RBI Withdraws Obsolete FEMA Circulars to Streamline Foreign Exchange Regulations

Ø 732 Circulars Listed in Annex

1. Regulatory rationalisation initiative

o The Reserve Bank of India (RBI) has undertaken a review of circulars issued under the Foreign Exchange Management Act, 1999 as part of its ongoing effort to simplify and streamline the foreign exchange regulatory framework.

2. Review period

o The review covered circulars issued since 1 June 2000.

3. Withdrawal of outdated circulars

o RBI has decided to withdraw the circulars listed in the Annex to the notification.

4. Reasons for withdrawal

o The affected circulars have:

§ Become non-operative due to subsequent regulatory changes.

§ Become redundant or obsolete.

§ Overlapped with other regulations.

§ Been superseded by newer directions and guidelines.

5. No change in current regulatory position

o The withdrawal is primarily an administrative and regulatory clean-up exercise and does not necessarily introduce new foreign exchange rules.

6. Directions to Authorised Persons

o Banks and other Authorised Persons (APs) dealing in foreign exchange have been instructed to inform their customers and stakeholders about the withdrawal.

7. Legal basis

o The circular has been issued under:

§ Section 10(4) of FEMA, which empowers RBI to issue directions to Authorised Persons.

§ Section 11(1) of FEMA, which empowers RBI to regulate foreign exchange transactions and ensure compliance.

8. Other approvals remain applicable

o The withdrawal does not affect any permissions, approvals, or clearances that may be required under other laws or regulatory frameworks.

Significance

· Simplifies FEMA compliance by removing outdated and unnecessary circulars.

· Reduces regulatory clutter and improves clarity for banks, businesses, and investors.

· Enhances ease of doing business by making foreign exchange regulations easier to navigate.

· Promotes a principle-based regulatory framework with fewer overlapping directives.

· Reflects RBI's broader effort to modernize India's foreign exchange management regime.

Key Takeaway

The RBI's withdrawal of obsolete FEMA circulars is a regulatory housekeeping measure aimed at creating a cleaner, more coherent foreign exchange framework. By removing redundant and superseded directives, the central bank seeks to improve regulatory clarity, compliance efficiency, and ease of doing business while retaining all currently applicable FEMA regulations.

[RBI/2026-27/175 - A.P. (DIR Series) Circular No. 18 dated June 24, 2026]

Review of Circulars issued under Foreign Exchange Management Act, 1999 (FEMA)

In pursuance of the Reserve Bank’s ongoing initiative to rationalise the regulatory framework under the Foreign Exchange Management Act, 1999 (FEMA), a review of circulars issued since June 01, 2000, has been undertaken. The circulars, as listed at Annex, that have ceased to be operative owing to subsequent regulatory amendments, redundancy, overlap or supersession by newer directives, are being withdrawn.

2. Authorised Persons may bring the contents of this circular to the notice of their constituents concerned.

3. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.