RBI Notifies Seventh Amendment to Foreign Currency Accounts Regulations for Residents in India

The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) (Seventh Amendment) Regulations, 2025, bringing clarity and flexibility for exporters regarding foreign currency accounts.

Key Highlights of the Amendment:

1. Effective Date:
   The regulations come into force from the date of publication in the Official Gazette.
2. Definition Update – IFSC:
   The term “International Financial Services Centre (IFSC)” is now formally included in the regulations, in line with the IFSC Authority Act, 2019.
3. Exporters Can Maintain Foreign Currency Accounts Abroad:
   Exporters resident in India can now open, hold, and maintain foreign currency accounts with banks outside India for:
   • Realisation of full export proceeds.
   • Receipt of advance remittances toward exports.
4. Usage and Repatriation of Funds:
   • Funds can be used to pay for imports into India.
   • Funds can also be repatriated to India:
     • Within 3 months for accounts maintained with banks in an IFSC.
     • By the end of the next month for accounts in all other jurisdictions.
   • This is subject to forward commitments and compliance with the FEMA (Export of Goods and Services) Regulations, 2015.
5. Clarification on “Abroad Accounts”:
   Accounts permitted to be opened outside India can also be opened in IFSCs, offering exporters additional flexibility in managing foreign currency inflows.

Why This Matters:

This amendment streamlines the repatriation timeline for export proceeds, particularly for exporters operating through IFSCs. It also aligns the regulations with international financial practices, making it easier for Indian exporters to manage foreign currency transactions efficiently.

Previous Amendments:

This is the seventh amendment to the principal regulations first notified in 2016, with updates in 2016, 2019, 2024, and earlier in 2025, reflecting RBI’s ongoing efforts to enhance ease of doing business for exporters.