Reserve Bank of India (RBI) has issued directions on compounding of contraventions under FEMA, 1999. What is contravention and compounding of contravention under FEMA, 1999? Contravention is a breach of the provisions of the Foreign Exchange Management Act (FEMA), 1999 and rules, regulations, etc. issued thereunder. Compounding refers to the process of voluntarily admitting the contravention, pleading guilty and seeking redressal. What is be the penalty for contravention under FEMA, 1999? In terms of Section 13(1) of the FEMA, 1999, if any person contravenes any provision of FEMA, 1999, or any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorization is issued by RBI, he shall, upon adjudication, be liable to – Penalty up to thrice the sum involved in such contravention where the amount is quantifiable, or Penalty up to ₹2 lakhs where the amount is not directly quantifiab...