Foreign Exchange Management (Borrowing and lending) (Amendment) Regulations, 2021


Quick Summary
The Reserve Bank of India has issued an amendment to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018. Effective from its publication date, this amendment allows Authorised Dealers (ADs) in India to lend to individuals or entities outside India. This lending is specifically for making margin payments related to transactions involving Government Securities.

RESERVE BANK OF INDIA
(Financial Markets Regulation Department)
(CENTRAL OFFICE)
NOTIFICATION
MUMBAI, the 24th May 2021


Foreign Exchange Management (Borrowing and lending) (Amendment) Regulations, 2021

No. FEMA. 3(R)2/2021-RB.- In exercise of the powers conferred by Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No. FEMA 3(R)/2018-RB dated December 17, 2018, the Reserve Bank makes the following amendment in the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended from time to time, namely:

2. Short title and commencement: -

(i) These Regulations may be called the Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2021
(ii) They shall come into force with effect from the date of their publication in the Official Gazette.

3. Amendment of the regulations: -

(i) In the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, in regulation 7, in clause (A), after sub-clause (ii), the following sub-clause shall be inserted, namely:


“iii) An AD in India may lend to a person resident outside India for making margin payments in respect of settlement of transactions involving Government Securities by the person resident outside India, subject to such terms and conditions as may be specified by the Reserve Bank.

Explanation:

The expression ‘Government Security’ shall have the same meaning as assigned to it in Section 2(f) of Government Securities Act, 2006, and the word ‘securities’ shall be construed accordingly.

DIMPLE BHANDIA, Chief General Manager
[ADVT. III/4/Exty./71/2021-22]

Foot Note: The Principal Regulation was 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 – G.S.R No. 163(E) dated 26.02.2019
 

FAQ :

These regulations amend the existing Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, to allow Indian Authorised Dealers (ADs) to lend to persons resident outside India for specific purposes.

The amendment regulations come into force from the date of their publication in the Official Gazette.

Indian Authorised Dealers (ADs) are now permitted to lend to persons resident outside India for the purpose of making margin payments in the settlement of transactions involving Government Securities.

A 'Government Security' has the same meaning as assigned to it in Section 2(f) of the Government Securities Act, 2006.

Yes, the lending is subject to such terms and conditions as may be specified by the Reserve Bank.

 
Notification No : No. FEMA. 3(R)2/2021-RB.
Source : https://egazette.nic.in/WriteReadData/2021/227216.pdf



Notification posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Comments



CCI Pro





Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details
Company
16 September 2026
Internal Audit - Team Lead

Consulting & Beyond

Chennai

CA

View Details
Company
ARTICLESHIP 07 October 2026
Article assistant

S.K.Bajpai & Co.

Noida

B.Com

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
Featured 12 September 2026
Assistant Manager - Finance & Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details