Foreign exchange derivative restrictions tighten on INR contracts, limiting non-deliverable positions, rebooking, and related-party dealings.
Authorised Dealers are prohibited from offering non-deliverable derivative contracts involving INR to resident or non-resident users, while deliverable foreign exchange derivative contracts may continue only for hedging requirements and only where no offsetting non-deliverable positions are maintained. Rebooking of any cancelled foreign exchange derivative contract involving INR is barred, and no foreign exchange derivative contract involving INR may be undertaken with related parties. The instructions apply immediately until further review.

Overseas investment references now move to designated Reserve Bank Regional Offices through PRAVAAH portal routing for authorised dealer banks.
Submission of references relating to overseas investment received from persons resident in India through authorised dealer category I banks is shifted from central processing to seven designated Regional Offices with effect from 1 April 2026. Banks must route such references through the Reserve Bank's PRAVAAH portal in accordance with the relevant UIN prefix mapping to the specified Regional Office.

Guarantee reporting under FEMA requires specified returns, quarterly submission through CIMS, and unique transaction numbering.
Reporting obligations under the Foreign Exchange Management (Guarantees) Regulations, 2026 require use of specified RBI return files for guarantee issuance, modification and invocation. Authorised dealer banks must submit the returns through CIMS within thirty calendar days from the end of the relevant quarter and assign a unique Guarantee Transaction Number for each guarantee issuance. For late submission fee purposes, invocation returns are measured by the liability created on invocation, while issue and modification returns are treated as Nil.

External Commercial Borrowing reporting updated with revised late submission fee treatment and bank filing responsibilities under FEMA.
Revised reporting directions govern returns relating to External Commercial Borrowing under the Foreign Exchange Management Act, 1999. Form ECB 1 and Revised Form ECB 1 are treated as returns that do not capture flows, and delayed submissions are to be assessed accordingly. The designated bank must forward the complete return with certification to the Reserve Bank within seven calendar days, while any applicable late submission fee is payable by NEFT or RTGS after receipt of the Reserve Bank's acknowledgment e-mail. The bank must also monitor payment of the fee in delayed cases.

NOP-INR position limits for authorised dealers tightened for onshore deliverable market compliance.
Authorised Dealers must maintain their NOP-INR positions in the onshore deliverable market within US$ 100 million at the end of each business day, with compliance required at the earliest and no later than April 10, 2026. The measure is issued as an exchange rate management direction under the Reserve Bank's power to prescribe limits for open Rupee positions and is without prejudice to permissions or approvals under other applicable law.

Border-country foreign investment restrictions require government approval for covered investors, beneficial ownership changes, and prescribed reporting obligations.
Foreign direct investment from countries sharing a land border with India requires the Government route where the investor or beneficial owner falls within the prescribed restriction. A subsequent direct or indirect ownership transfer causing beneficial ownership to fall within that restriction requires prior Government approval. Beneficial ownership may arise through ownership above applicable thresholds, control of the investor entity, or ultimate effective control over the Indian investee entity. Other covered investments not requiring approval are subject to prescribed reporting, alongside sectoral caps, entry routes, and attendant conditions.

External Commercial Borrowing reporting formats updated; revised ECB 1 and ECB 2 now mandated and effective immediately.
The Reserve Bank has revised the External Commercial Borrowing reporting formats in the Master Direction by substituting Part V - Annex I and Part V - Annex II with revised Form ECB 1 and Form ECB 2, respectively. The new forms require detailed borrower and lender information, borrowing terms, end use, interest and fee particulars, receipts, utilisation, debt servicing, hedging and LRN closure details. Authorised Persons must notify customers, and the directions-issued under the Foreign Exchange Management Act-are effective immediately and subject to any other statutory permissions.

External Commercial Borrowing framework revised; authorised dealer banks must apply amended FEMA borrowing and lending regulations when facilitating transactions.
The amendment updates the External Commercial Borrowing framework and directs Authorised Dealer Category I banks to follow the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026 when facilitating FEMA-governed borrowing and lending transactions. It consolidates provisions by deleting specified paragraphs from two Master Directions and removing Part I of the ECB and Trade Credits FAQs, and requires banks to notify affected customers. The directions are issued under the Foreign Exchange Management Act and do not affect other statutory permissions or approvals.

Foreign investment in insurance permits full automatic-route participation, subject to regulatory verification, governance conditions, licensing and disclosure obligations.
Foreign direct investment in Indian insurance companies and insurance intermediaries is permitted up to 100 per cent under the Automatic Route, subject to insurance regulatory verification, licensing, applicable insurance law and foreign-investment rules. Insurance companies with foreign investment must maintain a resident Indian citizen in specified senior leadership roles. Foreign-majority-owned intermediaries must be limited companies, maintain prescribed resident Indian leadership, bring skills and disclose specified related-entity payments. Foreign investment in the Life Insurance Corporation of India remains capped at 20 per cent under the Automatic Route.

