RBI frames procedure for compounding of contravention of FEMA

By Vijay Kumar

The power to compound contravention (remember it is no more offence) under FEMA is vested with the RBI for most cases and Enforcement Directorate for hawala cases. Now the RBI has framed the procedure for applying for compounding with a view to provide comfort to the citizens and corporate community by minimizing transaction costs, while taking severe view of wilful, malafide and fraudulent transactions.

1) Application in the prescribed form to the competent authority with the fee and memorandum to The Compounding Authority, [Cell for Effective implementation of FEMA (CEFA)], Foreign Exchange Department, 110th Floor, Central Office Building, S. B. Singh Road, Fort, Mumbai- 400001.

2) Proceedings to be completed within 180 days.
3) Compounded amount to be paid within fifteen days.

RBI Circular No. 31 dated 1.2.2005