On 6 June 2026, the Reserve Bank of India (RBI) issued a notification [1] amending the rules governing cross-border mergers under the Foreign Exchange Management Act, 1999 (FEMA), as part of India’s ongoing efforts to simplify the regulatory framework and enhance ease of doing business.
Prior to this amendment, FEMA regulations recognized only the National Company
Law Tribunal (NCLT) for approving merger schemes and did not account for fast-track
mechanisms introduced under the Companies Act, 2013, which allowed approvals by
the Regional Director, thereby leading to uncertainty on RBI approval
requirement in cross-border mergers. This has now been addressed by replacing
“NCLT” with the broader term “Competent Authority,” aligning FEMA with the
Companies Act framework, removing ambiguity and enabling smoother
implementation of such mergers.
This alert summarizes the amendment and its implications, positioning the
reform as a step towards improving regulatory consistency, streamlining
processes, and facilitating more efficient cross-border business structuring
[1] Notification
No. FEMA 389(1)/2026-RB dated May 29, 2026
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