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FEMA Compounding ServicesAvoid long litigation—settle FEMA contraventions through compounding with RBI

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Compounding of FEMA Offences
In today’s globalized world, Indian businesses and individuals frequently engage in cross-border transactions such as Foreign Direct Investment (FDI), ODI, ECBs, and remittances. These transactions are governed by the Foreign Exchange Management Act (FEMA), 1999. Non-compliance with FEMA provisions—such as delayed filings of FDI forms (FC-GPR/FC-TRS), ODI APRs, or non-reporting of ECBs—can result in regulatory scrutiny and penalties. Fortunately, the RBI allows regularization through Compounding of FEMA Offences, a voluntary mechanism where contraventions are acknowledged, penalties are paid, and the matter is settled without litigation. At Dikshant Malhotra & Associates, we provide end-to-end FEMA compounding assistance—from identifying contraventions to preparing applications and liaising with RBI until successful closure.Benefits of FEMA Compounding
Avoid Prosecution & Litigation – Settle non-compliances out of court.
Regulatory Relief – Gain peace of mind and restore compliance credibility.
Business Continuity – Prevent operational and reputational risks.
Clean Record for Future Approvals – Smoothen future RBI and FEMA-related filings.
Quick Resolution – Most cases are resolved within 180 days by RBI.
Our FEMA Compounding Services
Compliance Review – Identification of FEMA contraventions and risk assessment.
Compounding Advisory – Advisory on eligibility, applicable provisions, and expected penalties.
Application Drafting & Filing – Preparation of compounding application with RBI.
Documentation Assistance – Drafting of declarations, resolutions, and annexures.
RBI Representation – Liaising with RBI for clarifications and hearings (if required).
Post-Compounding Support – Guidance on future compliance to avoid repeated defaults.
Process of FEMA Compounding
Assessment of Contravention – Review of delayed/non-filed FEMA returns.
Preparation of Application – Drafting & filing in prescribed form to RBI.
Submission of Documents – Supporting evidence, resolutions, and declarations.
RBI Review & Clarifications – RBI may seek additional information.
Penalty Determination & Payment – Penalty decided by RBI to be paid within stipulated time.
Closure Order – RBI issues compounding order, regularizing the contravention.
Why Choose DMA for FEMA Compounding?
Strong expertise in FEMA, RBI Regulations & Cross-Border Compliances.
Extensive experience in handling FDI, ODI, ECB, and remittance-related contraventions.
Professional representation and smooth liaisoning with RBI & AD Banks.
End-to-end support ensuring timely closure and minimal penalties.
Relevant Provisions
Section 13 of FEMA, 1999 – Penalty for contraventions.
Section 15 of FEMA, 1999 – Compounding of contraventions by RBI.
RBI Master Direction on Compounding of Contraventions, 2016 (updated periodically).
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Frequently Asked Questions

Q1. What type of FEMA offences can be compounded?

Q2. Who is the compounding authority under FEMA?

Q3. What is the timeline for FEMA compounding?

Q4. What happens if compounding is not done?

Q5. Can repeated offences be compounded?

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