RBI/2025-26/88, A.P. (DIR Series) Circular No. 11, dated October 01, 2025, addresses All Authorised Dealer Category-I Banks regarding Merchanting Trade Transactions (MTT) and the review of the time period for the outlay of foreign exchange. The circular references A.P. (DIR Series) Circular No.20 dated January 23, 2020, which stated that MTT must be completed within nine months with no foreign exchange outlay beyond four months. This circular increases the time period for outlay of foreign exchange from four to six months to facilitate merchanting traders. Other directions from the previous circular remain unchanged. The instruction is applicable immediately and AD banks should notify their constituents and customers. The directions are issued under sections 10(4) and 11(1) of FEMA, 1999. Contact Foreign Exchange Department, Central Office, 5th Floor, Amar Building, Sir P.M.Road, Fort, Mumbai – 400 001, Telephone: (91-22) 22603000, Email Id - fedcotrade@rbi.org.in.
Key Entities Referenced
Foreign Exchange Management Act (FEMA), 1999: The Act under which the directions in the circular are issued.
A.P. (DIR Series) Circular No. 20 dated January 23, 2020: A previous circular related to Merchanting Trade Transactions that this circular modifies.
Merchanting Trade Transactions (MTT): The type of trade transactions that the circular addresses and modifies the time period for.
Reserve Bank of India: The regulator issuing the circular.
Authorised Dealer Category-I Banks: The target audience of the circular.
बेटी बचाओ
बेटी पढ़ाओ
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/2025-26/88
A.P. (DIR Series) Circular No. 11 October 01, 2025
All Authorised Dealer Category-I Banks
Madam / Sir,
Merchanting Trade Transactions (MTT) – Review of time period for outlay of
foreign exchange
Attention of Authorised Dealer Category – I banks (AD banks) is invited to Para 2 (vi) of
A.P. (DIR Series) Circular No.20 dated January 23, 2020 wherein it has been indicated
that ‘The entire MTT shall be completed within an overall period of nine months and there
shall not be any outlay of foreign exchange beyond four months. The commencement
date of merchanting trade shall be the date of shipment / export leg receipt or import leg
payment, whichever is first. The completion date shall be the date of shipment / export
leg receipt or import leg payment, whichever is the last’.
2. On a review and in order to facilitate merchanting traders to manage their MTT
efficiently, it has been decided to increase the time period for outlay of foreign exchange
from four to six months. All the other directions indicated in the Circular referred above
shall remain unchanged.
3. The above instruction is applicable with immediate effect. AD banks may bring the
contents of this circular to the notice of their constituents and customers concerned.
4. The directions contained in this circular have been issued under sections 10(4) and
11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are
without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(N. Senthil Kumar)
Chief General Manager
वर्देशी मुद्रा वर्भाग, केंद्रीय कायावलय, 5र्ी ींमींविल, अमर भर्न, सर पी.एम.रोड, फोर्व मुींबई - 400 001
Foreign Exchange Department, Central Office, 5th Floor, Amar Building, Sir P.M.Road, Fort, Mumbai – 400 001
Telephone: (91-22) 22603000, Email Id – fedcotrade@rbi.org.in
हहिंदी आसान है, इसका प्रयोग बढाइए
चेतार्नी : भारतीय ररिर्व बैंक द्वारा ई-मेल, डाक, एसएमएस या फोन-कॉल के िररए वकसी की भी व्यक्तिगत िानकारी िैसे बैंक के खाते का ब्यौरा, पासर्डव आवद नही ींमााँगी िाती है।
यह धन रखने या देने का प्रस्तार् भी नही ींकरता है। ऐसे प्रस्तार्ो ींका वकसी भी तरीके में िबाब मत दीविए
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like banks account details, passwords, etc.
It never keeps or offers funds to anyone. Please do not respond in any manner to such offers