The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Seventh Amendment) Regulations, 2025, introducing key changes aimed at facilitating exporters and aligning the regulatory framework with the growing role of International Financial Services Centres (IFSCs).

Through the amendment, the RBI has formally incorporated the definition of “International Financial Services Centre” (IFSC) into the principal regulations by referencing the International Financial Services Centres Authority Act, 2019.

A significant change has been made to Regulation 5 by substituting sub-regulation (CA). Under the revised provision, a person resident in India, being an exporter, is permitted to open, hold and maintain a foreign currency account with a bank outside India for the realisation of full export value and advance remittances received towards export of goods or services. The funds lying in such accounts may be utilised for making payments towards imports into India or for meeting forward commitments, subject to eventual repatriation into India.

Importantly, the amendment provides differentiated timelines for utilisation and repatriation of funds. Where the foreign currency account is maintained with a bank in an IFSC, exporters are allowed up to three months from the date of receipt of funds. For accounts maintained in all other jurisdictions, the funds must be repatriated by the end of the next month. These relaxations remain subject to compliance with realisation and repatriation requirements under the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, as amended from time to time.

Further, an explanation has been inserted clarifying that for the purposes of Regulation 5, foreign currency accounts permitted to be opened “outside India/abroad” may also be opened in an IFSC. This explicitly places IFSCs at par with overseas jurisdictions for the purpose of maintaining such accounts.

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