RBI Updates FEMA Rules To Simplify Cross-Border Merger Approvals

New Delhi, Jun 8 (KNN) The Reserve Bank of India (RBI) has amended the Foreign Exchange Management (Cross Border Merger) Regulations, 2018, to broaden the approval framework for cross-border mergers and align it with evolving corporate restructuring provisions under the Companies Act, 2013.

RBI Updates Cross-Border Merger Regulations

Through the Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026, the RBI has replaced references to the National Company Law Tribunal (NCLT) with the broader term ‘Competent Authority’ across key provisions governing cross-border merger transactions.

Under the revised framework, ‘Competent Authority’ has been defined as any authority empowered under the Companies Act, 2013, or rules and subordinate legislation framed thereunder, to approve a scheme of merger or amalgamation.

Broader Approval Framework Introduced

As part of the changes, the earlier NCLT-specific definition contained in the principal regulations has been omitted.

The amendment applies to Regulations 4, 5, 7 and 9 of the Cross Border Merger Regulations, where references to the NCLT have now been substituted with ‘Competent Authority’.

Changes Aim To Align FEMA With Corporate Law

The RBI said the changes are intended to align Foreign Exchange Management Act (FEMA) regulations with the broader corporate restructuring ecosystem.

It also ensures that approvals granted by any legally authorised body under the Companies Act are recognised for foreign exchange regulatory purposes.

Move Expected To Ease Cross-Border Transactions

The revised framework is expected to enhance regulatory flexibility and facilitate smoother implementation of cross-border merger and amalgamation transactions involving Indian and overseas entities.

Industry observers note that the move reflects the evolving corporate legal framework and could help simplify transaction approvals by accommodating future changes in the institutional architecture governing mergers and restructurings.

The amendment has been issued under powers conferred on the RBI under Section 47 of the Foreign Exchange Management Act (FEMA), 1999.

(KNN Bureau)