RBI Revises FEMA Compounding Rules: Penalty Capped at Rs 2 Lakh

RBI has revised the FEMA (Foreign Exchange Management Act) compounding rules, capping the penalty at ₹2 lakh. Compounding allows settling FEMA contraventions by paying a penalty instead of legal proceedings. The revised rules aim for a simpler, less punitive approach for minor violations. Capping the penalty at ₹2 lakh provides clarity and reduces the financial burden for inadvertent FEMA breaches. This is expected to ease compliance and resolution of FEMA cases.