RBI looks to rationalise norms for guarantees issued under FEMA
This story was originally published at 19:17 IST on 14 August 2025
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--RBI releases draft norms for guarantees issued under FEMA
--RBI: To rationalise norms pertaining to guarantees issued under FEMA
--RBI seeks comment on draft norms for guarantees issued under FEMA by Sept 4
--RBI: Proposed norms for guarantees issued under FEMA principle based
--RBI: Moot expanding guarantees enabled under automatic route under FEMA
MUMBAI – The Reserve Bank of India Thursday released draft regulations for guarantees under the Foreign Exchange Management Act, 1999 as it looks to rationalise norms to promote ease of doing business. The central bank has sought comments on the proposed regulations by Sept. 4, the RBI said in a release.
The regulations for guarantees are principle based and those that involves cross border transactions are proposed to be under automatic route with the condition that the underlying transaction, and the transactions resulting from invocation of guarantee do not contravene the regualtions under FEMA, the release said. Moreover, the draft norms also seeks to expand the guarantees which are enabled under automatic route. The central bank thus attempts to introduce a comprehensive manner of reporting all gaurantees which are issued and invoked under the proposed expansion. In its annual report for 2024-25 (Apr-Mar), the central bank had said that it was reviewing the FEMA norms draft regulations to simplify the guarantees issued. End
Reported by Vidhushi RajPurohit and Shubham Rana
Edited by Akul Nishant Akhoury
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