Module: General Practice
Q5: According to the November 2025 Amendment to the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, what is the specific privilege granted to exporters maintaining foreign currency accounts in International Financial Services Centres (IFSCs) regarding the retention of export proceeds?
✅ Correct Answer: B
The RBI introduced a significant relaxation to integrate IFSCs into the FEMA framework.
The Change: A new proviso/explanation was added to Regulation 5(CA). Exporters maintaining foreign currency accounts with banks located in an IFSC are now permitted to retain their export proceeds in these accounts for a period of up to three months.
Comparison: For accounts maintained in all other jurisdictions (non-IFSC), the requirement remains that funds must be utilized or repatriated by the end of the next month (approx.
1 month window). This amendment treats IFSCs as a distinct, privileged jurisdiction to facilitate better cash flow management for exporters.
The Change: A new proviso/explanation was added to Regulation 5(CA). Exporters maintaining foreign currency accounts with banks located in an IFSC are now permitted to retain their export proceeds in these accounts for a period of up to three months.
Comparison: For accounts maintained in all other jurisdictions (non-IFSC), the requirement remains that funds must be utilized or repatriated by the end of the next month (approx.
1 month window). This amendment treats IFSCs as a distinct, privileged jurisdiction to facilitate better cash flow management for exporters.