Reserve Bank of India, Foreign Exchange Department Notification No. FEMA 3(R)(4)/2025-RB, dated October 06, 2025, amends the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (Notification No. FEMA.3(R)/2018-RB dated December 17, 2018).
These regulations, called the Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2025, come into force from the date of notification in the official gazette.
In regulation 7 sub-regulation A, after clause (iii), clause (iv) is inserted: "An AD bank may lend in Indian Rupees to a person resident outside India being a resident in Bhutan, Nepal or Sri Lanka, including a bank in these jurisdictions, for cross border trade transactions."
Contact: (Dr. Aditya Gaiha), Chief General Manager-in-Charge.
The Principal Regulations were published in the Official Gazette vide G.S.R.No.1213(E) dated December 17, 2018, and subsequently amended vide Notification G.S.R No.163(E) dated 26.02.2019, Notification No. FEMA. 3(R)2/2021-RB 24.05.2021, and Notification No. FEMA.3(R)(3)/2022-RB dated 28.07.2022.
Key Entities Referenced
Foreign Exchange Management Act, 1999: The primary legislation empowering the regulations being amended.
Foreign Exchange Management (Borrowing and Lending) Regulations, 2018: The principal regulations being amended by this notification.
Reserve Bank of India: The regulator issuing the amendment regulations.
Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2025: Regulations amending the principal regulations.
Bhutan, Nepal, Sri Lanka: Jurisdictions where AD banks can lend in Indian Rupees to persons resident for cross border trade.
RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI - 400 001
Notification No. FEMA 3(R)(4)/2025-RB October 06, 2025
Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2025
In exercise of the powers conferred by sub-section (2) of Section 6 and Section 47 of the Foreign Exchange
Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments to the
Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (Notification No. FEMA.3(R)/2018-
RB dated December 17, 2018) (hereinafter referred to as 'the Principal Regulations'), namely:
1. Short Title & Commencement.- (1) These Regulations may be called the Foreign Exchange Management
(Borrowing and Lending) (Amendment) Regulations, 2025.
(2) They shall come into force from the date of notification in the official gazette.
2. In the principal regulations, in regulation 7 sub-regulation A, after clause (iii), the following clause (iv) shall be
inserted, namely:-
“An AD bank may lend in Indian Rupees to a person resident outside India being a resident in Bhutan, Nepal or
Sri Lanka, including a bank in these jurisdictions, for cross border trade transactions.”
(Dr. Aditya Gaiha)
Chief General Manager-in-Charge
Footnote:The Principal Regulations were published in the Official Gazette vide G.S.R.No.1213(E) dated
December 17, 2018, in Part II, Section 3, sub-Section (i) and subsequently amended vide the following, namely;
Notification G.S.R No.163(E) dated 26.02.2019
Notification No. FEMA. 3(R)2/2021-RB 24.05.2021
Notification No. FEMA.3(R)(3)/2022-RB dated 28.07.2022