Non-deliverable INR derivatives must be offered to non-residents solely for hedging, while dealers maintain a foreign exchange risk reserve.
INR non-deliverable derivative contracts offered by Authorised Dealers to non-resident users are restricted to hedging purposes. Authorised Dealers must maintain a Foreign Exchange Risk Reserve for INR foreign exchange derivative contracts undertaken to hedge the currency risk of their own assets and liabilities where foreign currency is purchased against INR. The reserve must equal 20 per cent of the INR equivalent of each contract's notional amount and be maintained as daily cash with the Reserve Bank until contract termination. The requirements apply prospectively.

Foreign Exchange Risk Reserve mandates daily cash backing for specified INR hedging derivatives and prohibits transaction splitting to avoid coverage.
Authorised Dealers must maintain a Foreign Exchange Risk Reserve for covered INR derivative contracts used to hedge current account transactions involving purchase of foreign currency against INR. The reserve, calculated at 20 per cent of the INR-equivalent notional amount, must be held as daily cash in India with the Reserve Bank until termination. Splitting transactions to avoid coverage is a violation, and daily reporting through CIMS is required.

INR derivative risk management now bars rebooking after cancellation, lowers unverified position thresholds, and mandates exposure undertakings.
Authorised Dealers may not permit rebooking of cancelled INR foreign exchange derivative contracts with any dealer, although rollover at maturity remains permissible. The threshold for specified derivative positions without establishing underlying exposure is USD 5 million equivalent outstanding at any time. For contracts hedging contracted exposures, Authorised Dealers must obtain and retain undertakings addressing hedging with other dealers, verify underlying exposure, and retain necessary documentation for at least two years.

Non-resident deposit reporting now requires monthly NRD-CSR submission through designated CIMS channels using rationalised bank-wise consolidated formats.
Banks maintaining non-resident deposit accounts are to file the monthly NRD-CSR return, code R012, through the CIMS Sankalan portal using rationalised bank-wise consolidated reporting formats. Filing may occur through system-to-system integration, XML file upload, or a screen-based web form, with screen-based submission limited to 2,000 records. RBI manages reporting access and channels, while bank admin-users manage user access. The nodal office must submit the return on or before the tenth day of the following month.

Online Form A2 remittances permit internal guidelines approved by boards or delegated committees, while existing safeguards remain unchanged.
Online or physical submission of Form A2 for outward foreign-exchange remittances must be regulated through internal guidelines approved by an Authorised Dealer's Board or by a Board Committee or Management Committee acting under delegated Board powers. Existing requirements governing remittances based on Form A2 and related documents remain unchanged. The directions operate under the Foreign Exchange Management Act, 1999 and remain subject to permissions or approvals required under other applicable laws.

Government-supported export credit requires eligible Indian supply, export declarations, and commission remittances only after full export-value realisation.
Exim Bank's Government of India-supported Line of Credit finances eligible Indian goods and services for developmental projects in Maldives, subject to Foreign Trade Policy eligibility and approval of eligible contracts. At least 75% of the applicable contract price must comprise goods, works and services supplied from India, while up to 25% may be procured outside India. Exports must be declared in the Export Declaration Form or Shipping Bill. Agency commission is not payable, although foreign-currency remittances may be permitted after full realisation of eligible export value and compliance with applicable requirements.

FEMA regulatory rationalisation withdraws obsolete directions on external commercial borrowings, non-resident bond investments and money transfer sub-agents.
FEMA regulatory rationalisation entails withdrawal of circulars that have ceased to operate because of subsequent amendments, redundancy, overlap, or supersession by later directions. The withdrawn circulars concern External Commercial Borrowings, overseas rupee-denominated bonds, non-resident investments in tax-free non-convertible bonds, and the Money Transfer Service Scheme. Authorised persons must bring these changes to the attention of their concerned constituents, without affecting permissions or approvals required under other laws.

Non-resident bank Rupee accounts: annual branch-list and temporary-overdraft reporting obligations are discontinued for authorised dealer banks.
Reporting requirements for Authorised Dealer Category-I banks concerning accounts of non-resident banks are dispensed with immediate effect. The discontinued obligations include annual submission of updated lists of offices and branches maintaining Rupee accounts of non-resident banks and reporting of temporary overdrawals by overseas branches or correspondents exceeding permissible limits where unadjusted beyond five days. The directions operate without affecting permissions or approvals required under other applicable law.

Special Rupee Vostro Accounts enable Indian-rupee settlement of cross-border trade and permissible FEMA transactions through authorised dealer banks.
Special Rupee Vostro Accounts provide an additional Indian-rupee arrangement for settling cross-border export and import transactions and permissible FEMA current-account and capital-account transactions. Authorised Dealer Category-I banks may open SRVAs for overseas branches or banks resident outside India and may open dedicated additional current accounts for exporters or importers. SRVAs may receive inward remittances, transfers from repatriable rupee accounts and proceeds of permissible transactions. Documentation and reporting remain governed by extant FEMA requirements, while debt investments from SRVA balances are subject to applicable non-resident investment directions.

FEMA regulatory rationalisation through withdrawal of obsolete circulars issued after review of earlier directions.
Rationalisation of the FEMA regulatory framework through review of circulars issued since June 1, 2000, and withdrawal of those listed in the Annex that have ceased to operate because of subsequent regulatory amendments, redundancy, overlap or supersession by later directions. Authorised Persons are advised to bring the circular to the notice of their constituents. The directions are issued under Section 10(4) and Section 11(1) of FEMA, 1999, without prejudice to permissions or approvals required under other laws.

