The Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 has been amended to enable Indian banks (as well as their overseas branches) to lend in Indian Rupees to a bank or a person, resident in Bhutan, Nepal, or Sri Lanka, the Indian High Commission said yesterday (13).
The IHC spokesperson said: “This development will make credit more accessible for businesses in Sri Lanka. 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.”