RBI Withdraws Seven Legacy FEMA Circulars; ECB and Money-Transfer References Rationalised
The Reserve Bank of India has withdrawn seven older A.P. (DIR Series) circulars under the Foreign Exchange Management Act, 1999 as part of an ongoing exercise to rationalise the FEMA regulatory framework. The change was issued on September 8, 2026 through RBI/2026-27/254, A.P. (DIR Series) Circular No. 21 and is addressed to all Authorised Persons.
The circular is not a new liberalisation of external commercial borrowing or money-transfer rules by itself. Instead, RBI has formally removed seven legacy instructions that it says have ceased to be operative because of later regulatory amendments, redundancy, overlap or supersession by newer directions. For banks, treasury teams, cross-border finance functions and professionals advising on FEMA, the practical message is to stop treating the listed circulars as live standalone instructions and to work from the current consolidated regulatory framework.
Seven legacy FEMA circulars withdrawn
RBI's annex lists seven A.P. (DIR Series) circulars that are being withdrawn:
- Circular No. 17 dated September 29, 2015 on External Commercial Borrowings policy relating to issuance of rupee-denominated bonds overseas.
- Circular No. 25 dated September 3, 2014 on External Commercial Borrowings in Indian rupees.
- Circular No. 85 dated January 6, 2014 on liberalisation of the definition of infrastructure sector under the ECB policy.
- Circular No. 81 dated December 24, 2013 on borrowing and lending in rupees and investments by persons resident outside India in tax-free, secured, redeemable, non-convertible bonds.
- Circular No. 119 dated June 26, 2013 on ECB policy for import of services, technical know-how and licence fees.
- Circular No. 49 dated November 7, 2012 on the Money Transfer Service Scheme and the list of sub-agents.
- Circular No. 48 dated November 6, 2012 on ECB policy concerning borrowing by the Small Industries Development Bank of India.
Why RBI has withdrawn them
RBI said a comprehensive review of circulars issued since June 1, 2000 is underway as part of its continuing initiative to rationalise the regulatory framework under FEMA. The seven circulars identified in the September 8 action have become non-operative because subsequent amendments or newer directions have displaced them, or because their content is now redundant or overlaps with later requirements.
This distinction matters. Withdrawal of an old circular should not be read as automatic removal of the underlying regulatory subject. For example, external commercial borrowings, rupee-denominated overseas borrowing and other cross-border financing matters continue to be governed by the current FEMA regulations, master directions and operative RBI directions. The September 8 circular mainly cleans the historical instruction set so that regulated entities are less likely to rely on outdated documents.
What Authorised Persons must do
RBI has asked Authorised Persons to bring the contents of the circular to the notice of the constituents concerned. In practice, Authorised Dealer banks and other covered entities should ensure that internal FEMA manuals, compliance matrices, reference libraries and customer-facing guidance do not continue to cite the seven withdrawn circulars as operative authority.
Finance and compliance teams that maintain legacy cross-border borrowing checklists should also review whether any internal control, approval note or standard operating procedure still points to one of the withdrawn circulars. Where it does, the relevant requirement should be traced to the currently applicable regulation, master direction or later circular before the document is updated.
Legal basis of the September 8 circular
RBI states that the directions were issued under Section 10(4) and Section 11(1) of FEMA, 1999. It also says the directions are without prejudice to permissions or approvals that may be required under any other law. That means the rationalisation exercise does not displace separate statutory, regulatory or governmental approvals that may apply to a transaction.
What CAs and finance teams should check now
- Search internal FEMA and treasury documentation for the seven circular numbers and dates listed by RBI.
- Do not infer that the underlying transaction category is deregulated merely because an old circular has been withdrawn.
- Map any legacy citation to the current regulation, master direction or later RBI instruction before advising a client or approving a transaction.
- For ECB-related work, verify the current borrowing framework, eligible borrower and lender conditions, end-use rules, reporting requirements and any route-specific conditions from the latest operative RBI material.
- Authorised Persons should communicate the withdrawal internally and, where relevant, to affected customers or constituents as RBI has directed.
The September 8 circular is a regulatory housekeeping measure with real compliance value: seven FEMA instructions dating from 2012 to 2015 have been formally taken out of the operative circular set. CAs, banks and cross-border finance teams should use the withdrawal as a prompt to remove stale references from working papers and rely on the current consolidated FEMA framework for live transactions.
Official source: View the official source document
Key takeaway
RBI has withdrawn seven older FEMA circulars covering ECB, rupee-denominated borrowing, non-resident bond investment and MTSS matters as part of a broader clean-up of directions issued since 2000.
