RBI’s A.P. (DIR Series) Circular No. 28/2026-27, issued on 23 October 2026, decentralises the compounding of certain FEMA contraventions. The correct filing office now depends on the transaction category, the UIN prefix and, in some cases, the applicant’s registered office or domicile.
What compounding means
Compounding is a voluntary process in which a person admits a FEMA contravention and seeks resolution for a specified amount. RBI’s FAQ says an individual or corporate may apply after becoming aware of the contravention—either suo motu or after receiving a memorandum—subject to the exclusions in FEMA and the Compounding Proceedings Rules, 2024.
The 23 October circular is relevant to Indian companies, LLPs, other entities and individuals preparing applications connected with overseas investment, external or other borrowing and lending, or guarantees. It does not by itself decide whether a particular breach is compoundable.
The new routing rules
1. Overseas-investment contraventions: follow the UIN prefix
| UIN prefix | RBI Regional Office |
|---|---|
| AH | Ahmedabad |
| BG | Bengaluru |
| BL, BY or PJ | Mumbai |
| BN, CA, GA or GH | Kolkata |
| CG, JM, JR, KA, ND, PT or WR | New Delhi |
| HY | Hyderabad |
| KO or MA | Chennai |
If no UIN was allotted, the application goes to the Cell for Effective implementation of FEMA (CEFA), Foreign Exchange Department, RBI Central Office, 11th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400001.
2. Borrowing, lending and guarantee contraventions
These applications generally go to the RBI Regional Office having jurisdiction over the registered office of the Indian company or entity, or the applicant’s place of domicile. Part C of Annexure I to RBI’s Master Directions contains the jurisdiction list.
There is one important override: if the lending or guarantee was given to a foreign entity in which the applicant made ODI, use the overseas-investment route above—normally the UIN-prefix office.
3. Mixed-category applications
If one application covers multiple transaction categories whose compounding powers belong to different offices, it may be submitted to CEFA at RBI Central Office in Mumbai. The circular does not specify a later commencement date, so an application being filed now should follow this routing.
Practical filing checklist
- Identify every contravention and governing regulation. Separate overseas investment from borrowing/lending, guarantees and any other FEMA category before choosing the office.
- Confirm the UIN and transaction link. A lending or guarantee contravention connected with an ODI foreign entity follows the overseas-investment route.
- Complete the administrative action first. RBI says requisite approvals and compliances must be completed before compounding; an incomplete application or one with pending administrative action can be returned.
- Prepare the prescribed form and annexures. Applications may be submitted physically or through RBI’s PRAVAAH portal with the relevant FDI, ECB, ODI or other annexure and supporting documents.
- Pay the application fee correctly. The prescribed fee is ₹10,000 plus applicable GST, currently 18%. For an electronic payment, RBI’s FAQ requires the payment intimation to reach the relevant office by email as soon as possible and no later than two hours after payment.
- Track the statutory process. RBI states that a complete application is to be processed within 180 days. If a compounding order is issued, the amount must be paid within 15 days; the rules provide no appeal, reduction request or extension of that payment period.
What businesses should do now
Before dispatching or submitting an application, update the covering letter and payment instructions for the correct office. Reconcile the UIN, applicant address, transaction documents and AD-bank reporting trail. Where several breaches arise from one set of cross-border transactions, map each category first rather than assuming the registered-office Regional Office will handle the entire case.
Reviewed on 27 October 2026. This is a general explanation of RBI’s filing-office change, not a conclusion that a particular FEMA contravention is eligible for compounding or advice on the amount payable.