The Central Government vide its notification, has amended the Compounding Proceeding Rules, which shall be referred to as Foreign Exchange (Compounding Proceedings) Rules, 2024. These rules shall be in supersession with erstwhile rules i.e. the Foreign Exchange (Compounding Proceedings) Rules, 2000.

The gist of the proposed amendments is summarized in the table below:

Sr. No.	Particulars	Proposed Amendment	Comments
1.	Compounding authorities of the Reserve Bank to compound various contraventions	in a case, where the sum involved in such contravention does not exceed INR 6 million, an officer not below the rank of the Assistant General Manager of the Reserve Bank; in a case, where the sum involved in such contravention does not exceed INR 25 million, an officer not below the rank of the Deputy General Manager of the Reserve Bank; in a case, where the sum involved in such contravention does not exceed INR 50 million, an officer not below the rank of the General Manager of the Reserve Bank; and in a case, where the sum involved in such contravention is above INR 50 million, an officer not below the rank of the Chief General Manager of the Reserve Bank, may compound the contravention in accordance with the rules.	The revised rules have increased the limits of the sum involved in contravention for each of the officers of the RBI for handling compounding matters. Hence, this will reduce the burden and dependency on higher officers of RBI for compounding matters. This will also reduce the time required for compounding.
2.	Increase in compounding application fees	The fees for making the compounding application is INR 10,000 + applicable GST.	The amended rules have increased the application fees from INR 5,000 to INR 10,000.
3.	Mode of payment of application fees and compounding amount	The application fees and compounding amount can be paid by demand draft or NEFT, or RTGS, or such other permissible electronic or online modes of payment in favor of the compounding authority.	Earlier, such an amount was accepted only in form of a demand draft. However, the amended rules have widened the mode of payment of application fees and compounding amount. Hence, the payment can be made online as well (e.g. NEFT, RTGS and other permissible online mode)
4.	Contraventions not to be compounded in certain cases	No contravention shall be compounded: where the amount involved is not quantifiable; or where the provisions of Section 37A of the The Foreign Exchange Management Act, 1999 (the Act) are applicable; or where the Directorate of Enforcement is of the view that the proceeding relates to a serious contravention suspected of money laundering, terror financing or affecting the sovereignty and integrity of the nation, the compounding authority shall not proceed with the matter and shall remit the case to the appropriate Adjudicating Authority for adjudicating contravention under Section 13; or where the Adjudicating Authority has already passed an order imposing a penalty under Section 13 of the Act; or where the compounding authority is of the view that the contravention involved requires further investigation by the Directorate of Enforcement to ascertain the amount of contravention under Section 13 of the Act.	These amendment rules specifically cover cases where compounding is not allowed. Hence, the matter involving money laundering, terror finance and cases falling under Section 37A are not eligible for compounding.
5.	Continuation of pending proceedings	Any compounding application pending before the compounding authority, on the date of commencement of these rules, shall be governed by the provisions of the Foreign Exchange (Compounding Proceedings) Rules, 2000 superseded herein.	The on-going compounding matters as on the date of commencement of these new rules shall continue to be governed by the erstwhile rules i.e. the Foreign Exchange (Compounding Proceedings) Rules, 2000.