Source: TOI
Context:
On October 1, 2025, the Reserve Bank of India (RBI) allowed Indian banks and their overseas branches to lend in Indian Rupees (INR) to residents of Bhutan, Nepal, and Sri Lanka. These amendments are part of RBI’s efforts to ease external trade and payments, under the Foreign Exchange Management Act (FEMA).
Purpose: To facilitate cross-border trade transactions and promote the international use of the Indian Rupee.
Other measures by RBI:
- Extended repatriation period:
- Foreign currency accounts in IFSCs (International Financial Services Centres) in India now have up to 3 months for repatriation.
- Encourages exporters to open accounts in IFSC units.
- Earlier permission (Jan 2025):
- Exporters could open foreign currency accounts outside India to realise export proceeds.
- Unutilised balances must be repatriated by next month-end.
