Foreign Exchange Management (Deposit) (Sixth Amendment) 2026

The Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026 introduce significant liberalisations to the operation of Special Non-Resident Rupee (SNRR) Accounts, provide greater flexibility for transfers between NRO, NRE and SNRR accounts, and permit wider use of SNRR accounts, including through branches in the International Financial Services Centre (IFSC).

Here’s a detailed explanation of each amendment.

1. Recognition of IFSC in the Regulations

Amendment

A new definition of International Financial Services Centre (IFSC) has been inserted.

It adopts the meaning given under the International Financial Services Centres Authority Act, 2019.

Earlier: The Deposit Regulations did not define IFSC.

Effect: The regulations now formally recognise IFSC banking units, making later amendments possible.

2. SNRR Account can now be opened with IFSC branches

Earlier provision: A non-resident could open an SNRR Account only with an Authorised Dealer (AD) bank in India.

New provision: Now an SNRR Account may be opened with:

• an AD bank in India;
• its overseas branch; or
• its branch located in an IFSC in India.

Practical impact

This expands banking options for foreign investors, multinational companies and offshore businesses using IFSC banking units.

3. Major expansion of the purpose of SNRR Accounts

This is the most significant amendment.

Earlier: SNRR Accounts were generally meant for specified permissible transactions.

Certain restrictions existed regarding eligible transactions and account operation.

New provision: A person resident outside India may maintain an SNRR Account for:

• permissible current account transactions;
• permissible capital account transactions;
• any bona fide transaction with another non-resident.

Meaning

Previously, SNRR Accounts primarily facilitated transactions between:

Non-resident ↔ Resident

Now they may also facilitate:

Non-resident ↔ Non-resident

provided the transaction is genuine (bona fide).

Example

Earlier

Foreign Company A

↓

Pays Indian supplier

↓

SNRR Account

Allowed.

Now

Foreign Company A

↓

Pays Foreign Company B

↓

through SNRR Account

also permitted where instructions satisfy the AD Bank.

This considerably widens the utility of SNRR Accounts.

4. Deletion of several restrictive provisions

Paragraphs:

• 2
• 5
• 6
• 7
• 8

of Schedule 4 have been deleted.

Although the amendment does not reproduce the deleted text, these paragraphs earlier imposed operational conditions and eligibility restrictions.

Effect: The framework becomes simpler and less prescriptive.

Banks will rely more on FEMA compliance and underlying transaction purpose rather than rigid account conditions.

5. NRO → NRE transfer formally recognised

Amendment

Schedule 3 now provides that transfers from an NRO Account to an NRE Account are permitted within the limits prescribed under the Foreign Exchange Management (Remittance of Assets) Regulations, 2016.

Meaning

Eligible balances in an NRO Account can be transferred to an NRE Account, subject to:

• the annual remittance limit;
• payment of applicable taxes;
• prescribed documentation.

This aligns the Deposit Regulations with the Remittance of Assets Regulations.

6. NRO → SNRR transfer recognised

Schedule 4 now states:

Transfer from NRO Account to SNRR Account shall be governed by Schedule 3.

Thus, transfers from an NRO Account to an SNRR Account are also aligned with the applicable remittance framework.

7. FCNR(B) maturity proceeds can be transferred to NRO

Schedule 1 now includes:

Transfer from NRO Account within the limit specified under the Remittance of Assets Regulations.

This facilitates movement of eligible funds within the regulatory framework while maintaining compliance with remittance limits.

8. New provision for Non-resident to Non-resident transfers through SNRR

A completely new paragraph (Paragraph 16) has been inserted.

It provides that:

Transactions between two persons resident outside India through SNRR Accounts that may not require FEMA compliance can be processed by the AD Bank based on:

• account holder’s instructions;
• mandate; and
• disclosure of the underlying purpose.

Practical implication

Banks can process such transactions without seeking separate FEMA approvals where FEMA does not otherwise require compliance.

However, banks must ensure:

• proper documentation,
• genuine purpose,
• compliance with KYC/AML requirements.

Why has RBI introduced these amendments?

The amendments appear aimed at:

• Promoting the international use of the Indian Rupee.
• Increasing flexibility for cross-border rupee transactions.
• Supporting the development of IFSC banking.
• Simplifying operation of SNRR Accounts.
• Reducing unnecessary procedural restrictions.
• Facilitating foreign investment and cross-border business.

Practical beneficiaries

These amendments are likely to benefit:

• Foreign investors.
• Foreign portfolio investors (FPIs).
• Foreign companies operating in India.
• Overseas subsidiaries of Indian companies.
• Multinational corporations.
• Banks operating in IFSCs.
• International trading entities using INR settlements.

Summary of Key Changes

Overall impact

The Sixth Amendment is a liberalisation measure by the Reserve Bank of India. It transforms the SNRR Account from a narrowly scoped account for India-related transactions into a more versatile rupee account capable of supporting a broader range of legitimate cross-border transactions, including those between non-residents. By recognising IFSC branches and simplifying operational rules, the amendment is expected to strengthen India’s efforts to internationalise the rupee and enhance the attractiveness of IFSCs as global financial hubs.

Notification

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