Reporting requirements under FEMA rationalised through revised return formats, discontinued forms, and updated compliance obligations.
Reporting requirements under FEMA, 1999 are rationalised by prescribing revised return formats and discontinuing several existing forms and statements. The revised FLM-8 format now captures write-off of foreign currency notes, while prior approval for write-off exceeding USD 2000 is discontinued and entities reporting through FETERS are exempted from FLM-8. Authorised Persons with franchisee arrangements and Indian Agents under MTSS must submit quarterly lists within 15 days from quarter end.

Open position computation for banks excludes hedged FCNR(B) and foreign borrowing exposures under revised FEMA directions.
Authorised Dealer Category-I banks must exclude positions arising from hedged transactions relating to FCNR(B) deposits, external commercial borrowings and overseas foreign currency borrowings when computing net overnight open position in Indian rupees. The change partially amends the earlier direction on NOP-INR position and must be applied consistently with the circular on open positions and the Master Direction on Risk Management and Inter-Bank Dealings. The directions are issued under FEMA, 1999 and are without prejudice to other legal permissions or approvals.

Daily reporting of FCNR(B) deposits, ECBs and OFCBs under the swap facility becomes mandatory for authorised dealer banks.
Authorised Dealer Category-I banks must submit daily reports on FCNR (B) deposits, External Commercial Borrowings and Overseas Foreign Currency Borrowings mobilized under the Reserve Bank's swap facility directions by 6 p.m. every day in the prescribed annexed formats. NIL statements are required when there are no transactions, except on Saturdays and holidays. Data from June 8, 2026 up to issuance must be filed with the first report due on June 22, 2026.

Foreign portfolio investment liberalisation expands equity investment access for resident outside India investors through repatriable INR accounts and aligned compliance.
Foreign portfolio investment under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 is liberalised to permit investment in equity instruments of a listed Indian company on a recognised stock exchange in India by all individual persons resident outside India, with enhanced investment limits. Authorised Dealer Category-I banks may open a repatriable INR account for such investors, and reporting and monitoring are to follow the same manner as NRI and OCI investments.

Foreign exchange swap positions: banks may exclude eligible swap exposures while meeting NOP-INR compliance requirements.
Authorised Dealer Category-I banks may exclude swap positions arising from FCNR (B) deposits, external commercial borrowings and overseas foreign currency borrowings raised under the specified swap-facility circulars, while complying with the applicable NOP-INR requirements under the earlier circular. The direction forms part of the foreign exchange regulatory framework for such swap transactions and is subject to any permissions or approvals required under other laws.

Foreign exchange reporting shifts to CIMS portal as banks must file monthly statements and NIL reports electronically.
Authorised Dealer Category-I banks must upload specified foreign exchange reports on the Centralized Information Management System (CIMS) portal instead of submitting them manually. The consolidated monthly statement of branches, liaison offices and project offices opened and closed is to be filed on CIMS with return code R343 from the month ending June 2026, including a NIL report where no data is available. The monthly statement on NRO account remittances is also shifted to CIMS with return code R006, and the reporting framework under FEMA is being updated.

Foreign Portfolio Investor access to government securities broadened through eased limits and expanded fully accessible route coverage.
Foreign Portfolio Investors are given greater flexibility for Government securities investments under the General Route by withdrawing the short-term investment limit, security-wise limit and concentration limit. The framework merges the "general" and "long-term" sub-categories into single limits for Central Government Securities and State Government Securities, and expands the Fully Accessible Route by adding new issuances of specified tenors of Government Securities and Sovereign Green Bonds, together with identified existing securities. Related Master Direction provisions are amended accordingly, with revised monitoring by the Clearing Corporation of India Ltd. and immediate effect.

Outward remittance compliance framework tightens bank responsibility, disclosure duties, data protection and settlement controls for online third-party arrangements.
An operating framework is prescribed for outward remittance services for non-trade current account transactions through third-party entities in online mode, with Authorised Dealer banks remaining solely responsible for FEMA and KYC compliance. The earlier approval-based arrangement for non-bank tie-ups is removed, and banks must follow detailed transparency, invoicing, customer disclosure, grievance redressal, data protection, cybersecurity, settlement, fund-safeguarding, and due-diligence requirements. Agreements with third parties must preserve the bank's full regulatory responsibility, and similar requirements apply to doorstep delivery of forex cards or foreign currency notes.

Authorised persons framework under foreign exchange law is rationalised to improve service delivery and ease compliance requirements.
The Reserve Bank has issued the Foreign Exchange Management (Authorised Persons) Regulations, 2026 to rationalise the framework for authorisation under the Foreign Exchange Management Act, 1999, improve delivery of foreign exchange services, and ease compliance requirements. All authorised persons must comply with the regulations as applicable to them. The Master Directions on money changing activities and other remittance facilities are being amended, and earlier A.P. (DIR Series) circulars listed in the annex are superseded.

Foreign exchange derivative reporting expands to INR-linked related party trades, with phased coverage, exclusions, and two-day reporting limits.
Authorised Dealer Category-I banks must report INR-linked OTC foreign exchange derivative contracts undertaken globally by their related parties to the Trade Repository of Clearing Corporation of India Ltd., subject to exclusions for back-to-back transactions, certain trades with other AD Category-I banks in India, and contracts below USD 1 million or equivalent. The bank must progressively achieve specified reporting coverage for related parties and report all INR-linked derivative contracts of the parent from July 1, 2027. Reporting must include relevant transaction details and be made preferably on the transaction date, but within two working days.