The Reserve Bank has notified the Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026, effective 5 June 2026, recalibrating the approval architecture that underpins inbound and outbound mergers under FEMA.
The 2018 Regulations were anchored entirely to the National Company Law Tribunal, with every reference to the sanction of a cross border merger scheme tied to the NCLT. The amendment omits the definition of NCLT and substitutes it throughout with a newly inserted concept of Competent Authority, defined as any authority empowered under the Companies Act, 2013 or subordinate legislation framed thereunder to approve a scheme of merger or amalgamation.
The practical significance lies in the alignment with the fast track route under Section 233 of the Companies Act, where the Central Government, acting through the Regional Director, sanctions schemes without recourse to the Tribunal. By widening the sanctioning authority beyond the NCLT, the deemed RBI approval and the two year compliance timelines now attach equally to schemes cleared through these alternate routes.
For groups planning cross border restructuring like reverse flip or folding a wholly owned subsidiary with the Indian parent entity, the change opens a less cumbersome route, provided the substantive FEMA requirements continue to be met.
Source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13466&Mode=0
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