RBI Cleans Up FEMA Framework: Withdrawal of Defunct Circulars via A.P. (DIR Series) Circular No. 18

Overview

As part of its sustained regulatory housekeeping efforts, the Reserve Bank of India has formally withdrawn a set of circulars that had become redundant within the framework of the Foreign Exchange Management Act, 1999. This action was formalised through A.P. (DIR Series) Circular No. 18 dated June 24, 2026, and marks a significant step toward decluttering the FEMA regulatory landscape for Authorised Persons and their constituents alike.

Background: Why This Review Was Initiated

The RBI has been engaged in a long-standing exercise to rationalise its regulatory directions issued under the Foreign Exchange Management Act, 1999 (FEMA). Over the years, a large volume of circulars has accumulated since June 1, 2000 — many of which have either been superseded by updated directives, rendered redundant through legislative amendments, or have simply lost operational relevance due to overlapping instructions.

To address this regulatory clutter, the RBI undertook a comprehensive review of all such circulars and identified those that no longer serve any active regulatory purpose. The outcome of this exercise has been formally communicated through the present circular.

Key Objective: Simplify FEMA compliance by removing inoperative instructions from the regulatory ecosystem, thereby reducing confusion and compliance burden for Authorised Persons and their clients.

What the Circular Says

Scope of the Review

The RBI's review covered all circulars issued under FEMA since June 1, 2000. The circulars that were found to have ceased operation — due to any of the following reasons — have been earmarked for withdrawal: