Compounding & Regularisation
FEMA contraventions do not expire; they wait. A filing missed in 2019, shares allotted a week late, a pricing breach nobody noticed, a downstream investment never intimated — each sits in the entity's history until a funding round, an exit, an audit, or a bank's KYC review surfaces it. At that point the contravention has acquired leverage: counterparties discount for it, banks hesitate over it, and timelines bend around it. The RBI's compounding process exists precisely to end this — a formal admission, a computed payment, and a closed matter.
We manage compounding from assessment to disposal. The entity's FEMA history is reconstructed honestly — including the contraventions nobody has found yet, because an application that omits them fails at its purpose; applications are prepared with the candour and context that the RBI's compounding orders visibly reward; computation exposure is estimated in advance so the decision to compound is made on numbers; and proceedings are managed through to the order and payment that convert an open liability into a closed file.
What this covers
- FEMA health checks: full reconstruction of the entity's compliance history against its obligations.
- Exposure estimation: likely compounding amounts computed before you commit to the process.
- Compounding applications prepared with complete disclosure and effective context.
- Proceeding management through the RBI's compounding cell to order and payment.
- Pre-transaction cleanup programs: history settled on your timetable, before diligence prices it.
Who needs this
Companies preparing for fundraises, exits, or audits with imperfect FEMA histories; acquirers pricing discovered contraventions; and boards that would rather close legacy issues than carry them.
How we deliver
- FEMA history reconstructed honestly, including the contraventions not yet found.
- Exposure estimated in advance so the compounding decision is made on numbers.
- Applications prepared with candour and context, managed through to order and payment.
Why A2 Consultants
We have taken enough matters through RBI compounding to know what the orders reward: complete disclosure, sensible context, and applications that make the officer's decision easy — which is precisely how ours are written.
Engagement & what to expect
Compounding engagements open with the health check: the entity's complete FEMA history reconstructed over three to six weeks, contraventions identified honestly, and exposure estimated so the decision to compound is made on numbers. Application preparation follows for the matters worth settling — drafted with full disclosure and effective context, filed with the RBI's compounding cell, and managed through queries to order and payment. Typical end-to-end timelines run four to nine months. Pre-transaction cleanup programs compress this where deal calendars demand, prioritising the contraventions a diligence exercise would price hardest.
Every contravention is cheapest the day you address it and priciest the day someone else finds it — settle history while it is still yours to settle.