central Office.
The directions were issued through A.P. (DIR Series) Circular No. 28/2026-27 dated October 23, 2026, addressed to all Authorised Dealer Category-I banks and other authorised persons. The RBI said the delegation was intended as a measure to promote customer service. The circular was issued under Sections 10(4) and 11(1) of FEMA.
Overseas investment applications
For contraventions connected with overseas investment transactions, applications must generally be submitted according to the prefix of the Unique Identification Number assigned to the relevant foreign entity, overseas joint venture or overseas wholly owned subsidiary.
- Ahmedabad will handle UINs with the prefix AH.
- Bengaluru will handle UINs beginning BG.
- Mumbai will handle UINs beginning BL, BY or PJ.
- Kolkata will handle UINs beginning BN, CA, GA or GH.
- New Delhi will handle UINs beginning CG, JM, JR, KA, ND, PT or WR.
- Hyderabad will handle UINs beginning HY.
- Chennai will handle UINs beginning KO or MA.
The delegated overseas-investment category includes contraventions under the Foreign Exchange Management regulations governing the transfer or issue of foreign securities, the 2022 Overseas Investments Rules and Regulations, and other FEMA provisions where the contravention relates to the underlying overseas investment transaction. Applications involving cases for which no UIN was allotted must be submitted to the Cell for Effective Implementation of FEMA, or CEFA, at the RBI’s Foreign Exchange Department Central Office in Mumbai.
Borrowing, lending and guarantees
For contraventions involving borrowing or lending and guarantees, applications must be submitted to the regional office having jurisdiction over the registered office of the Indian company or entity concerned, or over the applicant’s place of domicile, as applicable. The relevant jurisdictional details are set out in Part C of Annexure I to the RBI’s Master Directions on Compounding of Contraventions under FEMA, dated April 22, 2025.
This part of the delegation covers provisions under the 2000 regulations on borrowing or lending in foreign exchange, borrowing and lending in rupees, and guarantees. It also covers the 2018 Borrowing and Lending Regulations and the Foreign Exchange Management (Guarantees) Regulations, 2026.
The RBI has specified a separate routing rule where lending or guarantee transactions concern a foreign entity in which the applicant has made an overseas direct investment. In such cases, the application must be submitted according to the overseas-investment procedure based on the relevant UIN, rather than solely according to the location of the Indian applicant.
Cases involving multiple categories
Applications involving contraventions across multiple transaction categories, where the relevant compounding powers have been delegated to different offices, may be submitted to CEFA at the RBI Central Office in Mumbai. The central bank said its Master Directions on Compounding of Contraventions under FEMA will be updated to reflect the changes.
The RBI has directed Authorised Dealer Category-I banks and other authorised persons to bring the circular’s guidelines to the notice of their constituents. The circular also states that the directions do not remove any permission or approval that may be required under another law.
Why it matters
The delegation gives businesses and other applicants a clearer regional route for FEMA compounding applications involving overseas investments, borrowing, lending and guarantees. It also establishes separate handling rules for UIN-based overseas-investment cases, location-based borrowing and guarantee cases, and applications spanning multiple transaction categories.
Source: Reserve Bank of India
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