The Reserve Bank of India (RBI) continues its regulatory push toward simplification, liberalization, and enhanced financial inclusion under the Foreign Exchange Management Act (FEMA), 1999 and related frameworks. In a series of key updates issued between August and October 2025, the RBI has announced reforms impacting trade, external borrowing, co-lending, and capital adequacy norms.
Highlights include the simplification of the Special Rupee Vostro Account (SRVA) process to promote INR-based trade settlements, expanded access for Standalone Primary Dealers (SPDs) to non-deliverable derivative contracts, and revised Merchanting Trade guidelines offering traders more flexibility in managing foreign exchange timelines. Additionally, updates to EDPMS and IDPMS systems aim to ease compliance burdens for small exporters and importers.
In a significant move, the draft framework for External Commercial Borrowings (ECBs) proposes a shift from prescriptive RBI controls to a market-driven regulatory regime, aligning borrowing costs and limits with financial strength and global standards. The RBI has also issued new Co-Lending Directions, 2025, broadening inter-institutional collaboration between banks and NBFCs, and updated Basel III regulations on capital instruments to strengthen financial resilience.
Together, these policy measures reflect the RBI’s ongoing commitment to simplifying procedures, enhancing market participation, and fostering a more flexible, transparent financial ecosystem under FEMA and allied regulations.
