RBI Caps FEMA Compounding Penalty at ₹2 Lakh for Exceptional Circumstances

RBI has capped the penalty for compounding FEMA offenses at ₹1 lakh for exceptional circumstances. Compounding is a mechanism under FEMA to settle contraventions by paying a penalty instead of facing legal proceedings. This cap provides a limit on the financial penalty that can be imposed in cases deemed exceptional by the RBI. This measure introduces a degree of predictability and potential relief in penalty amounts for certain FEMA violations, particularly those that do not involve significant mala fide intent or economic impact.