RBI Broadens Cross-Border Merger Approval Framework

Notification no. FEMA 389(1)/2026-RB; Dated: 29.05.2026

The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026, introducing amendments to the regulatory framework governing cross-border mergers and amalgamations under the Foreign Exchange Management Act (FEMA).

The amendments primarily expand the scope of authorities recognised for approving merger and amalgamation schemes by introducing the concept of a “Competent Authority” and replacing references to the National Company Law Tribunal (NCLT) in specified regulations.

1. New Definition of “Competent Authority” Introduced

The amendment inserts a new clause (iia) in Regulation 2 defining the term “Competent Authority”.

Under the amended regulations, “Competent Authority” means:

Any authority empowered under the Companies Act, 2013, or any subordinate legislation made thereunder, to approve a scheme of merger or amalgamation.

The definition broadens the regulatory framework by recognising authorities other than the NCLT that may be legally empowered to approve merger or amalgamation schemes.

2. References to NCLT Replaced With “Competent Authority”

The amendment further replaces the term “NCLT” with “Competent Authority” in the following provisions of the principal regulations:

• Regulation 4
• Regulation 5
• Regulation 7
• Regulation 9

As a result, references to approval or actions by the NCLT under these provisions will now be interpreted as references to the relevant competent authority empowered under the Companies Act, 2013 or related legislation.

3. Wider Applicability for Cross-Border Merger Approvals

By substituting the term “NCLT” with “Competent Authority,” the amended framework accommodates changes in corporate law and regulatory structures that may empower different authorities to approve schemes of merger or amalgamation.

The amendment ensures that the FEMA framework remains aligned with the approval mechanisms prescribed under company law.

4. Impact on Cross-Border Mergers and Amalgamations

The amendment does not alter the substantive requirements governing cross-border mergers. Instead, it updates the regulatory language to ensure that references to approving authorities remain relevant where merger or amalgamation schemes are approved by authorities other than the NCLT.

This provides greater flexibility and legal consistency in implementing cross-border merger transactions.

5. Objective of the Amendment

The amendment aims to harmonise the FEMA cross-border merger framework with the Companies Act, 2013 and related subordinate legislation by recognising any duly empowered authority as the approving authority for merger and amalgamation schemes.

By introducing the concept of a Competent Authority and replacing references to the NCLT, RBI seeks to ensure that the cross-border merger regulations remain adaptable to evolving corporate regulatory structures while maintaining continuity in regulatory compliance.

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