Voluntary Retention Route investments will count under General Route limits; FPIs may exit after minimum retention period.
Investments made through the Voluntary Retention Route in Central Government securities (including Treasury Bills), State Government Securities and corporate debt securities shall be reckoned under the investment limits for those securities under the General Route; FPIs that had longer-than-minimum retention periods may liquidate fully or partly and exit VRR after the minimum retention period; existing VRR investments will be transferred to the General Route limits on commencement.

Export and import rules updated: authorised dealers must follow FEMA, use PRAVAAH for references, and report doubtful transactions.
The Reserve Bank promulgated the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 to consolidate FEMA based rules for cross border trade, effective October 01, 2026. Authorised dealers must ensure transactions comply with FEMA and the Foreign Trade Policy, submit references via the PRAVAAH portal, and report doubtful transactions to the Directorate of Enforcement. Existing Master Directions and the listed circulars are superseded. The directions are issued under sections 10(4) and 11(1) of FEMA and do not affect other legal permissions required under other laws.

Foreign exchange guarantees now require reporting in Form GRN and amended bank compliance and reporting obligations.
The regulations require reporting of all guarantees - issued, modified or invoked - to authorised dealer banks in prescribed Form GRN, and mandate that authorised dealer banks compile and submit returns in the manner and format to be communicated by the Reserve Bank, while ensuring compliance with Department of Regulation guidelines.

Export and import of Indian currency to and from Nepal and Bhutan: small denominations unlimited; higher notes limited to Rs.25,000 while travelling.
Persons not being citizens of Pakistan or Bangladesh may carry Indian currency notes of denominations up to Rs.100 to or from Nepal and Bhutan without limit; notes of denominations above Rs.100 may be carried by an individual travelling to or from Nepal and Bhutan only up to a total limit of Rs.25,000; movement of Nepalese and Bhutanese currency to and from India is also permitted.

Liberalised Remittance Scheme now requires AD Category II banks and FFMCs to submit daily LRS returns via CIMS.
AD Category II banks, authorised entities and Full Fledged Money Changers must submit the LRS daily return via CIMS (including nil reports) and may discontinue submitting LRS transactions through AD Category I banks; CIMS access enables PAN wise checks of cumulative remittances before facilitating further LRS transactions.

KYC compliance for authorised persons is governed by entity specific RBI directions; NBFC KYC Directions apply to others.
Persons regulated by the Department of Regulation, Reserve Bank of India shall follow the respective Know Your Customer directions applicable to them; Authorised Persons not regulated by that Department shall be governed by the Reserve Bank of India (Non-Banking Financial Companies - Know Your Customer) Directions, 2025. Authorised Persons must ensure compliance by their agents, sub agents and franchisees. Related master directions are modified and these directions, issued under FEMA powers, apply with immediate effect.

Compounding payments under FEMA must be made via NEFT/RTGS to revised accounts and notified to the office within two hours.
The directions require compounding application fees and compounding amounts to be paid by NEFT/RTGS to revised bank accounts listed in Annexure I, which provides account numbers, IFSC codes and email contacts for central and regional offices. Payors must send a confirming email within two hours using the prescribed template with transaction details (including UTR, account and bank details, payment date, application reference where applicable and office to which payment was made), and may attach the payment email to the compounding application.

Special Rupee Vostro account investment permitted in Indian corporate bonds and commercial paper under prescribed guidelines.
AD banks may invest surplus balances in Special Rupee Vostro Accounts in non convertible debentures/bonds and commercial paper issued by Indian companies, in terms of the guidelines and limits prescribed in the referenced AP DIR circular, with immediate effect; the instruction is issued under sections 10(4) and 11(1) of FEMA and without prejudice to other statutory permissions.

Special Rupee Vostro Account balances may be invested in Indian corporate debt and commercial paper under General Route limits.
SRVA holders may invest rupee surplus balances in non-convertible debentures/bonds and commercial papers issued by Indian companies; such investments shall be reckoned under the corporate debt investment limit under the General Route. These investments are subject to General Route investment limits and stipulations applicable to FPI investments, except that the minimum residual maturity and issue wise limits do not apply under the SRVA route. SRVA holders and AD Category I banks bear primary responsibility for compliance; AD Category I banks must facilitate separate demat accounts and report transactions to depositories. The amendments have immediate effect.

EDPMS/IDPMS reconciliation: permit declaration-based closure of small-value export/import entries and accept consolidated quarterly declarations without penal charges.
AD banks may reconcile and close EDPMS and IDPMS entries for small-value export/import bills based on exporter or importer declarations that proceeds have been realised or payments made; value reductions may be accepted and declarations may be consolidated quarterly for bulk reconciliation. Banks must review handling charges to ensure they are commensurate and must not levy penal charges for regulatory delays; the changes take immediate effect and the master directions will be updated under the foreign exchange law.

Merchanting trade timeframe extended for foreign exchange outlay, easing management of merchanting transactions under FEMA.
The period for outlay of foreign exchange in Merchanting Trade Transactions has been increased to a six month window to facilitate efficient management; all other directions, including commencement and completion definitions based on shipment/export receipt and import payment, remain unchanged. The change is effective immediately for Authorised Dealer Category I banks and is issued under the Foreign Exchange Management Act without prejudice to other statutory permissions.