In a move aimed at strengthening regional trade and payment systems, the Reserve Bank of India ( RBI ) on Monday allowed Indian banks and their overseas branches to extend rupee-denominated loans to persons residing in Bhutan , Nepal , and Sri Lanka .
The RBI said the step was taken to facilitate cross-border trade transactions and is part of its ongoing efforts to ease external trade and payment mechanisms, PTI reported.
According to the central bank, amendments have been made to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 and the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015.
“AD (authorised dealer) banks in India and their overseas branches have been permitted to lend in Indian Rupees to persons resident in Bhutan, Nepal, and Sri Lanka, including banks in these jurisdictions, to facilitate cross-border trade transactions,” the RBI said in a statement.
The central bank also eased norms for Indian exporters holding foreign currency accounts abroad. Earlier, exporters were required to repatriate unutilised balances in such accounts by the end of the month following the date of realisation.
“It has now been decided that the period for repatriation shall be extended up to three months, in case of foreign currency accounts maintained with a bank in the IFSC in India,” the RBI clarified.
The announcement aligns with the policy statement made by the RBI on October 1 during the bi-monthly monetary policy review.
The RBI said the step was taken to facilitate cross-border trade transactions and is part of its ongoing efforts to ease external trade and payment mechanisms, PTI reported.
According to the central bank, amendments have been made to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 and the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015.
“AD (authorised dealer) banks in India and their overseas branches have been permitted to lend in Indian Rupees to persons resident in Bhutan, Nepal, and Sri Lanka, including banks in these jurisdictions, to facilitate cross-border trade transactions,” the RBI said in a statement.
The central bank also eased norms for Indian exporters holding foreign currency accounts abroad. Earlier, exporters were required to repatriate unutilised balances in such accounts by the end of the month following the date of realisation.
“It has now been decided that the period for repatriation shall be extended up to three months, in case of foreign currency accounts maintained with a bank in the IFSC in India,” the RBI clarified.
The announcement aligns with the policy statement made by the RBI on October 1 during the bi-monthly monetary policy review.
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