A Gazette Notification has been issued by the Reserve Bank of India regarding the amendment to the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018.
Per the amendment, Indian Banks (as well as their overseas branches) are now permitted to lend in Indian Rupees to a bank or individual resident in Sri Lanka, Bhutan and Nepal.
According to the High Commission of India in Sri Lanka, this development will make credit more accessible for businesses in Sri Lanka.
The Indian High Commission added that the provision allowing such loans to be denominated in Indian Rupees will be particularly beneficial for Sri Lankan businesses, reducing exchange rate risks and strengthening cross-border trade and financial linkages between the two countries. (Newswire)
