RBI Unveils New Foreign Exchange Management (Guarantees) Regulations, 2026

• RBI issued new Foreign Exchange Management (Guarantees) Regulations, 2026, effective January 6, 2026.
• Indian residents are now prohibited from non-resident guarantees unless explicitly permitted by FEMA or RBI.
• The definition of 'guarantee' expands to include counter-guarantees and portfolios of liabilities, with specific exemptions.
• Residents can act as surety or principal debtor if the underlying transaction is FEMA-compliant and meets borrowing-lending criteria.
• Mandatory quarterly reporting of guarantee activities to AD banks within 15 days, with AD banks reporting to RBI within 30 days; late fees apply.

Why It Matters: RBI's new regulations tighten foreign exchange guarantees, broadening definitions and mandating strict compliance and reporting.