Key Points:
RBI closed FEMA proceedings against Apollo Hospitals and five directors through a compounding order issued on June 17, 2026.
Apollo Hospitals paid ₹17.76 crore, while each director paid ₹18 lakh to settle the case.
The alleged FEMA contraventions involved transactions worth over ₹2,424 crore.
Violations included prohibited FDI, FCCB issuance, breach of FII-PIS limits, and exceeding foreign shareholding caps.
The settlement followed an ED no-objection certificate and ends further adjudication and litigation in the case.
New Delhi, June 22: The Reserve Bank of India (RBI) has closed Foreign Exchange Management Act (FEMA) proceedings against Apollo Hospitals Enterprise Limited and five of its directors and officers after issuing a compounding order that resulted in a settlement payment of ₹17.76 crore by the company and ₹18 lakh each by the concerned executives. Compounding under FEMA allows eligible contraventions to be settled by paying a prescribed amount, thereby avoiding prolonged adjudication and litigation.
According to a press release issued by the Directorate of Enforcement (ED) on June 17, 2026, the RBI passed the compounding order under Section 15 of FEMA, 1999, after receiving a "No Objection" from the enforcement agency.
The five directors and officers named in the case are Preetha Reddy, Suneetha Reddy, S.K. Venkatraman, Akhileswaran Krishnan, and S.M. Krishnan.
The ED said it initiated an investigation after receiving credible information regarding possible violations of FEMA provisions by Apollo Hospitals Enterprise Limited. Following the investigation, the agency filed a complaint under Section 16 of FEMA before the Adjudicating Authority.
Subsequently, Apollo Hospitals approached the RBI seeking compounding of the alleged contraventions under Section 15 of FEMA. After reviewing the matter, the RBI sought the ED's views on the proposal. The ED issued a no-objection certificate, allowing the central bank to proceed with the compounding process.
The press release noted that the action was in line with the provisions of FEMA and reflected the government's broader efforts to promote ease of doing business while reducing prolonged litigation in eligible cases.
According to the ED press release, the investigation identified four separate FEMA contraventions involving foreign investments and foreign exchange transactions whose cumulative value exceeded ₹2,424 crore.
The first contravention involved receiving foreign direct investment (FDI) in retail trading, a sector that was prohibited for FDI during the relevant period, along with subsequent receipt of foreign investment without obtaining the required government approval.
The amount involved in this contravention was ₹859.87 crore.
The second violation related to the issuance of Foreign Currency Convertible Bonds (FCCBs), debt instruments issued in foreign currency that can later be converted into equity shares, which the ED said contravened applicable FEMA regulations governing foreign securities and foreign investments.
The amount involved in this transaction was ₹70.02 crore.
The third contravention concerned foreign investment received through the Foreign Institutional Investor-Portfolio Investment Scheme (FII-PIS) route, a mechanism that allows registered foreign institutional investors to invest in Indian stock markets subject to prescribed limits. The ED said aggregate foreign investment exceeded the permitted 24 percent paid-up capital limit.
The amount associated with this violation was ₹623.87 crore.
The fourth violation involved breaching the overall foreign shareholding ceiling of 51 percent prescribed for multi-brand retail trading under the applicable FDI framework.
The amount involved in this contravention was ₹870.66 crore.
As part of the compounding order, Apollo Hospitals Enterprise Limited paid a one-time settlement amount of ₹17,76,80,121. Additionally, each of the five directors and officers named in the proceedings paid ₹18 lakh.
The ED confirmed that the RBI's order resulted in the termination of adjudication proceedings against the company concerning the compounded FEMA violations.
The ED stated that the RBI's order resulted in the termination of adjudication proceedings against the company concerning the compounded FEMA violations.
Reference:
1. Directorate of Enforcement. “RBI Issued Compounding Order for FEMA Violations in Case of M/s. Apollo Hospitals Enterprises Limited & Its Five Concerned Directors/Officers.” Press Release, June 17, 2026. Accessed June 22, 2026. https://enforcementdirectorate.gov.in/media/press-release-documents/8c3cd563-485c-4e0a-be9b-7493c93c1ae9_Apollo%20Press%20Release-2.pdf
2. Reserve Bank of India. FAQs on Compounding of Contraventions under FEMA, 1999. Accessed June 22, 2026. https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=835
(Rh/ARC/MSM)