The Reserve Bank of India (RBI) has unveiled a series of regulatory measures aimed at facilitating smoother cross-border trade and enhancing financial cooperation with neighbouring countries, including Bhutan, Nepal, and Sri Lanka.
Under the new framework, Indian banks and their overseas branches will be allowed to extend Rupee-denominated loans to residents and banks in these countries for trade-related transactions. This move is expected to streamline trade settlements and strengthen regional financial integration across South Asia.
In addition, the RBI has announced that foreign currency accounts maintained in International Financial Services Centres (IFSCs) can now be repatriated within three months, compared to the earlier shorter window. This extension is aimed at providing greater operational flexibility to Indian banks and businesses engaged in international trade and finance.
The central bank stated that these initiatives are designed to deepen India’s trade and banking linkages with its immediate neighbourhood while promoting the use of the Indian Rupee in cross-border settlements. The changes are also aligned with India’s long-term objective of supporting trade diversification and facilitating easier access to credit for regional trading partners.
By easing trade financing norms and extending the repatriation period, the RBI aims to create a more robust ecosystem for cross-border commerce and financial inclusion across the subcontinent.
The updated guidelines are expected to come into effect immediately, with further operational details to be issued to banks and authorised dealers in due course.
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