On 6-10-2025, the Reserve Bank of India (‘RBI’) notified the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Seventh Amendment) Regulations, 2025.
Key takeaways:
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This amendment introduces key changes to the principal regulations Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015.
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A new definition for International Financial Services Centre (‘IFSC’) is included, aligning it with the meaning provided under the IFSC Authority Act, 2019. This inclusion formally recognizes IFSCs within the framework of foreign currency account regulations.
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A major revision is made to Regulation 5(CA), which now permits a person resident in India, specifically an exporter, to open, hold, and maintain a ‘foreign currency account’ with a bank outside India, including those located in an IFSC.
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These accounts can be used for receiving full export value and advance remittances related to the export of goods or services.
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The funds in such accounts can be utilized for import payments or can be repatriated to India within specified timelines, within three months for accounts held in IFSCs and by the next month for accounts in other jurisdictions, after adjusting for forward commitments.
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These provisions are subject to compliance with the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
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Additionally, the amendment clarifies that foreign currency accounts permitted to be opened “outside India/abroad” include those in IFSCs.
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This update strengthens the role of IFSCs as legitimate offshore banking hubs and enhances operational flexibility for Indian exporters in managing foreign exchange transactions.