RBI Mandates Quarterly Reporting Under FEM (Guarantees) Regulations 2026

Notification No. F. No. FEMA 8(R)/2026-RB; Dated: 06.01.2026

1. Introduction

The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Guarantees) Regulations, 2026 vide Notification No. FEMA 8(R)/2026-RB dated 06-01-2026, introducing a comprehensive regulatory framework governing guarantees involving persons resident in India and outside India.

2. Scope of the Regulations

The Regulations lay down the conditions under which a person resident in India may act as a surety, principal debtor, or creditor in relation to a guarantee. These provisions aim to ensure regulatory oversight over cross-border guarantee transactions under FEMA.

3. Guarantees in Favour of Residents

Under the Regulations, a person resident in India, acting as a creditor, may obtain a guarantee in its favour, subject to the condition that both the principal debtor and the surety are persons resident outside India. This provision facilitates overseas credit arrangements while maintaining FEMA compliance.

4. Reporting and Compliance Requirements

The Regulations mandate quarterly reporting of guarantees to the RBI in Form GRN. Entities are required to submit accurate and timely information, with provisions introduced for levy of Late Submission Fees (LSF) in case of delayed reporting.

5. Conclusion

By notifying the FEM (Guarantees) Regulations, 2026, RBI has strengthened the regulatory framework governing guarantee transactions involving residents and non-residents. The introduction of structured reporting through Form GRN is expected to enhance transparency, monitoring, and FEMA compliance.

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