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.
- 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. |
FEMA Regulation |
Brief Description of Contravention |
| 1 |
Paragraph 9(1)(A) of Schedule I to
FEMA 20/2000-RB
dated May 3, 2000 |
Delay in reporting inward remittance received for
issue of shares. |
| 2 |
Paragraph 9(1)(B) of Schedule I to
FEMA 20/2000-RB
dated May 3, 2000 |
Delay in filing form FC(GPR) after issue of shares. |
| 3 |
Paragraph 8 of Schedule I to
FEMA 20/2000-RB dated
May 3, 2000 |
Delay in issue of shares/refund of share application
money beyond 180 days, mode of receipt of funds, etc. |
| 4 |
Paragraph 5 of Schedule I to
FEMA 20/2000-RB dated
May 3, 2000 |
Violation of pricing guidelines for issue of shares. |
| 5 |
Regulation 2(ii) read with Regulation 5(1) of
FEMA
20/2000-RB dated May 3, 2000 |
Issue of ineligible instruments such as
non-convertible debentures, partly paid shares, shares with optionality
clause, etc. |
| 6 |
Paragraph 2 or 3 of Schedule I to
FEMA 20/2000-RB
dated May 3, 2000 |
Issue of shares without approval of RBI or FIPB
respectively, wherever required. |
- The above contraventions can be compounded by all Regional Offices (except
Kochi and Panaji) without any limit on the amount of contravention. Kochi and
Panaji Regional offices can compound the above contraventions for amount of
contravention below Rupees one hundred lakh (Rs.1,00,00,000/-). The
contraventions above Rupees one hundred lakh (Rs.1,00,00,000/-) under the
jurisdiction of Panaji and Kochi Regional Offices and all other contraventions
of FEMA will continue to be compounded at Cell for Effective Implementation of
FEMA (CEFA), Mumbai, as hitherto.
- Accordingly, applications for compounding related to the above contraventions
may be submitted by the concerned entities to the respective Regional Offices
under whose jurisdiction they fall. For all other contraventions, applications
may continue to be submitted to CEFA, Foreign Exchange Department, 5th floor, Amar Building, Sir P.M.Road, Fort, Mumbai 400001.
- The above modifications will come into force with immediate effect. All other
instructions on compounding shall remain unchanged.
- Authorised Dealers may bring the contents of this circular to the notice of
their constituents and customers concerned.
- The directions contained in this circular have been issued under sections 10
(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
Yours faithfully
(Rudra Narayan Kar)
Chief General Manager-In-Charge