The Reserve Bank of India (RBI) has issued the Foreign Exchange Management (Guarantees) Regulations, 2026, providing a comprehensive framework for guarantees involving persons resident outside India. In a circular issued today, the RBI has directed all Authorised Dealer Category-I banks to follow the new regulations while facilitating such guarantees and to ensure compliance with regulatory guidelines issued by the Department of Regulation.

 

The regulations mandate comprehensive reporting of all guarantees issued, modified or invoked by authorised dealer banks in the prescribed format. The manner and format for submitting these returns will be communicated separately. With the issuance of the new regulations, earlier A.P. (DIR Series) circulars listed in the annexure have been superseded. The RBI has also discontinued quarterly reporting on the issuance of guarantees for Trade Credit from the quarter ending March 2026.

 

Further, guarantee-related provisions in several existing Master Directions, including those on External Commercial Borrowings, Trade Credits, Export and Import of Goods and Services, and Reporting under FEMA, 1999, have been amended.

 

Authorised dealer banks have been advised to bring the contents of the circular to the notice of their customers. RBI said the directions have been issued under the provisions of the Foreign Exchange Management Act, 1999.