Finance ministry amends compounding rules for offences under Fema

The Finance Ministry on Thursday modified the compounding rules for offences under the Foreign Exchange Management Act (FEMA) by raising the monetary limits for adjudications by RBI officials and allowing online payments.

As per the Foreign Exchange (Compounding Proceedings) Rules, 2024, the fees for filing compounding application has been doubled to Rs 10,000 plus GST, from Rs 5,000 earlier.

The notification further said that Assistant General Manager rank officials of the RBI can decide on compounding application of up to Rs 60 lakh, up from Rs 10 lakh earlier.

Similarly, the monetary limits for Deputy GM and General Manager rank officers have been raised to Rs 2.5 crore and Rs 5 crore respectively.

Chief General Manager in the RBI will be authorised to decide on compounding cases of above Rs 5 crore.

In a statement, the Finance Ministry said the Foreign Exchange (Compounding Proceedings) Rules, 2024, will replace the Rules issued in 2000.

In pursuance of the Union Budget 2024-