Pay up for violation of forex rules or face action: RBI

The Reserve Bank of India (RBI) today said persons charged with violation of the Foreign Exchange Management Act (FEMA) should apply for compounding, which is paying a sum to get relief from punitive action under the act, at the earliest.

"The persons concerned should... In their own interest submit their applications for compounding of contravention under FEMA to the Reserve Bank at the earliest opportunity," the RBI said in a statement.

The central bank said a decision on the exact pattern of treating contraventions under FEMA would be based on the merit of each individual case.

"...Persons who have contravened provisions of FEMA should not take upon themselves, suo moto or on the basis of external advice, to decide whether a particular contravention is of a technical or minor in nature and, hence, no compounding application need be submitted to the RBI," it said.

The bank further added that anybody who fails to submit such an application is liable to face provisions of FEMA as decided by the authorities.

The RBI had issued a circular in June prescribing certain procedures for compounding of contravention under FEMA to make the process more streamlined.