What changed
The ACU Board decided to limit eligible payments under the ACU mechanism solely to export/import of goods and services among member countries. Consequently, RBI revised Para 7 and Para 8(b) of the Annex to the earlier circular, removing the broader 'current international transactions' eligibility and narrowing ineligible payments to those not related to such trade.
What it means for you
Banks can no longer route non-trade current account transactions (like remittances for services not tied to exports/imports) through ACU. This tightens the scope, reducing flexibility for cross-border payments among ACU nations. Lenders must reclassify and process only trade-related payments via ACU, ensuring compliance with the updated framework.
What you must do
- Update internal ACU processing guidelines to accept only export/import of goods and services.
- Inform all constituents about the revised eligibility criteria for ACU payments.
- Review and amend any standing instructions or systems that previously allowed non-trade current account transactions through ACU.
- Ensure staff handling cross-border payments are trained on the narrowed scope.
Who it affects
AD Category-I banks, Exporters and importers using ACU mechanism, Constituents of AD Category-I banks involved in ACU transactions
Can we still use ACU for service payments like consultancy fees or royalties?
No, only payments for export/import of goods and services directly tied to trade between ACU member countries are eligible. Other current account transactions are now excluded.
Does this affect trade with Myanmar?
No, trade with Myanmar can still be settled in any freely convertible currency in addition to the ACU mechanism, as per the unchanged note.