Tata Motors Limited (NSE: TATAMOTORS, BSE: 500570) has paid a compounding fee of ₹2.11 crore to the Reserve Bank of India (RBI) for contravening foreign exchange regulations. The penalty, levied under the Foreign Exchange Management Act (FEMA), 1999, follows the company’s ODI-FDI structure violation involving a step-down subsidiary in India through a foreign entity.
Details of the Contravention
The RBI’s Foreign Exchange Department identified the violation under Regulation 5(1) of the Foreign Exchange Management (Transfer and Issue of any Foreign Security) Regulations, 2004. Tata Motors had established an Overseas Direct Investment (ODI) structure to hold a step-down subsidiary in India, which breached FEMA guidelines.
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On June 17, 2024, the company submitted a compounding application, which resulted in the Reserve Bank of India’s order dated April 25, 2025, that was received by Tata Motors on May 19, 2025.
Payment and Compliance
Tata Motors paid the fine on May 19, 2025, as instructed. The company emphasized no material financial or operational impact from the order. In its regulatory filing, Tata Motors stated: “The compounding fee has been paid in compliance with RBI’s directives. This does not affect our business operations or financial health.”
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Published on: May 19, 2025 / M Vishnu
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यः करोत्यः संकल्पः संकल्पः संकल्पः।
The one who is unattached to the external world and who is free from desires is truly a yogi.
