RBI Grade BNABARD ESISEBI
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Context:
“RBI MPC Unpacked: Key Theory Meets Today’s Macro Trends”Tap to play · from the C4S channel
In January 2026, the Reserve Bank of India (RBI) issued the Foreign Exchange Management (Guarantees) Regulations, 2026, creating a comprehensive regulatory framework for guarantees involving persons resident outside India.
The regulations are issued under the Foreign Exchange Management Act, 1999 (FEMA).
Who Must Comply?
- Authorised Dealer (AD) Category-I banks
- Banks must follow the new regulations while:
- Issuing
- Modifying
- Invoking guarantees involving non-residents
Key Provisions of the Regulations
1. Comprehensive Reporting Framework
- Mandatory reporting of all guarantees:
- Issued
- Modified
- Invoked
- Reporting to be done in a prescribed format
- Manner and format of submission to be notified separately by RBI
2. Supersession of Earlier Circulars
- Earlier A.P. (DIR Series) circulars listed in the annexure have been superseded
- Creates a single, consolidated regulatory framework
3. Discontinuation of Quarterly Reporting
- Quarterly reporting of guarantees for Trade Credit has been discontinued
- Effective from the quarter ending March 2026
4. Amendments to Existing Master Directions
Guarantee-related provisions amended in Master Directions covering:
- External Commercial Borrowings (ECB)
- Trade Credits
- Export and Import of Goods & Services
- FEMA Reporting requirements
5. Customer Awareness
- AD banks have been instructed to:
- Inform customers about the new regulations
- Ensure compliance with revised norms
