Reserve Bank of India imposed a compounding fee of ₹18.76 lakh on One 97 Communications Limited in February 2026 for violations of the Foreign Exchange Management Act, 1999

•  The Reserve Bank of India (RBI) imposed a compounding fee of ₹18.76 lakh on One 97 Communications Limited (OCL) in February 2026 for violations of the Foreign Exchange Management Act, 1999 (FEMA).

•  One 97 Communications is the parent company of Paytm Payments Services Limited. The penalty relates to irregularities in foreign investment transactions involving one of its subsidiaries. This action reflects the RBI's continued focus on ensuring compliance with foreign exchange and investment regulations.

Background: FEMA and RBI's Regulatory Role

•  FEMA, enacted in 1999, governs foreign exchange transactions and cross-border investments in India. Its objective is to facilitate external trade and ensure the orderly development of the foreign exchange market.

•    The RBI is the primary authority responsible for enforcing the provisions of FEMA, overseeing foreign direct investment (FDI) and international capital flows.

•   A compounding mechanism exists under FEMA, allowing entities to voluntarily admit to violations and pay a prescribed fee. Compounding prevents further legal action in that particular case.