Current · Source: Reserve Bank of India · RBI/2012-13/259 · issued 23 Oct 2012 · ~2 min read
Quick answerRBI now allows AD Category-I banks to sell foreign exchange to DTA units for paying SEZ units for services rendered, provided the SEZ unit's Letter of Approval permits such transactions.
The rule, in the simplest words
AD Category-I banks can sell foreign exchange to DTA units for paying SEZ units for services rendered.
The SEZ unit's Letter of Approval must have an enabling provision for such transactions.
Banks must verify the Letter of Approval before processing forex payments for services from DTA to SEZ units.
How it plays out — a real example
As a forex & trade-finance officer in Indore, Rohan helps a local business owner, Mr. Kumar, who needs to pay a SEZ unit for services rendered. Rohan verifies the SEZ unit's Letter of Approval and ensures it has an enabling provision for foreign exchange payments. He then processes the forex payment, expanding cross-border transaction opportunities for Mr. Kumar's business.
What changed
Previously, only goods supplied by SEZ units to DTA units could be paid for in foreign exchange via AD banks. This circular extends the same facility to services rendered by SEZ units to DTA units, subject to the SEZ unit's Letter of Approval containing an enabling provision.
What it means for you
Banks can now process forex payments for services from DTA to SEZ units, expanding cross-border transaction opportunities. This simplifies compliance for DTA units sourcing services from SEZs and aligns with SEZ policy objectives. Banks must verify the Letter of Approval before processing such transactions.
What you must do
Update internal forex processing guidelines to include services under SEZ-DTA forex payment rules.
Train staff to verify the Letter of Approval for enabling provisions before processing such transactions.
Inform corporate customers about this new facility for service payments to SEZ units.
Ensure compliance with FEMA Sections 10(4) and 11(1) while processing these transactions.
Who it affects
AD Category-I banks, DTA units purchasing services from SEZ units, SEZ units providing services to DTA units
❓ Common questions
What types of transactions are covered under this circular?
This circular covers payment in foreign exchange by DTA units to SEZ units for services rendered, not just goods. The SEZ unit's Letter of Approval must explicitly allow such supply and forex payment.
Do we need any additional approval from RBI for each transaction?
No, AD banks can process these transactions without prior RBI approval, provided the SEZ unit's Letter of Approval includes the enabling provision for supply and forex payment.
What should we check before processing such a forex sale?
Verify that the SEZ unit's Letter of Approval from the Development Commissioner contains a clause permitting supply of services to DTA units and receipt of payment in foreign exchange.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/259
A. P. (DIR Series) Circular No. 46
October 23, 2012
To
All Category - I Authorised Dealer Banks
Dear Madam/ Sir,
Supply of Goods and Services by Special Economic Zones (SEZs) to Units
in Domestic Tariff Areas (DTAs) against payment in foreign exchange
Attention of the Authorised Dealer (AD) Category - I banks is invited to A.P. (Dir Series) Circular No.105 dated June 16, 2003 , in terms of which units in the Domestic Tariff Areas (DTAs) have been permitted to purchase foreign exchange from ADs for making payment towards goods supplied to them by units in the Special Economic Zones (SEZs).
2. The matter has since been reviewed in consultation with the Ministry of Commerce and Industry, Government of India and it has been decided to allow ADs to sell foreign exchange to a unit in the DTA for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (i.e. a unit in SEZ) to a DTA unit. It may, however, be ensured that there is an enabling provision of supplying these goods/services by the SEZ unit to the DTA unit and for payment in foreign exchange for such goods/ services to the SEZ unit, in the Letter of Approval (LoA) issued to the SEZ unit by the Development Commissioner(DC) of the SEZ.
3. AD Category - I banks may bring the contents of this circular to the notice of their constituent 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, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
( Rashmi Fauzdar )
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/259 · issued 23 Oct 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, DTA units purchasing services from SEZ units, SEZ units providing services to DTA units), your first concrete step on “SEZ Services to DTA: Forex Payment Allowed” is: “Update internal forex processing guidelines to include services under SEZ-DTA forex payment rules.” (RBI issued this 23 Oct 2012).
Circular: RBI/2012-13/259 -- SEZ Services to DTA: Forex Payment Allowed
Issued: 23 Oct 2012
Action required: Update internal forex processing guidelines to include services under SEZ-DTA forex payment rules.
Action required: Train staff to verify the Letter of Approval for enabling provisions before processing such transactions.
Action required: Inform corporate customers about this new facility for service payments to SEZ units.
Action required: Ensure compliance with FEMA Sections 10(4) and 11(1) while processing these transactions.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7638&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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