What changed
The Reserve Bank of India has increased the time period for outlay of foreign exchange in merchanting trade transactions from 4 to 6 months. The overall period for completing the transaction remains 9 months. The change aims to help merchanting traders manage their transactions more efficiently.
What it means for you
This change will provide more flexibility to merchanting traders in managing their foreign exchange outlays. It may also lead to increased trade volumes and better cash flow management for these traders. Banks will need to update their systems and processes to reflect the new time period.
What you must do
- Update internal policies and procedures
- Inform customers about the change
- Review and adjust foreign exchange outlay limits
Who it affects
Authorised Dealer Category-I Banks, Merchanting traders, Exporters and importers
What is the new time period for outlay of foreign exchange?
6 months
Has the overall period for completing the transaction changed?
No, it remains 9 months