Reserve Bank of India (RBI) Issues Foreign Exchange Management (Guarantees) Regulations 2026

Key facts

• The Reserve Bank of India (RBI) has released the Foreign Exchange Management (Guarantees) Regulations, 2026, replacing the previous framework from 2000.
• The new principle-based regime expands the automatic route for cross-border guarantees, allowing transactions without prior approval if they meet FEMA borrowing and lending rules.
• Mandatory reporting of all guarantees must be submitted to authorized dealer banks on a quarterly basis within 15 days of the quarter end.
• The RBI has introduced a Late Submission Fee (LSF) for delayed reporting, calculated as ₹7,500 + 0.025% × amount involved × number of years of delay.
• A new reporting format, Form GRN, has been introduced to capture granular data including guarantee commissions, invocation details, and timelines for extinguishing liabilities.
• The regulations do not apply to guarantees issued under the Overseas Investment Regulations, 2022, or irrevocable payment commitments issued by custodian banks for Foreign Portfolio Investors (FPIs).