Overview
- Authorised dealer banks in India and their overseas branches can now lend in Indian rupees to residents and banks in Bhutan, Nepal and Sri Lanka.
- The central bank framed the move as facilitating cross-border trade transactions under amendments to FEMA borrowing and lending rules.
- Unutilised balances in foreign-currency accounts maintained with banks in India’s IFSC may now be repatriated within up to three months.
- RBI highlighted that this update builds on its January 2025 permission allowing exporters to hold foreign-currency accounts abroad for export proceeds.
- The measures were communicated with the October 1 monetary policy, and coverage notes expectations of lower transaction costs and smoother settlements for regional traders.