RBI issues compounding order for Sai Rayalaseema Paper Mills over FEMA violations

NEW DELHI, June 18, 2026 :- The Reserve Bank of India has issued a compounding order under Section 15 of the Foreign Exchange Management Act, 1999, to Sai Rayalaseema Paper Mills Limited, effectively terminating all ongoing proceedings against the company for consolidated contraventions.

The decision follows a “No Objection” clearance issued by the Directorate of Enforcement after the company filed an application seeking resolution for specific regulatory deviations.

According to an official press release, the Directorate of Enforcement had previously initiated an investigation based on credible information regarding breaches under FEMA provisions.

Following the probe, a formal complaint was filed before the Adjudicating Authority under Section 16 of FEMA, outlining multiple regulatory contraventions including violations under Schedule I of FEMA 20/2000-RB and specified notifications from 2017 and 2019.The matter was resolved after Sai Rayalaseema Paper Mills Limited submitted a compounding application to the central bank.

Upon receiving reference from the Reserve Bank of India, the Directorate of Enforcement granted its clear approval for the settlement. Consequently, the central bank compounded the violations via an order carrying a one-time settlement payment of Rs 19,17,500, which successfully concludes the adjudication proceedings and protects the firm from further litigation concerning these specific infractions.