The Reserve Bank of India (RBI) has taken action against Sai Rayalaseeema Paper Mills and Cigniti Technologies Limited for contraventions under the Foreign Exchange Management Act, 1999 (FEMA). The compounding orders, issued under Section 15 of FEMA, led to the termination of proceedings against these companies with one-time fines. Sai Rayalaseeema Paper Mills faced a penalty of Rs 19.18 lakh for FEMA violations.
In a similar case, Cigniti Technologies Limited and its Managing Director, C. V. Subramanyam, were also subject to a compounding order by the RBI under Section 15 of FEMA. The termination of proceedings against them was finalized with a one-time payment of Rs 13.82 lakh by Cigniti Technologies and Rs 1.38 lakh by Subramanyam. Additionally, ZIFY TECH Solutions Private Limited faced a compounding order from the RBI for FEMA violations, resulting in a one-time payment of Rs 26,080 for delays in filing inward remittances.
The compounding mechanism under Section 15 of FEMA allows entities to acknowledge violations, pay fines, and rectify contraventions without prolonged legal processes. These actions were taken after the Directorate of Enforcement (ED) granted “No Objection” for the compounding orders, as per the RBI’s directives.
