FEMA delay regularisation

Assessment and deliverables

We establish the underlying transaction date, applicable requirement, reports already filed and the nature of the delay. Late reporting and a substantive contravention should not be treated as interchangeable problems.

The work produces a chronology, evidence file and route assessment for discussion with the bank or specialist adviser. Where appropriate, preparation of delayed reports, explanations or a compounding dossier is separately agreed.

Build an event chronology that separates the transaction, the reporting obligation identified for review, attempted submissions and subsequent correspondence. Record the evidence for each date and flag uncertain facts. This helps the adviser determine whether the issue is a missing report, an incomplete submission, an unresolved query or a different problem requiring another response.

Prepare the evidence

• Transaction agreements and dated corporate records
• Bank entries and remittance evidence
• Original and corrected reporting acknowledgements
• Notices, bank queries and earlier advice

Preserve original acknowledgements and query messages alongside corrected documents. Identify which version was actually submitted and whether a later response received an acknowledgement or decision. Where the business cannot locate an old record, document the search and missing evidence rather than reconstructing a submission history as though it were confirmed.

A practical example

Discovering an unreported investment during an audit calls for both a reporting review and confirmation that the investment itself met the relevant conditions.

For the investment discovered during an audit, reconcile the funding and corporate records first, then compare them with the available reporting file. Keep the question of transaction eligibility separate from the question of when or whether reporting occurred. The audit finding may identify the issue, but it is not itself a decision on the corrective route.

Scope and fees

Payment of a late fee should not be represented as curing every defect. RBI’s compounding directions, paragraph 4.2, require the necessary administrative action before processing a compounding application. Identify the transaction-specific corrective steps separately from preparing the application. Eligibility for a particular remedy and authority decisions require case-specific review.

The proposal identifies the transactions and periods covered, client approvals, query support and professional fees. Government charges and external certifications are separate unless expressly included.

The handover identifies the proposed action, documents needed, submissions made and decisions still outstanding. Retain payment evidence separately from any order or confirmation that establishes the outcome. Agree who will monitor follow-up conditions and keep the file open until the relevant evidence supports closure; preparing an explanation does not amount to regularisation.