Reserve Bank of India issues new foreign exchange guarantee regulations with mandatory GRN reporting and ends quarterly trade credit guarantee returns

The Reserve Bank of India has issued the Foreign Exchange Management (Guarantees) Regulations, 2026, directing Authorised Dealer Category I banks to follow the new requirements when facilitating guarantees where any party is a person resident outside India, alongside relevant Department of Regulation guidelines. The regulations introduce comprehensive reporting of all guarantees issued, modified or invoked to authorised dealer banks using the GRN form annexed to the regulations, with the process for authorised dealer banks to compile and submit the returns to be communicated later. The issuance also supersedes specified A.P. (DIR Series) circulars, discontinues quarterly reporting on issuance of guarantees for Trade Credit from the quarter ending March 2026, and amends guarantee-related provisions across several Master Directions covering external commercial borrowings and trade credits, export and import of goods and services, other remittance facilities, and reporting under the Foreign Exchange Management Act, 1999. Authorised dealer banks are required to bring the circular’s contents to the attention of affected customers and constituents, and should expect further instructions on the submission format and manner for the new returns.