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FEMA/RBI Compliance: Retaining Unutilized P0304 Advances as Rolling Cr


29-Mar-2026 (In Corporate Law)
We're an Indian LLP. A foreign corporate client remits patient funds under FEMA P0304. After a patient leaves, can we retain their unutilized INR surplus as a "Rolling Credit" (tracked via FIFO) for the client's NEXT patient? Or does RBI strictly require S1502 repatriation before new funds arrive? If retention is banned, what is the compliant workaround? Does surplus size matter? Please cite the specific FEMA provision, Master Direction, or AP-DIR circular your answer relies on.
Answers (2)

Answer #1
548 votes
Hi In general practice, RBI does not recognise a rolling credit or FIFO pool across different end-beneficiaries. Yes, in principle. Unutilised balances should be repatriated to the remitter through the AD bank. Detailed advice is possible
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Advocate Vishali Verma

Adv. Vishali Verma

LawRato Delhi | 25+ Answers
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Answer #2
501 votes
even small unutilized balances require refund under Master Direction on Export of Services – Para B.7, which mandates prompt repatriation/closure of inward remittances. Therefore, INR surplus must be refunded through your AD Bank under S1502 and cannot be carried forward for future patients.
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Advocate Akshay Kumar

Adv. Akshay Kumar

LawRatoDelhi | 25+ Answers
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