Current · Source: Reserve Bank of India · RBI/2013-14/328 · issued 18 Oct 2013 · ~1 min read
Quick answerRBI restricts ACU payments to export/import of goods and services only, removing other current account transactions. AD Category-I banks must update procedures and inform constituents.
The rule, in the simplest words
The ACU (Asian Clearing Union, a group of countries that settle payments together) can now only be used for buying/selling goods and services between member countries.
Banks cannot use the ACU for other payments like sending money for personal reasons or paying for things not related to trade.
Banks must update their rules and tell their customers about this change.
Staff who handle international payments must learn the new, narrower rules.
How it plays out — a real example
A forex & trade-finance officer in Indore receives a request from a customer to send a payment to a relative in Sri Lanka through the ACU. The officer explains that the ACU is now only for trade in goods and services, so this personal remittance cannot go through ACU and must use a different payment method.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/328
A.P. (DIR Series) Circular No.63
October 18, 2013
To
All Authorised Dealer Category-I banks
Madam/ Dear Sir,
Memorandum of Procedure for channeling transactions through Asian Clearing Union (ACU)
Attention of Authorised Dealer Category-I banks is invited to Para 7 and Para 8 of Annex to the A.P.(DIR Series) Circular No.35 dated February 17, 2010 .
2. The ACU Board of Directors in their meeting held on June 19, 2013 have decided to include only transactions involving export/import of goods and services among ACU countries as eligible for payment under the ACU Mechanism. Accordingly, Para 7 and sub-paragraph (b) of Para 8 of the Annex to the A.P.(DIR Series) Circular No.35 dated February 17, 2010 have been updated and given in Annex . All other instructions contained in the A.P.(DIR Series) Circular No.35 dated February 17, 2010 shall remain unchanged.
3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.
4. The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge
[Annex to the A.P.(DIR Series)
Circular No.63 of 18.10.2013]
Extant Para 7 and Para 8(b) to the Annex of A.P.(DIR Series) Circular No.35 dated February 17, 2010
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/328 · issued 18 Oct 2013. The plain-English explanation above is BankPulse’s own independent summary.
Review and amend any standing instructions or systems that previously allowed non-trade current account transactions through ACU.
📜 Compliance
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.
Ensure staff handling cross-border payments are trained on the narrowed scope.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Exporters and importers using ACU mechanism, Constituents of AD Category-I banks involved in ACU transactions), your first concrete step on “ACU Mechanism Now Only for Goods & Services Trade” is: “Update internal ACU processing guidelines to accept only export/import of goods and services.” (RBI issued this 18 Oct 2013).
Circular: RBI/2013-14/328 -- ACU Mechanism Now Only for Goods & Services Trade
Issued: 18 Oct 2013
Action required: Update internal ACU processing guidelines to accept only export/import of goods and services.
Action required: Inform all constituents about the revised eligibility criteria for ACU payments.
Action required: Review and amend any standing instructions or systems that previously allowed non-trade current account transactions through ACU.
Action required: Ensure staff handling cross-border payments are trained on the narrowed scope.
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=8517&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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