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Associate in General Corporate Practice at Mumbai office of Cyril Amarchand Mangaldas, Siddharth can be reached at siddharth.shukla@cyrilshroff.com

The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024

The Reserve Bank of India (“RBI”) vide its circular dated May 21, 2024 (“Circular”),[1] has required that issuance of partly paid-up units by Alternative Investment Funds (“AIFs”) to foreign investors prior to March 14, 2024, should be regularised through compounding under Foreign Exchange Management Act, 1999 (“FEMA”). Compounding by RBI is prescribed for the contravention of foreign exchange regulations as per Foreign Exchange (Compounding Proceedings) Rules, 2000, and involve payment of a fees. In many instances, compounding requires payment of a monetary penalty to RBI.Continue Reading The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024