As part of the Reserve Bank of India’s updated framework under the Foreign Exchange Management (Guarantees) Regulations, 2026, dated January 06, 2026, new reporting obligations have been introduced for all guarantees involving cross‑border parties. These requirements are effective from Quarter ended March 2026
Who Must Report?
1. Surety / Guarantor (Resident in India)
If you as a resident entity are providing the guarantee.
Example: A resident corporate issuing a guarantee in favor of an overseas entity.
2. Principal Debtor / Applicant (Resident in India)
If you (Principal Debtor) have arranged a guarantee wherein the surety is a non-resident.
Example: A guarantee issued by an overseas parent or bank for credit facilities availed in India.
3. Creditor / Beneficiary (Resident in India)
If both the surety and principal debtor are non-residents, or if you have arranged the guarantee.
Example: Receipt of a guarantee from a foreign bank for obligations of an overseas entity.
Who Must Report?
1. Surety / Guarantor (Resident in India)
If you as a resident entity are providing the guarantee.
Example: A resident corporate issuing a guarantee in favor of an overseas entity.
2. Principal Debtor / Applicant (Resident in India)
If you (Principal Debtor) have arranged a guarantee wherein the surety is a non-resident.
Example: A guarantee issued by an overseas parent or bank for credit facilities availed in India.
3. Creditor / Beneficiary (Resident in India)
If both the surety and principal debtor are non-residents, or if you have arranged the guarantee.
Example: Receipt of a guarantee from a foreign bank for obligations of an overseas entity.
Late Submission Fee (LSF)
The LSF will be calculated as follows:
LSF = ₹7,500 + (0.025% × A × n)
Where:
- A = Amount involved in the delayed reporting (INR)
- n = Number of years of delay (rounded up to the nearest month, expressed up to two decimal places)
Disclaimer: This is just for information, for more details please discuss with your AD.
