Banks want RBI nod to use new rules for old trades

Mumbai banks are seeking Reserve Bank of India approval to employ new regulations for settling outdated cross-border trade transactions that have accumulated nearly ₹1 lakh crore in overdue payments. These unresolved export and import transactions, where goods have been shipped but not received, have persisted for a decade. The Reserve Bank's new regulations, set to take effect on October 1, 2026, would allow banks to close these old entries under specific conditions, such as client declarations outlining reasons for the delays.

However, banks are hesitant to apply these new rules without the RBI's explicit permission, fearing potential scrutiny and caution-listing of exporters. The caution-listing process, which has been a concern for exporters, would be eliminated from October 1, but there are uncertainties regarding past transaction cases. Banks are eager to resolve as many outstanding trade payment entries as possible before the month-end deadline to avoid potential restrictions on future exports.