Merchanting Trade Transactions (MTT) – Review of time period for outlay of foreign exchange
RBI/2025-26/88 October 01, 2025 All Authorised Dealer Category-I Banks Madam / Sir, Merchanting Trade Transactions (MTT) Attention of Authorised Dealer Category – I banks (AD banks) is invited to Para 2 (vi) of A.P. (DIR Series) Circular No.20 dated January 23, 2020 wherein it has been indicated that ‘The entire MTT shall be completed within an overall period of nine months and there shall not be any outlay of foreign exchange beyond four months. The commencement date of merchanting trade shall be the date of shipment / export leg receipt or import leg payment, whichever is first. The completion date shall be the date of shipment / export leg receipt or import leg payment, whichever is the last’. 2. On a review and in order to facilitate merchanting traders to manage their MTT efficiently, it has been decided to increase the time period for outlay of foreign exchange from four to six months. All the other directions indicated in the Circular referred above shall remain unchanged. 3. The above instruction is applicable with immediate effect. AD banks may bring the contents of this circular to the notice of their constituents and customers concerned. 4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (N. Senthil Kumar) |
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