RBI mandates submissions on PRAVAAH portal and issues amendment to Direction – Compounding of Contraventions under FEMA, 1999

RBI has introduced two significant updates aimed at enhancing efficacy, streamlining application processes, and promoting transparency and digitization in regulatory frameworks.

a) RBI has mandated the submission of applications concerning authorizations, licenses, and approvals on the PRAVAAH portal, effective from 1 May 2025. This initiative is designed to achieve end-to-end digitization, thereby enhancing efficiency and timeliness in service delivery. Currently, 108 forms are accessible on the PRAVAAH portal, with plans to introduce additional forms in the future. Applications for which a specific form is not available may be submitted using the general-purpose form.

b) RBI has issued amendments to the Directions on Compounding of Contraventions under FEMA. The amendments are reflected in the revised Directions dated 22 April 2025 and are aimed at streamlining the reconciliation process and improving accuracy in tracking payments, further enhancing transparency and efficiency.

The key changes are outlined below:

• The provision requiring a 50% enhancement of the earlier unpaid compounding amount for applicants reapplying for the same transaction has been deleted. Such applicants will now be treated as making a fresh application, with the compounding amount not linked to prior orders.
  
  
• To address delays in processing applications caused by incorrect payments or mismatched data (such as where applicants fail to make payment to the correct office of RBI), applicants must now provide the following additional details:
  
  • Mobile number of the applicant/authorized representative
  • Office of RBI where payment was made (Central Office, Regional Office, or FED CO Cell) 
  • Mode of submission of the application (via PRAVAAH or physical submission)
     
• A cap on the compounding amount at INR 2,00,000 has been introduced based on the nature of contraventions, exceptional circumstances (subject to specific fact analysis), and in wider public interest. This change applies specifically to ‘other non-reporting contraventions’.
  
  

Source: Press Release 2025-2026/96 dated 11 April 2025, A.P. (DIR Series) Circular No. 02/2025-26 dated 22 April 2025 and Circular No. 04/2025-26 dated 24 April 2025