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RBI amends Cross Border Merger Regulations to broaden the approving authority
The Reserve Bank of India (RBI) has amended the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (Principal Regulations) vide Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026, to align the cross-border merger framework with the expanded scheme of approval authorities under the Companies Act, 2013.
Through this amendment, the term National Company Law Tribunal (NCLT) has been substituted with ‘Competent Authority’, which has been defined as any authority empowered under the Companies Act, 2013 or subordinate legislation thereunder to approve a scheme of merger or amalgamation.
Prior to this amendment, Foreign Exchange Management Act (FEMA regulations recognized only the NCLT for approving merger schemes and did not account for fast-track mechanisms introduced under the Companies Act, 2013 which allow approvals by the Regional Director (RD), thereby leading to uncertainty on RBI approval requirement in cross-border mergers through RD route.
This new framework ensures that approval by any authority competent to sanction a scheme under the Companies Act, 2013 framework can suffice for the purposes of cross-border merger regulations under FEMA and accordingly does not require prior RBI approval expanding the Fast Track Merger (FTM) route.
Source: Notification No. FEMA 389(1)/2026-RB dated 29 May 2026