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Key Points

The Reserve Bank of India has introduced significant reforms to simplify cross-border transactions. Banks can now provide rupee loans to support trade with neighboring countries like Bhutan, Nepal, and Sri Lanka. Indian exporters also get more flexibility with extended timelines for repatriating export earnings. These changes are part of RBI's ongoing efforts to streamline international trade and payment processes.

Key Points: RBI Eases Rules for Cross-Border Trade Export Payments

  • AD banks can now lend in rupees to individuals and institutions in Bhutan, Nepal, Sri Lanka
  • Exporters get extended three-month period for repatriating unutilised foreign currency balances
  • Changes apply specifically to foreign currency accounts maintained with IFSC banks in India
  • RBI amended Foreign Exchange Management regulations from 2018 and 2015 to implement these reforms
2 min read

RBI eases rules to facilitate cross-border trade and export payments

RBI simplifies forex regulations allowing rupee lending to Bhutan, Nepal, Sri Lanka and extends export proceeds repatriation period to boost international trade.

"The instructions contained in the Master Direction - Export of Goods and Services and Master Direction - Deposits and Accounts to effect these changes have also been amended accordingly - RBI"

New Delhi, October 13

Reserve Bank of India (RBI) has made key amendments to the Foreign Exchange Management regulations to simplify and support external trade and payments.

An RBI release said that Authorised Dealer (AD) banks in India and their overseas branches can now lend in Indian Rupees to individuals and institutions in Bhutan, Nepal, and Sri Lanka, including banks in these jurisdictions, to facilitate cross-border trade transactions.

In January 2025, the Reserve Bank permitted Indian exporters to open foreign currency accounts with a bank outside India for the realisation of export proceeds. Unutilised balances in these accounts are required to be repatriated by the end of the month next to the date of realisation. It has now been decided that the period for repatriation shall be extended upto three months, in case of foreign currency accounts maintained with a bank in the IFSC in India .

"The instructions contained in the Master Direction - Export of Goods and Services and Master Direction - Deposits and Accounts to effect these changes have also been amended accordingly," the RBI release said.

RBI had issued a statement on Developmental and Regulatory Policies on October 1 this year.

The move is part of continuous efforts towards 'facilitating external trade and payments' the Reserve Bank has made amendments to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 and Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2015.

- ANI

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Reader Comments

R
Rohit P
Promoting INR lending to neighboring countries is strategic thinking. This will strengthen our currency's position in the region and reduce dollar dependency. Good step by RBI!
A
Arjun K
While I appreciate the intent, I hope RBI ensures proper monitoring of these cross-border transactions. We've seen how such relaxations can sometimes lead to misuse. Better safeguards needed.
S
Sarah B
The focus on Bhutan, Nepal, and Sri Lanka makes sense given our historical trade ties. This could boost regional economic cooperation and help Indian businesses expand in these markets.
V
Vikram M
Small exporters will benefit the most from these changes. The reduced compliance burden and extended timelines are much needed relief in current global economic scenario.
M
Michael C
Interesting to see India pushing for rupee internationalization through these measures. The IFSC focus shows we're serious about making GIFT City a global financial hub. Forward-looking policy!

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