ARTICLE
10 January 2025

Cross Border Guarantees

J
JSA

Contributor

JSA is a leading national law firm in India with over 600 professionals operating out of 7 offices located in: Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai and New Delhi. Our practice is organised along service lines and sector specialisation that provides legal services to top Indian corporates, Fortune 500 companies, multinational banks and financial institutions, governmental and statutory authorities and multilateral and bilateral institutions.
The Reserve Bank of India ("RBI") has identified instances where guarantees have been issued by persons residing outside India in favour of persons residing in India...
India Finance and Banking

The Reserve Bank of India ("RBI") has identified instances where guarantees have been issued by persons residing outside India in favour of persons residing in India, which are not permitted under the Foreign Exchange Management Act, 1999 ("FEMA") and its related regulations. Consequently, RBI, vide circular dated October 4, 2024, has issued directions to Authorised Dealer Category-I banks to ensure that guarantee contracts advised by them to, or on behalf of, their resident constituents are in accordance with FEMA and the extant regulations.

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