Practice · FEMA / RBI

Every rupee has a regulatory home.

FEMA governs every financial transaction an NRI or OCI holder makes with India — not just repatriation, but account opening, property purchase, FDI and even family gifts. Most breaches are accidental. We map the rules before the money moves.

The compliance map

Four rails, each with its own rulebook.

Account architecture

NRE, NRO, FCNR and resident accounts each have distinct opening, funding, repatriation and redesignation rules. The wrong account for the wrong source is a daily FEMA breach.

Property & remittance

Property sale, gift, inheritance and rental income each need a specific banking path. NRO for Indian-source proceeds. NRE for inward remittance. Direct overseas wiring is not allowed.

FDI reporting

Investment into Indian companies triggers FC-GPR (allotment) and FC-TRS (transfer) filings. Late or missing filings block downstream repatriation and invite RBI scrutiny.

Compounding & remediation

Historic account misuse, missed filings, wrong routing or old defaults can often be regularised through RBI compounding. The key is a documented, chronological evidence pack.

Common mistake

Assuming FEMA only matters for large transfers.

A family gift of ₹10 lakh from a resident parent to an NRI child can be a FEMA breach if it does not route through the correct account. A missed FC-GPR filing on a ₹5 lakh startup investment blocks all future repatriation of dividends or exit proceeds. FEMA applies to the structure, not just the size — the same logic runs through NRI investment and FEMA compliance for inbound capital from foreign parents and OCI investors.

OCI-specific FEMA guide→

Common questions

Answered, candidly.

Do small gifts between family members need FEMA compliance?: Yes. Even intra-family gifts must route through permitted accounts with proper documentation. The amount does not exempt the transaction from FEMA.
What happens if I missed an FC-GPR filing years ago?: Late filing is possible with RBI, sometimes with a penalty. More importantly, the missing filing blocks downstream repatriation — dividends, capital reduction or share sale proceeds cannot leave India cleanly until it is on record.
Can I regularise old account breaches without penalty?: Sometimes. RBI compounding allows voluntary disclosure and settlement for many historic defaults. The outcome depends on the breach type, amount, duration and whether it was disclosed voluntarily or detected.

Related situations

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