By way of a notification dated December 17, 2018, the Reserve Bank of India (‘RBI’) has consolidated and streamlined provisions relating to borrowing and lending in foreign currency and Indian rupees under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (‘B&L Regulations’), pursuant to which the following regulations stand superseded: (i) Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000; (ii) Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000; and (iii) Regulation 21 of Foreign (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004.

The B&L Regulations consolidate provisions in relation to: (i) borrowing and lending in foreign currency by an authorised dealer or its branch outside India and persons other than authorised dealers; and (ii) borrowing and lending in Indian rupees by an authorised dealer and persons other than authorised dealers. The B&L Regulations comprise enabling provisions and refer to the framework / guidelines / directions issued by RBI in consultation with the Government of India, in relation to external commercial borrowings, external commercial lending, start-up, trade credit and foreign currency accounts. Such framework / guidelines / directions have not yet been issued by RBI but are expected to be notified soon. Any changes to the existing regime can only be assessed post such notification.

For any transactions falling within the ambit of the B&L Regulations, proposed to be closed between December 17, 2018, and up to the date of notification of the framework / guidelines / directions to be issued by RBI, one may need to check with the relevant authorised dealer bank.