The Reserve Bank of India issued A.P. (DIR Series) Circular No. 19 dated January 12, 2026, directing Authorised Dealer Category I banks to implement the Foreign Exchange Management (Guarantees) Regulations, 2026. The circular mandates that banks facilitate guarantees involving non-residents strictly in accordance with the new regulations and ensure compliance with related regulatory instructions. It introduces comprehensive reporting of all guarantees—issued, modified, or invoked—through a prescribed GRN format, with detailed reporting procedures to be notified separately. Consequent to the new regulations, several legacy A.P. (DIR Series) circulars have been superseded, quarterly reporting for trade credit guarantees has been discontinued from March 2026, and multiple FEMA Master Directions have been amended to align with the revised framework. Banks are required to inform their customers about these changes. The directions are issued under FEMA, 1999 and operate without prejudice to approvals required under other applicable laws.
Reserve Bank of India
RBI/2025-26/192
A.P. (DIR Series) Circular No. 19 Dated: January 12, 2026
All Authorised Dealer Category I Banks,
Madam / Sir,
Foreign Exchange Management (Guarantees) Regulations, 2026
The Reserve Bank of India has issued Foreign Exchange Management (Guarantees) Regulations, 2026. Authorised dealer banks are directed to be guided by the regulations ibid, while facilitating a guarantee wherein any of the parties is a person resident outside India. Authorised dealer banks may also note to ensure compliance to regulatory guidelines issued by Department of Regulation, Reserve Bank of India.
2. The regulations provide for comprehensive reporting of all guarantees – issued, modified or invoked, to the authorised dealer banks, in form GRN annexed to the regulations. The manner and format in which authorised dealer bank shall compile and submit the returns received will be communicated in due course.
3. Upon issuance of aforementioned regulations,
a. the A.P. (DIR Series) Circulars as per the Annex to these directions are being superseded, except as respects things done or omitted to be done before such supersession.
b. quarterly reporting on issuance of guarantee for Trade Credit is being discontinued from quarter ending March 2026.
c. guarantee related provisions in Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations; Master Directions – Export of Goods and Services; Master Directions – Import of Goods and Services; Master Direction – Other Remittance Facilities; and Master Direction – Reporting under Foreign Exchange Management Act, 1999 are being amended.
4. Authorised dealer banks may bring the contents of the circular to the notice of their customers/ constituents concerned.
5. The directions contained in this circular have been issued under sections 10(4), 11(1) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Dr. Aditya Gaiha)
Chief General Manager-in-Charge
Annex
