Question 1

What is a compounding application with RBI?

Accepted Answer

A compounding application with RBI is a request made by an entity to settle regulatory violations/contraventions by paying a penalty rather than going through legal proceedings. This process allows for a quicker and more straightforward resolution of the issue.

Question 2

What is the master direction issued by RBI?

Accepted Answer

The master direction issued by the RBI is a comprehensive set of guidelines and instructions provided to regulated entities. These directions cover various aspects of financial and banking regulations, ensuring compliance with RBI’s policies.

Question 3

What is the penalty for compounding under FEMA?

Accepted Answer

The penalty for compounding under FEMA (Foreign Exchange Management Act) depends on the nature and severity of the contravention. The RBI assesses the case and determines the penalty, which must be paid to settle the violation.

Question 4

What is the compounding fee under FEMA?

Accepted Answer

The compounding fee under FEMA is the monetary penalty determined by the RBI for settling a contravention. The fee varies based on the specific violation and is specified in the compounding order issued by the RBI.

Question 5

When will RBI issue a Compounding Order?

Accepted Answer

The RBI issues a Compounding Order after reviewing the compounding application and assessing the nature of the violation. The order specifies the penalty amount and terms of settlement. It is issued once the RBI is satisfied with the application and the entity's corrective measures.

Question 6

What does compounding of contravention mean?

Accepted Answer

Compounding of contravention refers to the process of resolving regulatory breaches or violations by paying a monetary penalty. It allows an entity to settle the issue without facing more severe legal action or prosecution.

Question 7

What is a compounding application?

Accepted Answer

A compounding application is a request made to a legal authority to settle a violation or offence without going to court. This is often done by paying a fee or fine. The compounding process is a way to resolve minor legal issues quickly and easily.

Question 8

What is the compounding of offense in RBI?

Accepted Answer

Compounding of offense in RBI refers to the resolution of regulatory violations by paying a penalty, as an alternative to legal proceedings. This process is designed to facilitate a quicker and less disruptive resolution of contraventions.

Question 9

How do I file a Compounding of Contravention application under the FEMA Act of 1999?

Accepted Answer

To file a Compounding of Contravention application under the FEMA Act of 1999, an entity must submit a formal application to the RBI detailing the nature of the contravention, corrective measures taken, and any supporting documentation. The RBI will then review the application and decide on the appropriate penalty.

Question 10

What is the penalty for compounding under FEMA?

Accepted Answer

The penalty for compounding under FEMA is the amount specified by the RBI in the compounding order. It varies based on the specifics of the contravention and is determined after reviewing the compounding application.

Question 11

What is compounding under FEMA regulations?

Accepted Answer

Compounding under FEMA regulations refers to the process of settling violations of the Foreign Exchange Management Act by paying a monetary penalty, as opposed to undergoing legal proceedings. It is a method to resolve issues efficiently while ensuring compliance with FEMA provisions.

RBI Compounding Application

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