Good News, NRIs! Here’s how RBI’s latest reforms may benefit you.
- Kiran S N
- Oct 3
- 3 min read
The Reserve Bank of India kept the repo rate unchanged at 5.50% in its Oct 1, 2025, MPC meeting, a pause that looks comfortable given falling inflation and surprisingly firm growth. India’s GDP forecasts were nudged up and headline inflation trimmed, so the bank chose to wait and watch rather than rush into easing. Markets expected a steady call; what grabbed headlines instead were a set of structural measures aimed at loosening credit plumbing and nudging the rupee toward wider cross-border use.
Alongside the neutral rate call, the RBI announced a broad package. Banking / Basel/ECL transition measures to ease bank lending; removal/relaxation of some lending ceilings (loans against shares, IPO financing, M&A funding); steps to internationalise the rupee (allowing rupee lending to select neighbours, expanding Special Rupee Vostro Accounts or SRVAs); and operating changes such as longer repatriation windows for IFSC export proceeds. These are intended to deepen credit markets and increase rupee usage abroad.
If you’re an NRI or a non-resident entity dealing with India, this MPC mattered more for the rules than for the rate. RBI’s steps change what non-residents can hold, how rupee balances can be used, and even who can borrow in rupees. Below is an explanation of the NRI reforms...what changed, and what it could mean for you.
1. UPI Expansion
Until recently, NRIs had to keep an Indian SIM card active to use UPI. That restriction is gone. NPCI has allowed select international mobile numbers linked to NRE or NRO accounts to access UPI. Banks have begun rolling this out across major corridors like the UAE, US, UK, Singapore, Australia, and Canada.
Why this matters:
UPI clocked 20+ billion transactions in August 2025, making it India’s default payment mode.
By bringing 30+ million Indians abroad into this network, RBI is effectively connecting a community that remits over $120 billion annually.
This means no more juggling SIM cards. NRIs can now pay Indian merchants, service providers, or even family members seamlessly in INR.
And it’s not just UPI, cross-border card authentication rules are also being relaxed, making international transactions on Indian platforms smoother and safer.
2. Remittances
India already leads the world in remittances, with $125 billion received in 2023 and outward flows under the Liberalised Remittance Scheme (LRS) touching $30 billion in FY25.
What RBI is signalling now:
A review of LRS limits and documentation to simplify transfers.
A stronger push for Rupee-denominated settlements with trade partners, which could reduce forex conversion costs for NRIs sending money.
Impact: If you’re sending tuition fees abroad, investing globally, or wiring money back to India, expect fewer frictions and potentially lower charges once these reforms settle in.
3. Export–Import & Repatriation Flexibility
This is a quiet but game-changing move for NRIs involved in business.
Exporters now get 3 months instead of 1 month to bring in funds to their IFSC foreign currency accounts.
For merchanting trade, the repatriation window has been extended from 4 months to 6 months.
Translation:
More breathing room to manage cash flows.
Lower risk of losses from sudden currency conversion.
Better alignment with global trade cycles.
For NRIs running export-import businesses, this eases compliance pressure and allows more efficient working capital management.
4. Bigger Investment Window
Another reform in the pipeline RBI is considering raising the cap for foreign portfolio investors in Indian companies:
From 5% to 10% per individual.
From 10% to 24% overall.
For NRIs, this opens the door to take larger stakes in Indian companies without breaching regulatory limits. If implemented, this could channel more diaspora wealth into India’s equity markets.
Road Ahead
In the near term, borrowers and markets may hope for lower rates. But even if cuts are delayed, what matters is how effectively these structural changes get embedded. If the reforms really loosen up credit, improve bank behaviour, and deepen the rupee’s global role, then we may look back at this MPC not just as a “pause,” but as a turning point.
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