The Reserve Bank of India (“RBI”), in exercise of powers conferred under Section 9 and Section 47(2)(e) of the Foreign Exchange Management Act, 1999, vide Notification No. FEMA10(R)(5)/2025-RB[1], dated January 14, 2025, issued the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) (Fifth Amendment) Regulations, 2025, which shall come into force immediately.
The amendment has introduced a key change to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015 (the “Principal Regulations”)
Under Regulation 5(C) of the Principal Regulations, a new sub-regulation 5(CA) has been introduced, which allows exporters, who are residents of India, to open, hold, and maintain a foreign currency account with a bank outside India. The account is meant for the realisation of the full export value and advance remittance received for the export of goods or services. The funds in this account may be used by the exporter to make payments for imports into India or to repatriate the funds into India.
However, the repatriation must occur within a period not exceeding the end of the next month from the date of receipt of the funds after adjusting for forward commitments, provided that the realisation and repatriation requirements, as specified in Regulation 9 of Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, are also met.
[1]https://website.rbi.org.in/web/rbi/-/notifications/foreign-exchange-management-foreign-currency-accounts-by-a-person-resident-in-india-fifth-amendment-regulations-2025