RBI Modifies FEMA Compounding Directions and Bank Account Details
- Blog|News|FEMA & Banking|
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- Last Updated on 26 November, 2025
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Circular No. A.P. (DIR Series) Circular. No 15/2025-26, Dated: 24.11.2025
1. Overview
The Reserve Bank of India (RBI) has issued amendments to the Master Directions on Compounding of Contraventions under the Foreign Exchange Management Act (FEMA), 1999.
The modifications specifically relate to Annexure I, which contains the bank account details used for:
- Payment of the compounding application fee, and
- Payment of the sum for which the contravention is compounded.
2. Key Modification – Change of Designated Bank Account
To promote uniformity, ease of reconciliation, and streamlined processing of payments, the RBI has:
-
Revised the designated bank account for receiving both types of payments, i.e.,
- Compounding application fee, and
- Compounding amount.
-
The new bank account details have been incorporated in the updated Annexure I to the Master Directions.
Payments must now be made only to the new NEFT/RTGS-enabled account as specified in the revised annexure.
3. Instructions to Authorised Persons (APs)
Authorised Persons, including banks and other licensed entities, have been directed to:
- Notify and sensitise their constituents regarding the updated payment process,
- Ensure that customers use the new RBI-designated account, and
- Facilitate compliance with the revised procedure.
This communication requirement is intended to avoid delays, incorrect remittances, and processing inefficiencies.
4. Statutory Basis
The circular has been issued under the powers conferred by:
- Section 10(4) of FEMA, 1999 – binding directions to Authorised Persons, and
- Section 11(1) of FEMA, 1999 – empowering RBI to issue instructions to ensure compliance with the Act.
5. Significance
The procedural update will:
- Enhance accuracy and consistency in compounding-related payments,
- Reduce administrative burden and reconciliation issues,
- Improve turnaround time in processing applications, and
- Ensure alignment with RBI’s broader objective of digital and procedural simplification.
Click Here To Read The Full Circular
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