ED Clears Path for 'Ease of Doing Business' with FEMA Case Compounding

The Enforcement Directorate (ED) has approved a compounding order by the Reserve Bank of India (RBI) for Nearbuy India Private Limited in a FEMA violation case. The company avoided prosecution by paying a penalty of Rs 4.28 lakh. This move aligns with the Union government's ease of doing business policy.

In a significant step towards enhancing 'ease of doing business', the Enforcement Directorate (ED) has approved a compounding order from the Reserve Bank of India (RBI) in a FEMA violation case against Nearbuy India Private Limited. This decision allows the company to resolve the matter by paying a Rs 4.28 lakh penalty, rather than facing prosecution.

The compounding order, issued under Section 15 of the Foreign Exchange Management Act, 1999, is a regulatory mechanism that settles offences by allowing defaulters to pay fines instead of undergoing legal proceedings. The RBI's decision followed a 'No Objection' from the ED, marking a significant resolution in the case.

The ED filed a complaint against Nearbuy India in 2024, alleging FEMA violations exceeding Rs 100 crore due to delayed filings. After investigating, the ED issued a show cause notice earlier this year. The company applied for compounding these violations, leading to the RBI's order. This action supports the Union government's strategy to reduce litigation and promote business ease.

(With inputs from agencies.)