RBI Eases FEMA Rules for Rupee Loans and Export Proceeds
Why in the news
RBI amended FEMA regulations to ease cross-border trade and payments, deepen regional financial links and promote rupee use abroad.
The two changes
| Area | Rupee lending | Export proceeds |
|---|---|---|
| Rule | Borrowing and Lending Regulations, 2018, amended 2025 | Foreign Currency Accounts (Seventh Amendment) Regulations, 2025 |
| Change | AD banks and overseas branches can lend in rupees to persons or banks in Bhutan, Nepal, Sri Lanka | Exporters with FCA in IFSC banks can hold proceeds up to three months (earlier: next month) |
| Gains | Less USD reliance, lower cost and exchange risk, easier trade finance, especially Sri Lanka | Cash-flow and hedging flexibility, global practice, boost to GIFT City |
Key facts
- RBI also amended Master Directions on Export of Goods and Services and Deposits and Accounts.
Significance
- Supports rupee internationalisation and South Asian trade integration.
- Extends payment systems such as UPI and strengthens economic diplomacy.
Exam angle
- Countries: Bhutan, Nepal, Sri Lanka; hub: GIFT City.