CONTRAVENTIONS UNDER THE FEMA.

As the Indian economy had opened its economic barriers in front of the World for attracting Foreign investment to India and relaxed many of the stringent norms for related compliances under the Make In India scheme many of us are under the impression that the Foreign exchange can be brought into India without any formalities. Even though the Government is trying to cut down the bureaucratic involvement to the maximum extent possible, there are certain mandatory timelines and compliances to be observed while accepting foreign direct investment. If the Indian Entity or the investor as the case may be is not adhering to the specified timelines and compliances , the same will be considered as an Offence under FEMA.

Compounding of Offences. The provisions of section 15 of Foreign Exchange Management Act, 1999 (42 of 1999) hereinafter referred to as FEMA, 1999, permit compounding of contraventions and, as such it empowers the Reserve Bank to compound any contravention as defined under section 13 of the FEMA, 1999, except the contraventions under section 3 (a) of FEMA, 1999, on an application made by the person committing such contravention. Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules), as amended from time to time, lays down the basic framework for the compounding process.

Delegation of Powers to Regional Offices Compounding powers have been delegated to the Regional Offices of the Reserve Bank of India to compound the following contraventions of FEMA, 1999.